Document:

Exhibit 10.2

 

CONFIDENTIAL SEPARATION AND RELEASE AGREEMENT

 

This Confidential Separation
and Release Agreement (“Agreement”) is made and entered into by and
among Charles E. Fieramosca (“Executive”) on the one hand, and Zale Corporation and Zale Delaware, Inc. (collectively,
“Zale” or the “Company”) on the other, hereinafter collectively
referred to as the “Parties.”

 

RECITALS

 

WHEREAS, Executive was employed as Senior
Vice President of Zale Delaware, Inc. and President of the Bailey Banks &
Biddle Division of Zale Delaware, Inc.;

 

WHEREAS, Executive’s last day of employment was
January 31, 2008 (“Separation Date”);

 

NOW, THEREFORE, in
consideration of the Recitals and the mutual promises, covenants, and
agreements set forth herein, the Parties covenant and agree as follows:

 

1.             Executive, for himself
and on behalf of his attorneys, heirs, assigns, successors, executors, and
administrators, hereby GENERALLY RELEASES, ACQUITS, AND DISCHARGES Zale
Corporation, Zale Delaware, Inc., Finlay Fine Jewelry Corporation, Finlay
Enterprises, Inc. and their respective current and former parent,
subsidiary, affiliated, and related corporations, firms, associations,
partnerships, and entities, their successors and assigns, and the current and
former owners, shareholders, directors, officers, employees, agents, attorneys,
representatives, and insurers of said corporations, firms, associations,
partnerships, and entities, and their guardians, successors, assigns, heirs,
executors, and administrators (hereinafter collectively referred to as the “Releasees”)
from and against any and all claims, complaints, grievances, liabilities,
obligations, promises, agreements, damages, causes of action, rights, debts,
demands, controversies, costs, losses, and expenses (including attorneys’ fees
and expenses) whatsoever, under any municipal, local, state, or federal law,
common or statutory — including, but in no way limited to, claims arising under
the Age Discrimination in Employment Act of 1967,
29 U.S.C. § 621, et seq., as amended, 29
U.S.C. §626(f) et seq.,  Title
VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., as amended (including the Civil Rights Act of
1991), the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101, et seq., as amended, the Executive Retirement Income
Security Act of 1974, (ERISA), 29 U.S.C. §§ 1001 et seq.,
as amended, the Labor Management Relations Act, 29 U.S.C. §§ 141 et seq., as amended, the Occupational Safety and Health Act
(OSHA), 29 U.S.C. §§ 651 et seq., as
amended, the Racketeer Influenced and Corrupt Organizations Act (RICO), 18
U.S.C. §§ 1961 et seq., as amended, the Sarbanes
Oxley Act of 2002, the Sabine Pilot Doctrine, the American Jobs Creation Act of
2004,  Texas Labor Code §§ 21.001 et seq., as amended, Texas Labor Code §§ 61.001 et seq., as amended, or any other claims, including claims
in equity or common law claims — for any actions or omissions whatsoever,
whether known or unknown and whether connected with the employment relationship
between Executive and Zale, the cessation of Executive’s employment with Zale, and/or
whether connected with any decision regarding Executive’s employment with
Finlay Fine Jewelry Corporation and/or Finlay Enterprises, Inc., which
existed or may have existed prior to, or contemporaneously with, the execution
of this

 

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Agreement (collectively, the “Released
Claims”).  Executive also waives any
right to recover from any Releasee in a civil suit brought by any governmental
agency or any other individual on his behalf with respect to any Released Claim.
This general release covers both claims that Executive knows about and those he
may not know about, except that it does not release any claims or rights that Executive
may have under the Age Discrimination in Employment Act of 1967 (and any
amendments thereto) that arise after the date Executive signs this Agreement.  Executive further represents and warrants
that he has been fully and properly paid for all hours worked, and has received
all leave, in accordance with applicable law. 
Executive further acknowledges, agrees and hereby stipulates that:  (i)  during Executive’s employment with
the Company, Executive was allowed to take all leave and afforded all other
rights to which he was entitled under the Family and Medical Leave Act (FMLA);
and (ii)  the Company has not in any way interfered with, restrained or
denied the exercise of (or attempt to exercise) any FMLA rights, nor terminated
or otherwise discriminated against Executive for exercising (or attempting to
exercise) any such rights.

