Document:

Exhibit
10.3

 

UTSTARCOM, INC.

 

AMENDED AND
RESTATED CHANGE OF CONTROL/INVOLUNTARY 

TERMINATION

SEVERANCE AGREEMENT

 

This Amended and Restated
Change of Control/Involuntary Termination Severance Agreement (the “Agreement”)
is made and entered into effective as of January 30, 2008 (the “Effective
Date”), by and between Francis P. Barton (the “Employee”) and UTStarcom, Inc.,
a Delaware corporation (the “Company”). Certain capitalized terms used in this
Agreement are defined in Section 1 below.

 

RECITALS

 

A.          
The Company and Employee previously entered into an Amended and Restated  Change of Control/Involuntary Termination
Severance Agreement dated August 23, 2006 which provided the Employee with
severance benefits upon the Employee’s termination of employment under certain
circumstances (the “August 2006  Agreement”) and pursuant to which Employee
agreed that certain amendments may be required to the August 2006
Agreement in order to comply with Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”).

 

B.          
The Board of Directors of the Company (the “Board”) believes that it is in the
best interests of the Company and its shareholders to amend the terms of the August 2006
Agreement in order to comply with Section 409A of the Code and make
certain other changes.

 

AGREEMENT

 

In consideration of the
mutual covenants herein contained and the continued employment of Employee by
the Company, the parties agree as follows:

 

1.           
Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:

 

(a)          
Cause. “Cause” shall mean (i) any act of personal dishonesty taken
by the Employee in connection with his responsibilities as an employee which is
intended to result in substantial personal enrichment of the Employee, (ii) Employee’s
conviction of a felony which the Board reasonably believes has had or will have
a material detrimental effect on the Company’s reputation or business, (iii) a
willful act by the Employee which constitutes misconduct and is injurious to
the Company, and (iv) continued willful violations by the Employee of the
Employee’s obligations to the Company after there has been delivered to the
Employee a written demand for performance from the Company which describes the
basis for the Company’s belief that the Employee has not substantially
performed his duties.

 

(b)          
Change of Control. “Change of Control” shall mean the occurrence of any
of the following events:

 

(i)    the
approval by shareholders of the Company of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power 

 

1

 

represented by the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation;

 

(ii)   the approval by
the shareholders of the Company of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets;

 

(iii)  any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined
in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities; or

 

(iv)  a change in the
composition of the Board, as a result of which fewer than a majority of the
directors are Incumbent Directors. “Incumbent Directors” shall mean directors
who either (A) are directors of the Company as of the date hereof, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of those directors whose election or nomination was not in
connection with any transactions described in subsections (i), (ii), or (iii) or
in connection with an actual or threatened proxy contest relating to the
election of directors of the Company.

 

(c)          
Change in Control Involuntary Termination. “Change in Control
Involuntary Termination” shall mean, without the Employee’s express written
consent, (i) a significant reduction of the Employee’s duties, position or
responsibilities relative to the Employee’s duties, position or
responsibilities in effect immediately prior to such reduction, or the removal
of the Employee from such position, duties and responsibilities, unless the
Employee is provided with comparable duties, position and responsibilities;
provided, however, that the sole occurrence of the Company being acquired and
made part of a larger entity shall not constitute a “Change in Control
Involuntary Termination;” (ii) a reduction by the Company of the Employee’s
base salary as in effect immediately prior to such reduction; (iii) a
material reduction by the Company in the kind or level of employee compensation
or benefits to which the Employee is entitled immediately prior to such
reduction with the result that the Employee’s overall benefits package is
significantly reduced; (iv) the relocation of the Employee to a facility
or a location where such relocation increases the distance the Employee must
travel to work by more than thirty (30) miles from the Employee’s commute prior
to the relocation; (v) any purported termination of the Employee by the
Company which is not effected for Cause or for which the grounds relied upon
are not valid; or (vi) the failure of the Company to obtain the assumption
of this Agreement by any successors contemplated in Section 7 below.

 

(d)          
Regular Involuntary Termination. “Regular Involuntary Termination” shall
mean any termination (other than a termination for Cause) of the Employee by
the Company which is not within eighteen (18) months after a Change in Control.

 

(e)          
Termination Date. “Termination Date” shall mean the effective date of
any notice of termination delivered by one party to the other hereunder.

 

2.           
Term of Agreement. This Agreement will have a term of three (3) years
commencing on the Effective Date. Following the expiration of the three-year
term, the Employee and the Company may, but are not obligated to, enter into a
new agreement. If Employee’s employment continues following the expiration of
the three-year term, and the Company and Employee do not enter into a new
agreement, Employee’s then current benefits 

 

2

 

arrangements shall continue in
accordance with the terms of this Agreement until the Parties agree otherwise.

 

3.           
At-Will Employment. The Company and the Employee acknowledge that
subject to the provisions of this Agreement, the Employee’s employment is and
shall continue to be at-will, as defined under applicable law. If the Employee’s
employment terminates for any reason, the Employee shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be established under the Company’s
then existing employee benefit plans or policies at the time of termination.

