Document:

Exhibit
10.1

 

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 Hong Liang Lu (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 the
Employee previously entered into a Change of Control Severance Agreement dated January 17,
2003, as amended November 30, 2007 (the “Amended Agreement”) which
provided the Employee with severance benefits upon the Employee’s termination
of employment under certain circumstances and pursuant to which Employee agreed
that certain amendments may be required to the Amended 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 Amended 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)         
Good Reason.  “Good Reason” 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 “Good
Reason;” (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 10 below.

 

(d)         Involuntary
Termination.  “Involuntary Termination” shall mean any termination
(other than a termination for Cause) of the Employee by the Company.

 

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

 

2

 

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 Good Reason or an
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 termination date; 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)         
two hundred percent (200%) of Employee’s full annual performance target bonus
for the year in which the termination occurs, payable in a lump sum within
thirty (30) days of the date of 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;

 

(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 health insurance premiums for continuation coverage
pursuant to the Consolidated Omnibus 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 within
thirty (30) days of the date of 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 Good Reason or an Involuntary Termination
during the term of this Agreement, then the Employee shall be entitled to the
following severance benefits:

 

3

 

(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 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 full annual performance target bonus
for the year in which the termination occurs, payable in a lump sum within
thirty (30) days of the 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;

 

(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 health insurance premiums for continuation coverage
pursuant to 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 within thirty (30) days of the date of 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 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, except those benefits required
to be provided by law.

 

(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.              
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 his
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.

 

8.              
Death or Disability.  With respect to Employee’s equity awards, in
the event of Employee’s death or disability as such terms are defined in the
applicable equity plans, and Employee is still employed by the Company at the
time of such death or disability, then all of Employee’s equity awards shall
become fully vested and exercisable.

 

5

 

9.              
Nonsolicitation.  Employee agrees further that, for the period of
his employment by the Company and for one (1) year after the date of termination
of his employment by the Company, he will not, either directly or through
others, solicit or attempt to solicit any employee, independent contractor or
consultant of the Company to terminate his or her relationship with the Company
in order to become an employee, consultant or independent contractor to or for
any other person or entity.

 

10.         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.

 

(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.

 

11.         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.

 

6

 

12.         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 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.

 

7

 

13.         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, together with any outstanding equity
award agreements referenced herein represent the entire 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 equity award agreements.

 

(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.

 

(h)         No
Representations.  The Employee represents that he has had the
opportunity to consult with his attorneys and tax advisors, and has carefully
read and understands the scope, effect and potential tax consequences of the
provisions of this Agreement, including, but not limited to, the potential
consequences of Section 409A of the Code.  The Employee represents
that he is not relying on the Company for any tax advice.

 

8

 

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/
  Francis P. Barton

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  EVP
  and Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE:

  	
  /s/
  Hong Liang Lu

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  HONG
  LIANG LU

  	
   

  
	
   

  	
  Printed
  Name

  

 

 

SIGNATURE
PAGE TO CHANGE OF CONTROL/

INVOLUNTARY
TERMINATION SEVERANCE AGREEMENT

 

9Exhibit 10.2

 

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 Peter Blackmore (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 a Change of Control/Involuntary Termination
Severance Agreement dated July 2, 2007 (the “July 2007 Agreement”), in
connection with which Employee agreed that certain amendments may be required
to the July 2007 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 July 2007
Agreement in order to comply with Section 409A of the Code.

 

AGREEMENT

 

In consideration of the mutual covenants herein contained and the
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.

 

Notwithstanding the foregoing or anything in this Agreement to the
contrary, a “Change of Control” will not include any transaction described in
clauses (i), (ii) or (iii) of this Section 1(b) which is
pursuant to a definitive agreement executed within one hundred twenty (120)
days of July 2, 2007; provided, however, an event that could be described
in clause (iv) will be deemed a “Change of Control”.

 

(c)   Good
Reason. “Good Reason” 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 “Good Reason;” (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 9
below. For the avoidance of doubt, the Company’s failure to offer the Employee
the position of CEO pursuant to Section 4 hereof shall not constitute “Good
Reason” hereunder.

 

(d)   Involuntary
Termination. “Involuntary Termination” shall mean any termination (other
than a termination for Cause) of the Employee by the Company.