 

2.             Executive acknowledges and agrees that he
will keep the negotiations leading to this Agreement, as well as the terms,
amount, and fact of this Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, and
that he will not communicate or otherwise disclose to any employee of Zale
(past, present, or future), or to any member of the general public, the terms,
amounts, copies, or fact of this Agreement, except as may be required by law or
compulsory process; provided, however, that Executive may make such
disclosures to his tax/financial advisors or spouse as long as they agree to
keep the information confidential.  If
asked about any of such matters, Executive’s response shall be that he may not discuss
any of such matters.  In the event of a
breach of the confidentiality provisions set forth in this Paragraph of the
Agreement by Executive, Zale may suspend any payments due under this Agreement
pending the outcome of litigation and/or arbitration regarding such claimed
breach of this Agreement by Executive.  This
Paragraph is a material inducement to the benefits provided under this
Agreement.  Any Releasee may enforce this
Paragraph without posting a bond.

 

3.             Executive expressly acknowledges, agrees,
and covenants that he will not make any public or private statements, comments,
or communication in any form, oral, written, or electronic, which in any way
could constitute libel, slander, or disparagement of Zale or any other Releasee
or which may be considered to be derogatory or detrimental to the good name or
business reputation of Zale or any other Releasee; provided, however,
that the terms of this Paragraph shall not apply to communications between Executive
and his spouse, clergy, or attorneys, which are subject to a claim of privilege
existing under common law, statute, or rule of procedure.  Executive specifically agrees not to issue
any public statement concerning his employment at Zale and/or the cessation of
such employment, but he may disclose the fact of such employment.   This Paragraph is a material inducement to the
benefits provided under this Agreement.  Any
Releasee may enforce this Paragraph without posting a bond.

 

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4.             Executive acknowledges and agrees that in
addition to the cessation of his employment with Zale, he has ceased holding
any other positions as a director, officer, and/or employee with Zale,
effective on the Separation Date.

 

5.             Executive waives and releases forever any
right and/or rights he may have to seek or obtain employment, reemployment,
and/or reinstatement with Zale or any one or more other Releasees, and agrees
not to seek reemployment with any of the same.

 

6.             Effective on the Effective Date and in
exchange for the general release set forth in this Agreement and other valuable
consideration received by the Parties:

 

(a)                                  Zale
will pay Executive severance pay in the amount of Three
Hundred Fifty-Nine Thousand, Seven Hundred Forty-Nine Dollars and 78/100 ($359,749.78),
less deductions required by law, (“Severance Pay”), in consideration for
the promises, covenants, agreements, and releases set forth herein.  The Severance Pay described in this Paragraph
will be paid to Executive within five (5) days after the Effective Date by
wire transfer.

 

(b)                                 Within
five (5) days after the Effective Date, Zale will pay to Employee $1,499.89,
an amount equal to the portion of the medical benefit premiums that Zale paid
for similarly situated executives
from the Separation Date through April 2008.  From the Effective Date
(as defined below) until the date that is one (1) year after the Separation
Date the (“Severance Period”), Zale
will continue to provide Executive his medical benefits, if any, in effect as
of the Separation Date. Any continued medical benefits provided pursuant to
this Paragraph 6(b) will count in satisfaction of Executive’s right to
continue such benefits pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended (“COBRA”). 
Executive represents and warrants that he elected to continue his
benefits by completing and submitting the COBRA election forms to the Zale
COBRA Administrator.  During the Severance
Period, Executive’s premiums for coverage will be equal to the premiums similarly
situated executives pay for the same coverage and such premiums will be
submitted by Executive directly to the Zale COBRA Administrator.  Thereafter, Executive will have the right to
elect to continue such medical benefits for the remainder of the COBRA period
by paying the COBRA rates directly to the Zale COBRA Administrator.  Executive has been provided with a notice of
the interaction of the extended medical insurance benefits under this Agreement
and his COBRA rights following his Separation Date.

 

Any health or welfare benefits
received by or available to Executive from or in connection with any other
employment of Executive, consultancy arrangement undertaken by Executive or
similar source that are reasonably comparable to, but not necessarily as
financially or otherwise beneficial to Executive as the benefits provided to Executive
by the Company at the time of the Separation Date, will be deemed the
equivalent thereof and will terminate the Company’s obligation under this Section 6(b) to
provide medical coverage during the Severance Period; provided, however,
that nothing in this Paragraph will limit or terminate Executive’s or Executive’s
dependents’ right to continue any Company group health plan coverage at Executive’s
or such dependent’s cost for the remainder of 

 

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the COBRA period.  Executive agrees to notify Zale of the
availability of any such subsequent benefit coverage(s) within 30 days
following such availability in writing to Zale Corporation, ATTN: General
Counsel, 901 W. Walnut Hill Ln., Irving, TX 75038.  The provisions of this Paragraph 6(b) will
not prohibit the Company from changing the terms of any medical benefit
programs provided that any such changes apply to all employees of Zale (e.g., Zale may switch insurance carriers or preferred
provider organizations or change coverage(s)).