 

4.           
Severance Benefits.

 

(a)          
Termination Following A Change of Control. If the Employee’s employment
with the Company terminates as a result of a Change in Control Involuntary
Termination at any time within eighteen (18) months after a Change of Control,
Employee shall be entitled to the following severance benefits:

 

(i)    twenty-four
(24) months of Employee’s base salary as in effect as of the date of such
termination, less applicable withholding, payable in a lump sum within thirty
(30) days of the Involuntary Termination; 
provided, however, that if Employee is a Specified Employee at the time
of such termination, then
payment shall be delayed as provided for in Section 5;

 

(ii)   one hundred
percent (100%) of Employee’s bonus for the year in which the termination
occurs; provided, however, that if Employee is a Specified Employee at the time
of such termination, then
payment shall be delayed as provided for in Section 5;

 

(iii)  all equity awards,
including without limitation stock option grants, restricted stock and stock
purchase rights, granted by the Company to the Employee prior to the Change of
Control shall become fully vested or released from the Company’s repurchase
right (if any shares of stock purchased by or granted to the Employee prior to
the Change of Control remain subject to such repurchase right) and exercisable
as of the date of the termination to the extent such equity awards are
outstanding and unexercisable or unreleased at the time of such
termination. The
Employee’s equity awards shall be exercisable until the earliest of (a) twelve
(12) months from the Employee’s date of termination, (b) the latest date
the equity award could have expired by its original terms under any
circumstances, (c) the tenth (10th) anniversary of the original date of grant
of the equity award, or (d) the date provided for under the equity plan
under which the award was granted; and

 

(iv) an amount equal to twelve (12) months of premiums for continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended (“COBRA”) at the same level of health (i.e., medical, vision and
dental) coverage and benefits as in effect for the Employee on the day
immediately preceding the day of the Employee’s termination of employment,
payable in a lump sum thirty (30) days from the Involuntary Termination;
provided, however, that if Employee is a Specified Employee at the time of such
termination, then
payment shall be delayed as provided for in Section 5.

 

(b)          
Termination Apart from a Change of Control. If the Employee’s
employment with the Company terminates as a result of a Regular Involuntary
Termination during the term of this Agreement, then the Employee shall be
entitled to the following severance benefits:

 

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(i)    twenty-four
(24) months of Employee’s base salary as in effect as of the date of such
termination, less applicable withholding, payable in a lump sum within thirty
(30) days of the Regular Involuntary Termination; provided, however, that if
Employee is a Specified Employee at the time of such termination, then payment shall be delayed as provided for
in Section 5;

 

(ii)   one hundred
percent (100%) of Employee’s bonus for the year in which the Regular
Involuntary Termination occurs; provided, however, that if Employee is a
Specified Employee at the time of such termination, then payment shall be delayed as provided for
in Section 5;

 

(iii)  all equity awards, including without limitation stock
option grants, restricted stock and stock purchase rights, granted by the
Company to the Employee shall become fully vested or released from the Company’s
repurchase right (if any shares of stock purchased by or granted to the
Employee remain subject to such repurchase right) and exercisable as of the
date of the termination to the extent such equity awards are outstanding and
unexercisable or unreleased at the time of such termination. The Employee’s
equity awards shall be exercisable until the earliest of (a) twelve (12)
months from the Employee’s date of termination, (b) the latest date the
equity award could have expired by its original terms under any circumstances, (c) the
tenth (10th)
anniversary of the original date of grant of the equity award, or (d) the
date provided for under the equity plan under which the award was granted.; and

 

(iv) an amount equal to twelve (12) months of premiums for continuation
coverage under COBRA at the same level of health (i.e., medical, vision and
dental) coverage and benefits as in effect for the Employee on the day
immediately preceding the day of the Employee’s termination of employment,
payable in a lump sum thirty (30) days from the Regular Involuntary Termination;
provided, however, that if Employee is a Specified Employee at the time of such
termination, then
payment shall be delayed as provided for in Section 5.

 

(c)          
Termination Apart from a Change of Control or Regular Involuntary
Termination. For avoidance of doubt, if the Employee’s employment with the
Company terminates as a result of Cause, then the Employee shall not be
entitled to receive severance or other benefits hereunder, but may be
eligible for those benefits (if any) as may then be established under the
Company’s then existing severance and benefits plans and policies at the time
of such termination.

 

(d)          
Accrued Wages and Vacation; Expenses. Without regard to the reason for,
or the timing of, Employee’s termination of employment: (i) the Company
shall pay the Employee any unpaid base salary due for periods prior to the
Termination Date; (ii) the Company shall pay the Employee all of the
Employee’s accrued and unused vacation through the Termination Date; and (iii) following
submission of proper expense reports by the Employee, the Company shall
reimburse the Employee for all expenses reasonably and necessarily incurred by
the Employee in connection with the business of the Company prior to the
Termination Date. These payments shall be made promptly upon termination and
within the period of time mandated by law.