 

2

 

(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, the terms of this Agreement shall continue in effect
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.   Failure to Receive Offer to Become Chief Executive Officer.
If the Employee remains employed with the Company through July 2, 2008
(the “Trigger Date”) and the Employee is not offered the position of Chief
Executive Officer of the Company on or before the Trigger Date, the Employee
shall be entitled to the following benefits:

 

(a)   twelve
(12) months of the Employee’s base salary as in effect as of the Trigger
Date, less applicable withholding, payable in a lump sum within thirty
(30) days of the Trigger Date;

 

(b)   one
hundred percent (100%) of the Employee’s full annual performance target bonus
for the year of the Trigger Date, payable in a lump sum within thirty (30) days
of the Trigger Date;

 

(c)   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 Trigger Date to the extent such
equity awards are outstanding and unexercisable or unreleased at such date; and

 

(d)   all
Employee’s outstanding restricted cash awards shall become fully vested,
payable in a lump sum within thirty (30) days of the Trigger Date.

 

Notwithstanding the foregoing or anything in this Agreement to the
contrary, the Board and the Employee may mutually agree to extend the Trigger
Date beyond July 2, 2008; provided, however, that the Trigger Date cannot
be extended beyond February 13, 2009 and such change must be in writing.
For the avoidance of doubt, if the Trigger Date is extended, to receive any of
the payments and benefits provided in this Section 4, the Employee
must (i) remain employed with the Company through the extended Trigger
Date, and (ii) not be offered the position of Chief Executive Officer of
the Company on or before the extended Trigger Date.

 

3

 

5.       Severance
Benefits.

 

(a)   Termination
Following A Change of Control. If the Employee’s employment with the
Company terminates as a result of a Good Reason or an 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 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 6;

 

(ii)   two
hundred percent (200%) of Employee’s full annual performance target bonus and a
monthly pro rated amount of the Employee’s full annual performance bonus for
the year in which the termination occurs, payable in a lump sum within thirty
(30) days of the 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 6;

 

(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.

 

(iv)  all
Employee’s outstanding restricted cash awards shall become fully vested,
payable in a lump sum within thirty (30) days of the 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 6; and

 

(v)   an amount
equal to twelve (12) months of health insurance premiums for continuation
coverage under the 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 within thirty
(30) days of the date of 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 6.

 

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

 

(i)    twelve
(12) 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 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 6;

 

4

 

(ii)   one
hundred percent (100%) of Employee’s full annual performance target bonus for
the year in which the termination occurs, payable in a lump sum within thirty
(30) days of the 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 6;

 

(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;

 

(iv)  all
Employee’s outstanding restricted cash awards shall become fully vested,
payable in a lump sum within thirty (30) days of the 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 6; and

 

(v)   an amount
equal to twelve (12) months of health insurance 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 within thirty (30) days of the date of 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 6.

 

(c)   Termination
Apart from a Change of Control or 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, except those benefits required to be provided by law.

 

(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.

 

6.   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), if any, and
any other severance payments or separation benefits which may be considered
deferred compensation under Section 409A (together, the “Deferred Compensation
Separation 

 

5

 

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.

 

7.   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. The Company shall indemnify Employee for any tax,
penalties or interest incurred by Employee as a result of any errors caused by
Employee’s reliance on such calculations.

 

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 his
Involuntary Termination or separation for Good Reason and an agreement not to
disparage the Company, its directors, or its executive officers, in a
reasonable form satisfactory to the Company; provided, however, Employee will
not be required to waive or release any rights related to the Company’s
indemnification obligations or that arise under the Company’s D&O insurance
coverage.

 

9.   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 

 

6

 

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.

 

(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.

 

10.    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.

 

11.    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 

 

7

 

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.

 

12.    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, together with the offer letter agreement between the Company
and the Employee dated May 10, 2007, and any outstanding restricted cash 

 

8

 

agreements
and equity award agreements referenced herein represent the entire 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, any restricted cash agreement and equity award
agreements.

 

(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.

 

(h)   No
Representations. The Employee represents that he has had the opportunity to
consult with his attorneys and tax advisors, and has carefully read and
understands the scope, effect and potential tax consequences of the provisions
of this Agreement, including, but not limited to, the potential consequences of
Section 409A of the Code. The Employee represents that he is not relying
on the Company for any tax advice.

 

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/
  Francis P. Barton

  	
   

  
	
   

  	
   

  	 

	
   

  	
  Title:

  	
  EVP
  and Chief Financial Officer

  	
   

  
	
   

  	
   

  	 

	
   

  	
   

  	 

	
  EMPLOYEE:

  	
  /s/
  Peter Blackmore

  	
   

  	 

	
   

  	
  Signature

  	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  Peter
  Blackmore

  	
   

  	 

	
   

  	
  Printed
  Name

  	 

								

 

 

SIGNATURE
PAGE TO CHANGE OF CONTROL/

INVOLUNTARY TERMINATION SEVERANCE AGREEMENT

 

9

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