 

(c)                                  Executive
represents and warrants that he has received from Zale the value of any
remaining unused and accrued vacation time through the Separation Date.  Zale shall pay to Executive the unpaid
portion, if any, of his Supplemental Executive Retirement Plan (“SERP”)
benefit to the extent such benefit was fully vested as of December 31, 2007,
less deductions required by law, subject to the terms of that certain letter
dated December 20, 2006 from Zale to Executive.  Any such SERP benefit payment shall be paid to
Executive within five (5) days after the Effective Date by wire transfer.  Executive represents
and warrants that he has returned to Zale his employee identification badge,
keys, and all Company-owned equipment and documents and will not maintain
copies of the same.

 

(d)                                 Executive
represents and warrants that he has reconciled his outstanding expenses and
advances with Zale, has paid Zale any outstanding balance owed and agrees that
Zale does not owe any reimbursement or other payment for expenses or otherwise except
as specifically set forth herein.

 

7.             Executive agrees to
cooperate fully with Zale, specifically including any attorney or other
consultant retained by Zale, in connection with any pending or future
litigation, arbitration, business, or investigatory matter.  The Parties acknowledge and agree that such
cooperation may include, but shall in no way be limited to, Executive’s making
himself available for interview by Zale, or any attorney or other consultant
retained by Zale, and providing to Zale any documents in his possession or
under his control.  Zale agrees to
provide Executive with reasonable notice of the need for assistance when
feasible.  Zale additionally agrees to
schedule such assistance in such a manner as not to interfere with any
alternative employment obtained by Executive when possible.

 

8.             Executive acknowledges that he has had
access to and become familiar with various trade secrets and proprietary and
confidential information of Zale, its subsidiaries and affiliates, including,
but not limited to: identities, responsibilities, contact information,
performance and/or compensation levels of employees, costs and methods of doing
business, systems, processes, computer hardware and software, compilations of
information, third-party IT service providers and other Company vendors,
records, sales reports, sales procedures, financial information, customer
requirements, pricing techniques, customer lists, price lists, information
about past, present, pending and/or planned Company transactions, and other
confidential information (collectively, referred to as “Trade Secrets”)
which are owned by Zale, its subsidiaries and/or affiliates and/or successors,
including, without limitation, Finlay Fine Jewelry Corporation and Finlay
Enterprises, Inc. (collectively, “Successors”) and regularly used
in the operation of its business, and as to which Zale, its subsidiaries and/or
affiliates take precautions

 

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to prevent dissemination to persons other than certain directors,
officers and employees.  Executive
acknowledges and agrees that the Trade Secrets (1) are secret and not
known in the industry; (2) give the Company or its subsidiaries and/or
affiliates and/or Successors an advantage over competitors who do not know or
use the Trade Secrets; (3) are of such value and nature as to make it
reasonable and necessary to protect and preserve the confidentiality and
secrecy of the Trade Secrets; and (4) are valuable and special and unique
assets of Zale or its subsidiaries and/or affiliates and/or Successors, the
disclosure of which could cause substantial injury and loss of profits and
goodwill to Zale or its subsidiaries and/or affiliates and/or Successors.

 

(a)                                  Executive
shall not use in any way or disclose any of the Trade Secrets, directly or
indirectly, at any time in the future, unless the information becomes public
knowledge other than as a result of an unauthorized disclosure by the Executive.  All files, records, documents, information,
data, and similar items relating to the business of Zale and/or its Successors,
whether prepared by Executive or otherwise coming into his possession, will
remain the exclusive property of Zale and/or its Successors, as applicable, and
in any event must be promptly delivered to Zale upon execution of this
Agreement.

 

(b)                                 Executive
agrees that upon his receipt of any formal or informal request, requirement,
subpoena, process, or other action seeking Executive’s direct or indirect
disclosure or production of any Trade Secrets to any entity, agency, tribunal,
or person, in connection with a judicial, administrative or other proceeding, Executive
shall promptly and timely notify Zale, and promptly and timely provide a
description and, if applicable, hand deliver a copy of such request,
requirement, subpoena, process or other action to Zale.  In all such instances, Executive irrevocably
nominates and appoints Zale (including any attorney retained by Zale) as his
true and lawful attorney-in-fact to act in Executive’s name, place and stead to
perform any act that Executive might perform to defend and protect against any
disclosure of any Trade Secret.  For
purposes of this Paragraph 8, this Agreement shall be considered a Trade
Secret.