 

5.           
Section 409A. Notwithstanding anything to the
contrary in this Agreement, if Employee is a “specified employee” (“Specified
Employee”) within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended and any final regulations and guidance promulgated
thereunder (“Section 409A”) at the time of Employee’s termination, then
the severance and benefits payable to Employee pursuant to this Agreement
(other than due to death), 

 

4

 

if any, and any other severance
payments or separation benefits which may be considered deferred
compensation under Section 409A (together, the “Deferred Compensation
Separation Benefits”), which are otherwise due to Employee on or within the six
(6) month period following Employee’s termination will accrue during such
six (6) month period and will become payable in a lump sum payment on the
date six (6) months and one (1) day following the date of Employee’s
termination of employment or the date of Employee’s death, if earlier. All
subsequent Deferred Compensation Separation Benefits, if any, will be payable
in accordance with the payment schedule applicable to each payment or
benefit. The foregoing provisions are intended to comply with the requirements
of Section 409A so that none of the severance payments and benefits to be
provided hereunder will be subject to the additional tax imposed under Section 409A,
and any ambiguities herein will be interpreted to so comply. .

 

6.           
Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee (i) constitute
“parachute payments” within the meaning of Section 280G of the Code, and (ii) would
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then Employee’s benefits under this Agreement shall be either

 

(a)          
delivered in full, or

 

(b)          
delivered as to such lesser extent which would result in no portion of such
benefits being subject to the Excise Tax,

 

whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by Employee on an after-tax basis, of the greatest
amount of benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code.

 

Unless the Company and the
Employee otherwise agree in writing, any determination required under this Section shall
be made in writing by the Company’s independent public accountants (the “Accountants”),
whose determination shall be conclusive and binding upon the Employee and the
Company for all purposes. For purposes of making the calculations required by
this Section, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of Section 280G and
4999 of the Code. The Company and the Employee shall furnish to the Accountants
such information and documents as the Accountants may reasonably request
in order to make a determination under this Section. The Company shall bear all
costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section.

 

7.           
Successors.

 

(a)          
Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
shall assume the Company’s obligations under this Agreement and agree expressly
to perform the Company’s obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such
obligations in the absence of a succession. For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms
of this Agreement by operation of law.

 

5

 

(b)          
Employee’s Successors. Without the written consent of the Company,
Employee shall not assign or transfer this Agreement or any right or obligation
under this Agreement to any other person or entity. Notwithstanding the
foregoing, the terms of this Agreement and all rights of Employee hereunder
shall inure to the benefit of, and be enforceable by, Employee’s personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

 

8.             
Release and Non-Disparagement Agreement. As a condition to receiving
severance or other benefits under this Agreement, Employee will be required to
sign a waiver and release of all claims arising out of any Involuntary
Termination or separation for Good Reason and an agreement not to disparage the
Company, its directors, or its executive officers, in a form reasonably
satisfactory to the Company. No severance benefits will be paid or provided
until the waiver and release agreement becomes effective.

 

9.           
Notices.

 

(a)          
General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all
notices shall be directed to the attention of its Secretary.

 

(b)          
Notice of Termination. Any termination by the Company for Cause or by
the Employee as a result of a voluntary resignation or an Involuntary
Termination shall be communicated by a notice of termination to the other party
hereto given in accordance with this Section. Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify the Termination
Date (which shall be not more than thirty (30) days after the giving of such
notice). The failure by the Employee to include in the notice any fact or
circumstance which contributes to a showing of Involuntary Termination shall not
waive any right of the Employee hereunder or preclude the Employee from
asserting such fact or circumstance in enforcing his rights hereunder.

 

10.           
Arbitration.

 

(a)          
Any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof, shall be settled by binding arbitration to be
held in Santa Clara County, California, in accordance with the National Rules for
the Resolution of Employment Disputes then in effect of the American
Arbitration Association (the “Rules”). The arbitrator may grant
injunctions or other relief in such dispute or controversy. The decision of the
arbitrator shall be final, conclusive and binding on the parties to the
arbitration. Judgment may be entered on the arbitrator’s decision in any
court having jurisdiction.

 

(b)          
The arbitrator(s) shall apply California law to the merits of any dispute
or claim, without reference to conflicts of law rules. The arbitration
proceedings shall be governed by federal arbitration law and by the Rules,
without reference to state arbitration law. Employee hereby consents to the
personal jurisdiction of the state and federal courts located in 

 

6

 

California for any action or proceeding arising from
or relating to this Agreement or relating to any arbitration in which the
parties are participants.

 

(c)          
Employee understands that nothing in this Section modifies Employee’s
at-will employment status. Either Employee or the Company can terminate the
employment relationship at any time, with or without Cause.

 

(d)          
EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE
UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN
CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION,
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES
A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF
ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP,
INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

 

(i)    ANY AND ALL
CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS
AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH
EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS;
NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE
WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.

 

(ii)   ANY AND ALL
CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING, BUT
NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT
OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH
DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR
EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;

 

(iii)  ANY AND ALL CLAIMS
ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR
EMPLOYMENT DISCRIMINATION.

 

11.         
Miscellaneous Provisions.

 

(a)          
No Duty to Mitigate. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Employee may receive from any
other source.

 

(b)          
Waiver. No provision of this Agreement may be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Company (other
than the Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of
the same condition or provision at another time.

 

(c)          
Integration. This Agreement and any outstanding stock option agreements
and restricted stock purchase agreements referenced herein represent the entire

 

7

 

agreement and understanding between the parties as
to the subject matter herein and supersede all prior or contemporaneous
agreements, whether written or oral, with respect to this Agreement and any
stock option agreement or restricted stock purchase agreement.

 

(d)          
Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws, but not the conflicts of law rules, of the State of California.

 

(e)          
Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.

 

(f)           
Employment Taxes. All payments made pursuant to this Agreement shall be
subject to withholding of applicable income and employment taxes.

 

(g)          
Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.

 

IN WITNESS WHEREOF, each of
the parties has executed this Agreement, in the case of the Company by its duly
authorized officer, as of the day and year first above written.

 

	
  COMPANY:

  	
  UTSTARCOM, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Green

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  SVP, Global Human Resources and Real Estate

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Francis P.
  Barton

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
  Francis P. Barton

  	
   

  
	
   

  	
  Printed Name

  

 

 

SIGNATURE PAGE TO
AMENDED AND RESTATED CHANGE OF

CONTROL/INVOLUNTARY
TERMINATION SEVERANCE AGREEMENT

 

8Exhibit 10.4

 

UTSTARCOM,
INC.

AMENDED
AND RESTATED

EXECUTIVE
INVOLUNTARY TERMINATION SEVERANCE PAY PLAN

 

1.             Introduction.  The
purpose of this UTStarcom, Inc. Executive Involuntary Termination Severance
Pay Plan, as amended and restated (the “Plan”), is to provide assurances of
specified severance benefits to eligible employees of the Company whose
employment is subject to being involuntarily terminated (other than for Cause,
death or Disability). The Plan is intended to (a) assure that the Company
will have continued dedication and objectivity of its employees, and (b) provide
the Company’s employees with an incentive to continue their employment and to
motivate its employees to maximize the value of the Company for the benefit of
its stockholders. This Plan is an “employee welfare benefit plan,” as defined
in Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended. This document constitutes both the written instrument under
which the Plan is maintained and the required summary plan description for the
Plan.

 

2.             Important Terms.  To
help you understand how this Plan works, it is important to know the following
terms:

 

2.1           “Administrator”
means the Company, acting through its Senior Vice President of Human Resources
or any person to whom the Administrator has delegated any authority or
responsibility pursuant to Section 8, but only to the extent of such
delegation.

 

2.2           “Base Pay” means a
Covered Employee’s regular straight-time salary as in effect during the last
regularly scheduled payroll period immediately preceding the date on which the
Severance Benefit becomes payable. Base Pay does not include payments for
overtime, shift premium, incentive compensation, incentive payments, bonuses,
commissions or other compensation.

 

2.3           “Board”
means the Board of Directors of the Company.

 

2.4           “Cause”
means (a) any act of personal dishonesty taken by the Covered Employee in
connection with his or her responsibilities as an employee which is intended to
result in substantial personal enrichment of the Covered Employee, (b) a
Covered Employee’s conviction of a felony which the Board reasonably believes
has had or will have a material detrimental effect on the Company’s reputation
or business, (c) a willful act by the Covered Employee which constitutes
misconduct and is injurious to the Company, and (d) continued willful
violations by the Covered Employee of the Covered Employee’s obligations to the
Company after there has been delivered to the Covered Employee a written demand
for performance from the Company which describes the basis for the Company’s
belief that the Covered Employee has not substantially performed his or her
duties.

 

2.5           “Change in
Control” shall mean the occurrence of any of the following events:

 

(a)           Any “person” (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes
the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent

 

 

(50%) or more of the total voting power represented by the Company’s
then outstanding voting securities; or

 

(b)           The consummation of the
sale or disposition by the Company of all or substantially all of the Company’s
assets; or

 

(c)           The consummation of a
merger or consolidation of the Company, with any other corporation, other than
a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total
voting power represented by the voting securities of the Company, or such
surviving entity or its parent outstanding immediately after such merger or
consolidation; or

 

(d)           A change in the
composition of the Board, as a result of which fewer than a majority of the
Directors are Incumbent Directors. “Incumbent Directors” means Directors who
either (A) are Directors as of the effective date of the Plan (pursuant to
Section 22), or (B) are elected, or nominated for election, to the
Board with the affirmative votes of at least a majority of those Directors
whose election or nomination was not in connection with any transaction
described in subsections (i), (ii) or (iii) or in connection with an
actual or threatened proxy contest relating to the election of Directors.