 

9.             The Company and Executive expressly agree
that trade secrets and confidential and proprietary information were provided
to Executive during his employment with Zale. 
As a material inducement for the Company to provide such trade secrets
and confidential and proprietary information to Executive, Executive previously
agreed in his Employment Agreement dated May 21, 2004 (“Employment
Agreement”) and, for independent consideration, now acknowledges and agrees
that for a period of one (1) year from the Separation Date he will not,
directly or indirectly, compete with the Company or any Releasee by providing
services to any other person, partnership, association, corporation, or other
entity that is in a “Competing Business.”  As used herein, a “Competing Business”
is any business that engages in whole or in part in the retail sale of jewelry
in the United States, Canada and/or Puerto Rico, including, but not limited to,
specialty jewelry retailers and other retailers or wholesalers having retail
jewelry divisions, departments, or operations and the Executive’s employment
function or affiliation with the Competing Business is directly or indirectly
related to such business of jewelry.  The
one (1) year period shall expire on the date that is one (1) year
after the Separation Date;

 

5

 

provided however, that such one (1) year period shall be tolled on
a day-for-day basis for each day during which the Executive participates in any
activity in violation of such restrictions. 
Further, except as expressly permitted below, Executive represents,
warrants and covenants that he has not and will not, from the Separation Date
through the Effective Date and until the date that is one (1) year
after the Separation Date, directly or indirectly, compete(d) with the
Company or any Releasee by providing services to any other person, partnership,
association, corporation, or other entity that is in a Competing Business, and Executive
agrees that such representation survives this Agreement indefinitely.  The Parties agree that the above restrictions
on competition are completely severable and independent agreements supported by
good and valuable consideration and, as such, shall survive the termination of
this Agreement for whatever reason.  The
Parties further agree that any invalidity and unenforceability of any one or
more of such restrictions shall not render invalid or unenforceable the
remaining restrictions on competition. 
Additionally, should an arbitrator and/or court of competent
jurisdiction determine that the scope of any provision of this Paragraph 9 is
too broad to be enforced as written, the Parties intend that the arbitrator
and/or court reform the provision to such narrower scope as it determines to be
reasonable and enforceable.  This Paragraph
is a material inducement to the benefits provided under this Agreement.  Any Releasee may enforce this Paragraph
without posting a bond.  Notwithstanding
the foregoing, Executive may be employed by Robert Lee Morris Inc., whose
corporate offices are located at 233 Spring Street, New York, NY  10013, during the foregoing one (1) year period.

 

10.           For a period of three (3) years from
the Separation Date, Executive acknowledges and agrees that he shall not, on his
own behalf or on behalf of any other person, partnership, association,
corporation, or other entity, (a) directly, indirectly, or through a third
party hire or cause to be hired; (b) directly, indirectly or through a
third party solicit; or (c) in any manner attempt to influence or induce
any employee of any Releasee or any of their subsidiaries or affiliates to
leave the employment of such Releasee any of their subsidiaries or affiliates,
nor shall he use or disclose to any person, partnership, association,
corporation or other entity any information obtained concerning the names and
addresses of any Releasee’s employees. 
The three (3) year period contained in this Paragraph 10 shall be
tolled on a day-for-day basis for each day during which the Executive
participates in any activity in violation of such restrictions.  Executive represents and warrants that he has
not violated the restrictions contained in this Paragraph 10, and agrees that
his representation survives this Agreement indefinitely.  Executive agrees that the above restrictions
on hiring and solicitation are completely severable and independent agreements
supported by good and valuable consideration and, as such, shall survive the
termination of this Agreement for whatever reason.  Executive further agrees that any invalidity
and unenforceability of any one or more of such restrictions on hiring and
solicitation shall not render invalid or unenforceable any remaining
restrictions on hiring and solicitation. 
Additionally, should an arbitrator and/or court of competent
jurisdiction determine that the scope of any provision of this Paragraph 10 is
too broad to be enforced as written, Executive agrees and intends that the
arbitrator and/or court reform the provision to such narrower scope as it determines
to be reasonable and enforceable.  This Paragraph
is a material inducement to the benefits provided under this Agreement.  Any Releasee may enforce this Paragraph
without posting a bond.

 

6

 

11.           By entering into this Agreement, the Parties
do not admit, and do specifically deny, any violation of any contract, local,
state, or federal law, common or statutory. 
Neither the execution of this Agreement nor compliance with its terms,
nor the consideration provided for herein shall constitute or be construed as
an admission by any party (or any party’s agents, representatives, attorneys,
or employers) of any fault, wrongdoing, or liability whatsoever, and the
Parties acknowledge that all such liability is expressly denied.  This Agreement has been entered into in
release and compromise of claims as stated herein and to avoid the expense and
burden of dispute resolution.