 

2.6           “Company” means
UTStarcom, Inc., a Delaware corporation, and any successor by merger,
acquisition, consolidation or otherwise that assumes the obligations of the
Company under the Plan.

 

2.7           “Covered Employee”
means an employee of the Company who is identified on Exhibit A to this
Plan or who is designated by the Administrator in writing from time to time as
a Covered Employee.

 

2.8           “Director”
means a member of the Company’s Board of Directors.

 

2.9           “Disability”
means that the Covered Employee has been unable to perform
his or her Company duties as the result of his or her incapacity due to
physical or mental illness, and such inability, at least twenty-six (26) weeks
after its commencement or one hundred eighty (180) days in any consecutive
twelve (12) month period, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Covered
Employee or the Covered Employee’s legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination resulting from
Disability may only be effected after at least thirty (30) days’ written notice
by the Company of its intention to terminate the Covered Employee’s employment.
In the event that the Covered Employee resumes the performance of substantially
all of his or her duties hereunder before the termination of his or her
employment becomes effective, the notice of intent to terminate will
automatically be deemed to have been revoked.

 

2.10         “Effective
Date” means June 20, 2006.

 

2.11         “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.

 

2

 

2.12         “Good Reason”
means, without the Covered Employee’s express written consent, (a) a
significant reduction of the Covered Employee’s duties, position or
responsibilities relative to the Covered Employee’s duties, position or
responsibilities in effect immediately prior to such reduction, or the removal
of the Covered Employee from such position, duties and responsibilities, unless
the Covered Employee is provided with comparable duties, position and
responsibilities; provided, however, that the sole occurrence of the Company being
acquired and made part of a larger entity shall not constitute a “Good Reason”;
(b) a reduction by the Company of the Covered Employee’s base salary as in
effect immediately prior to such reduction; (c) a material reduction by
the Company in the kind or level of employee compensation or benefits to which
the Covered Employee is entitled immediately prior to such reduction with the
result that the Covered Employee’s overall benefits package is significantly
reduced; (d) the relocation of the Covered Employee to a facility or
location where such relocation increases the distance the Covered Employee must
travel to work by more than thirty (30) miles from the Covered Employee’s
commute prior to the relocation; or (e) the failure of the Company to
obtain the assumption of this Plan by any successor to the Company (whether
direct or indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company’s business
and/or assets.

 

2.13         “Involuntary
Termination” means a termination of employment of a Covered Employee
under the circumstances described in Section 4.1.

 

2.14         “Option”
means a right granted pursuant to the Company’s stock option plan(s) to
purchase common stock of the Company pursuant to the terms and conditions of
such plan(s).

 

2.15         “Plan” means the
UTStarcom, Inc. Involuntary Termination Severance Pay Plan, as set forth
in this document, and as hereafter amended from time to time.

 

2.16         “Severance Benefit”
means the compensation and other benefits the Covered Employee will be provided
pursuant to Section 4.

 

2.17         “Severance
Date” means the date on which a Covered Employee experiences an
Involuntary Termination

 

2.18         “Specified
Employee” means any Covered Employee who would be considered a “Specified
Employee” as that term is defined in Section 409A(a)(2)(B)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”).

 

3.             Eligibility
for Severance Benefit.  An individual is eligible for the
Severance Benefit under the Plan, in the amount set forth in Section 4, only if he or she is a Covered Employee on the date he or
she experiences an Involuntary Termination and executes, and does not revoke, a
release in favor of the Company as required by Section 4.3.

 

4.             Severance
Benefit.

 

4.1           Involuntary Termination.  If the
Company (or any parent or subsidiary of the Company) terminates a Covered
Employee’s employment for other than Cause, death or Disability, or the Covered
Employee terminates his or her employment with the Company 

 

3

 

for Good Reason, then, subject to the Covered Employee’s compliance
with Section 4.3, the Covered Employee shall receive the following
Severance Benefit from the Company:

 

4.1.1        Severance
Benefit.  Each Covered Employee shall be entitled to
receive a lump sum cash payment equal to (a) one (1) year of Base Pay
and (b) one hundred percent (100%) of his or her target bonus for the year
of the Involuntary Termination, payable within thirty (30) days following the
Involuntary Termination; provided, however, that if the Covered Employee is a
Specified Employee at the time of such termination, payment shall be delayed as
provided for in Section 11.2..

 

4.1.2        Health
Benefits.  The Company shall pay to the Covered Employee
an amount equal to twelve (12) months of the premiums for continuation coverage
under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) of each Covered
Employee (and any eligible dependents) under the Company’s medical, dental and vision
plans at the same level of coverage in effect on the Severance Date, payable within
thirty (30) days following the Involuntary Termination; provided, however, that
if the Covered Employee is a Specified Employee at the time of such
termination, payment shall be delayed as provided for in Section 11.2.

 

4.1.3       Accelerated Vesting of
Equity Awards.  Each Covered Employee shall fully vest in
and, if applicable, have the right to exercise, all of his or her outstanding
and unvested equity compensation awards. The Covered Employee’s equity awards
(including awards that vest as a result of the Plan), shall be exercisable
until the earliest of (a) twelve (12) months from the Employee’s date of
termination, (b) the latest date the equity award could have expired by
its original terms under any circumstances, (c) the tenth (10th) anniversary of the original
date of grant of the equity award, or (d) the date provided for under the
equity plan under which the award was granted.

 

4.2           Parachute
Payments.  In the event that the severance and other
benefits provided for in this Plan or otherwise payable or provided to the
Covered Employee (i) constitute “parachute payments” within the meaning of
Section 280G of the Code and (ii) but for this Section 4.2,
would be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), then the Employee’s severance benefits hereunder Section 4
shall be either

 

(a)           delivered in full, or

 

(b)           delivered as to such
lesser extent which would result in no portion of such severance benefits being
subject to the Excise Tax,

 

whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the Excise Tax, results in the receipt by the Covered Employee
on an after-tax basis of the greatest amount of severance benefits,
notwithstanding that all or some portion of such severance benefits may be
taxable under Section 4999 of the Code. Unless the Company and the Covered
Employee otherwise agree in writing, any determination required under this Section 4.2
shall be made in writing in good faith by the accounting firm serving as the
Company’s independent public accountants immediately prior to the Change of
Control (the “Accountants”). In the event of a reduction in benefits hereunder,
the Covered Employee shall be given the choice of which benefits to reduce. For
purposes of making the calculations 

 

4

 

required by this Section 4.2,
the Accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Company
and the Covered Employee shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a
determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated
by this Section 4.2.

 

4.3           Release and
Non-Disparagement Agreement.  As a condition to receiving
Severance Benefits under this Plan, each Covered Employee will be required to
sign a waiver and release of all claims arising out of his or her Involuntary
Termination and employment with the Company and its subsidiaries and affiliates
and an agreement not to disparage the Company, its directors, or its executive
officers, in a form reasonably satisfactory to the Company. No Severance Benefits will be paid or
provided until the waiver and release agreement becomes effective.

 

4.4           Vacation Days.  Any unused vacation pay accrued as of a
Covered Employee’s date of Involuntary Termination will be paid at the time the
Covered Employee receives his or her Severance Benefit. No Covered Employee may
use any accrued but unused vacation pay to extend his or her Involuntary
Termination date.

 

5.             Termination
of Benefits.  Benefits under this Plan shall terminate
immediately for a Covered Employee if such Covered Employee, at any time,
violates any proprietary information or confidentiality obligation to the
Company or the terms of any applicable non-competition agreement with the
Company.

 

6.             Non-Duplication
of Benefits.  Notwithstanding any other provision in the
Plan to the contrary, the Severance Benefits provided hereunder shall be in
lieu of any other severance and/or retention plan benefits and the Severance
Benefits provided hereunder shall be reduced by any severance paid or provided
to a Covered Employee under any other plan or arrangement.

 

7.             Withholding.  The
Company will withhold from any Severance Benefit all federal, state, local and
other taxes required to be withheld therefrom and any other required payroll
deductions.

 

8.             Administration.  The
Company is the administrator of the Plan (within the meaning of section 3(16)(A) of
ERISA). The Plan will be administered and interpreted by the Administrator (in
his or her sole discretion). The Administrator is the “named fiduciary” of the
Plan for purposes of ERISA and will be subject to the fiduciary standards of
ERISA when acting in such capacity. Any decision made or other action taken by
the Administrator with respect to the Plan, and any interpretation by the
Administrator of any term or condition of the Plan, or any related document,
will be conclusive and binding on all persons and be given the maximum possible
deference allowed by law. The Administrator has the authority to act for the
Company (in a non-fiduciary capacity) as to any matter pertaining to the Plan; provided, however, that this authority does not apply with
respect to (a) the Company’s power to amend or terminate the Plan or (b) any
action that could reasonably be expected to increase significantly the cost of
the Plan is subject to the prior approval of the senior officer of the Company.
The Administrator may 

 

5

 

delegate in writing to
any other person all or any portion of his or her authority or responsibility
with respect to the Plan.

 

9.             Eligibility to
Participate.  The Administrator will not be excluded from
participating in the Plan if otherwise eligible, but he or she is not entitled
to act or pass upon any matters pertaining specifically to his or her own
benefit or eligibility under the Plan. The senior officer of UTStarcom, Inc.
will act upon any matters pertaining specifically to the benefit or eligibility
of the Administrator under the Plan.

 

10.           Amendment or
Termination.  The Company reserves the right to amend, modify or
terminate the Plan at any time, without advance notice to any Covered Employee;
provided, however, that, commencing on the date of a Change in Control, no
amendment or termination of the Plan shall reduce the Severance Benefit payable
to any Covered Employee (unless the affected Covered Employee consents to such
amendment or termination). Any action of the Company in amending or terminating
the Plan will be taken in a non-fiduciary capacity.

 

11.           Code Section 409A.

 

11.1         Amendment.  Notwithstanding
anything in this Plan to the contrary, the Company reserves the authority to
amend the Plan as it deems necessary or desirable, and without the consent of
any Covered Employee or without providing any advance notice of any such
amendment, in order to ensure the Plan complies with Section 409A of the
Code and any regulations and other guidance issued thereunder.

 

11.2         Distributions.  Notwithstanding anything to the contrary in
this Plan, if a Covered Employee is a “specified employee” (“Specified Employee”)
within the meaning of Section 409A of the Code and any final regulations
and guidance promulgated thereunder (“Section 409A”) at the time of a
Covered Employee’s termination, then the severance and benefits payable to the
Covered Employee pursuant to this Plan (other than due to death), if any, and
any other severance payments or separation benefits which may be considered
deferred compensation under Section 409A (together, the “Deferred
Compensation Separation Benefits”), which are otherwise due to the Covered
Employee on or within the six (6) month period following the Covered
Employee’s termination will accrue during such six (6) month period and
will become payable in a lump sum payment on the date six (6) months and
one (1) day following the date of the Covered Employee’s termination of
employment or the date of the Covered Employee’s death, if earlier. All
subsequent Deferred Compensation Separation Benefits, if any, will be payable
in accordance with the payment schedule applicable to each payment or benefit.
The foregoing provisions are intended to comply with the requirements of Section 409A
so that none of the severance payments and benefits to be provided hereunder
will be subject to the additional tax imposed under Section 409A, and any
ambiguities herein will be interpreted to so comply.

 

12.           Claims Procedure.  Any
employee or other person who believes he or she is entitled to any payment
under the Plan may submit a claim in writing to the Administrator. If the claim
is denied (in full or in part), the claimant will be provided a written notice
explaining the specific reasons for the denial and referring to the provisions
of the Plan on which the denial is based. The notice will also describe any
additional information needed to support the claim and 

 

6

 

the Plan’s procedures for appealing the denial. The denial notice will
be provided within 90 days after the claim is received. If special
circumstances require an extension of time (up to 90 days), written notice
of the extension will be given within the initial 90-day period. This notice of
extension will indicate the special circumstances requiring the extension of
time and the date by which the Administrator expects to render its decision on
the claim.

 

13.           Appeal Procedure.  If
the claimant’s claim is denied, the claimant (or his or her authorized
representative) may apply in writing to the Administrator for a review of the
decision denying the claim. Review must be requested within 60 days following
the date the claimant received the written notice of their claim denial or else
the claimant loses the right to review. The claimant (or representative) then
has the right to review and obtain copies of all documents and other
information relevant to the claim, upon request and at no charge, and to submit
issues and comments in writing. The Administrator will provide written notice
of his or her decision on review within 60 days after it receives a review
request. If additional time (up to 60 days) is needed to review the
request, the claimant (or representative) will be given written notice of the
reason for the delay. This notice of extension will indicate the special
circumstances requiring the extension of time and the date by which the
Administrator expects to render its decision. If the claim is denied (in full
or in part), the claimant will be provided a written notice explaining the
specific reasons for the denial and referring to the provisions of the Plan on
which the denial is based. The notice shall also include a statement that the
claimant will be provided, upon request and free of charge, reasonable access
to, and copies of, all documents and other information relevant to the claim
and a statement regarding the claimant’s right to bring an action under Section 502(a) of
ERISA.

 

14.           Source of Payments.  All
Severance Benefits will be paid in cash from the general funds of the Company;
no separate fund will be established under the Plan; and the Plan will have no
assets. No right of any person to receive any payment under the Plan will be
any greater than the right of any other general unsecured creditor of the
Company.

 

15.           Inalienability.  In
no event may any current or former employee of the Company or any of its
subsidiaries or affiliates sell, transfer, anticipate, assign or otherwise
dispose of any right or interest under the Plan. At no time will any such right
or interest be subject to the claims of creditors nor liable to attachment,
execution or other legal process.

 

16.           No Enlargement of
Employment Rights.  Neither the establishment or maintenance of the
Plan, any amendment of the Plan, nor the making of any benefit payment
hereunder, will be construed to confer upon any individual any right to be
continued as an employee of the Company. The Company expressly reserves the
right to discharge any of its employees at any time, with or without cause.

 

17.           Applicable Law.  The
provisions of the Plan will be construed, administered and enforced in
accordance with ERISA and, to the extent applicable, the laws of the State of
California.

 

18.           Severability.  If
any provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability will not affect any other provision of the Plan, and the Plan
will be construed and enforced as if such provision had not been included.

 

7

 

19.           Headings.  Headings
in this Plan document are for purposes of reference only and will not limit or
otherwise affect the meaning hereof.

 

20.           Indemnification.  The
Company hereby agrees to indemnify and hold harmless the officers and employees
of the Company, and the members of its boards of directors, from all losses,
claims, costs or other liabilities arising from their acts or omissions in
connection with the administration, amendment or termination of the Plan, to
the maximum extent permitted by applicable law. This indemnity will cover all
such liabilities, including judgments, settlements and costs of defense. The
Company will provide this indemnity from its own funds to the extent that
insurance does not cover such liabilities. This indemnity is in addition to and
not in lieu of any other indemnity provided to such person by the Company.

 

21.           Additional Information.

 

	
  Plan Name:

  	
   

  	
  UTStarcom, Inc. Involuntary Termination
  Severance Pay Plan

  
	
   

  	
   

  	
   

  
	
  Plan Sponsor:

  	
   

  	
  UTStarcom, Inc.

  
	
   

  	
   

  	
  1275 Harbor Bay Parkway

  
	
   

  	
   

  	
  Alameda, CA 94502

  
	
   

  	
   

  	
   

  
	
  Identification Numbers:

  	
   

  	
  EIN: 52-1782500

  
	
   

  	
   

  	
   

  
	
  Plan Year:

  	
   

  	
  Calendar year

  
	
   

  	
   

  	
   

  
	
  Plan Administrator:

  	
   

  	
  UTStarcom, Inc.

  
	
   

  	
   

  	
  Attention: Vice President,
  Human Resources

  
	
   

  	
   

  	
  1275 Harbor Bay Parkway

  
	
   

  	
   

  	
  Alameda, CA 94502

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (510) 864-8800

  
	
   

  	
   

  	
   

  
	
  Agent for Service of

  	
   

  	
   

  
	
  Legal Process:

  	
   

  	
  UTStarcom, Inc.

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  1275 Harbor Bay Parkway

  
	
   

  	
   

  	
  Alameda, CA 94502

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (510) 864-8800

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Service of process may also be made upon the Plan
  Administrator.

  
	
   

  	
   

  	
   

  
	
  Type of Plan

  	
   

  	
  Bonus Plan/Severance Plan/Employee Welfare Benefit
  Plan

  
	
   

  	
   

  	
   

  
	
  Plan Costs

  	
   

  	
  The cost of the Plan is paid by the Employer.

  

 

8

 

22.           Statement of ERISA
Rights.

 

As a Covered Employee
under the Plan, you have certain rights and protections under ERISA:

 

(a)           You may examine
(without charge) all Plan documents, including any amendments and copies of all
documents filed with the U.S. Department of Labor, such as the Plan’s annual
report (IRS Form 5500). These documents are available for your review in
the Company’s Human Resources Department.

 

(b)           You may obtain copies
of all Plan documents and other Plan information upon written request to the
Plan Administrator. A reasonable charge may be made for such copies.

 

In addition to creating
rights for Covered Employees, ERISA imposes duties upon the people who are
responsible for the operation of the Plan. The people who operate the Plan
(called “fiduciaries”) have a duty to do so prudently and in the interests of
you and the other Covered Employees. No one, including the Company or any other
person, may fire you or otherwise discriminate against you in any way to
prevent you from obtaining a benefit under the Plan or exercising your rights
under ERISA. If your claim for a severance benefit is denied, in whole or in
part, you must receive a written explanation of the reason for the denial. You
have the right to have the denial of your claim reviewed. (The claim review
procedure is explained in Sections 12 and 13 above.)

 

Under ERISA, there are
steps you can take to enforce the above rights. For instance, if you request
materials and do not receive them within 30 days, you may file suit in a
federal court. In such a case, the court may require the Plan Administrator to
provide the materials and to pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the Plan Administrator. If you have a claim which is denied or
ignored, in whole or in part, you may file suit in a state or federal court. If
it should happen that you are discriminated against for asserting your rights,
you may seek assistance from the U.S. Department of Labor, or you may file suit
in a federal court.

 

In any case, the court
will decide who will pay court costs and legal fees. If you are successful, the
court may order the person you have sued to pay these costs and fees. If you
lose, the court may order you to pay these costs and fees, for example, if it
finds that your claim is frivolous.

 

If you have any questions
regarding the Plan, please contact the Plan Administrator. If you have any
questions about this statement or about your rights under ERISA, you may
contact the nearest area office of the Employee Benefits Security
Administration (formerly the Pension and Welfare Benefits Administration), U.S.
Department of Labor, listed in your telephone directory, or the Division of
Technical Assistance and Inquiries, Employee Benefits Security Administration,
U.S. Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210.
You may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration.

 

9

 

23.           Execution.

 

In
Witness Whereof, the Company, by its duly authorized officer,
has executed this Plan on the date indicated below.

 

 

	
   

  	
  UTStarcom, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Francis P. Barton

  
	
   

  	
   

  
	
   

  	
  Title

  	
  EVP and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  	
  January 30, 2008

  
					

 

10

 

EXHIBIT A
– COVERED EMPLOYEES

 

Ari Bose

Mark Green

David King

Viraj Patel

 

11

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