 

12.           If any provision or term of this Agreement
is held to be illegal, invalid, or unenforceable, such provision or term shall
be fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement.  Furthermore, in lieu of each such illegal,
invalid, or unenforceable provision or term there shall be added automatically
as a part of this Agreement another provision or term as similar to the
illegal, invalid, or unenforceable provision as may be possible and that is
legal, valid, and enforceable.

 

13.           This Agreement constitutes the entire
Agreement of the Parties, and supersedes all prior and contemporaneous
negotiations and agreements, oral or written, with respect to its subject
matter, except that this Agreement specifically incorporates as if fully set
forth herein Paragraphs 8, 9, 10, 11, and 12 of the Employment Agreement; provided,
however, that to the extent a conflict exists between the terms of this
Agreement and the terms of Paragraphs 8, 9, 10, 11, and/or 12 of the Employment
Agreement, the terms of this Agreement shall and hereby do control. Subject to
the foregoing sentence, all prior and contemporaneous negotiations and
agreements are deemed incorporated and merged into this Agreement and are
deemed to have been abandoned if not so incorporated.  No representations, oral or written, are being
relied upon by any party in executing this Agreement other than the express
representations of this Agreement.  This
Agreement cannot be changed or terminated without the express written consent
of the Parties.

 

14.           This Agreement shall be exclusively governed
by and construed in accordance with the laws of the State of Texas without
regard to the conflicts of laws provisions of Texas law, or of any other
jurisdiction, except where preempted by federal law.  The Parties hereby agree that any action to enforce
an arbitrator’s award pursuant to Section 15 shall be filed exclusively in
a state or federal court of competent jurisdiction in Dallas County, Texas and
the parties hereby consent to the exclusive jurisdiction of such court; provided,
however, that nothing herein shall preclude the Parties’ rights to conduct
collection activities in the courts of any jurisdiction with respect to the
order or judgment entered upon the arbitrator’s award by the Texas court.

 

15.           The parties to any
controversy or claim (including all claims pursuant to common and statutory
law) arising out of or relating to this Agreement or arising out of or relating
to the subject matter of this Agreement or Executive’s employment or other
relationship with any Releasee or the cessation of Executives’ employment or
other

 

7

 

relationship with any Releasee (collectively and individually, a “Claim”)
agree that any and all Claims shall be resolved exclusively through binding
arbitration.  Subject to the terms and
any exceptions provided in this Agreement, the parties each waive the right to
a jury trial and waive the right to adjudicate their Claims outside the
arbitration forum provided for in this Agreement.  The arbitration shall be administered by a
single neutral arbitrator admitted to practice law in Texas for a minimum of
ten (10) years.  Any such
arbitration proceeding shall take place in Dallas County, Texas and shall be
administered by the American Arbitration Association (“AAA”)-Dallas
office in accordance with its then-current applicable rules and
procedures.  The arbitrator will have the
authority to award the same remedies, damages and costs that a court could
award.  The arbitrator shall issue a
reasoned award explaining the decision, the reasons for the decision and any
damages awarded.  The arbitrator’s
decision will be final and binding.  This
provision can be enforced under the Federal Arbitration Act.

 

(a)                                  As the sole exception
to the exclusive and binding nature of the arbitration commitment set forth
above, Executive agrees that any Releasee shall have the right to initiate an
action in a court of competent jurisdiction to request temporary, preliminary
and permanent injunctive or other equitable relief, including specific performance,
to enforce the terms of Paragraphs 1, 2, 3, 8, 9, and 10 of this Agreement and
Paragraphs 8, 9, 10, 11, 12 of the Employment Agreement without the necessity
of proving inadequacy of legal remedies or irreparable harm or posting
bond.  Nothing herein shall prevent any
Releasee from pursuing the same injunctive and equitable relief in the
arbitration proceedings.  Moreover,
nothing in this Paragraph should be construed to constitute a waiver of the Releasees’
rights and obligations to arbitrate regarding matters other than those
specifically addressed in this Paragraph.

 

(b)                                 Should a court of
competent jurisdiction determine that the scope of the arbitration and related
provisions of this Agreement are too broad to be enforced as written, the Parties
intend that the court reform the provision in question to such narrower scope
as it determines to be reasonable and enforceable, and enforce the agreement to
arbitrate set forth herein.

 

(c)                                  In the event of
arbitration under the terms of this Agreement, the fees charged by AAA and/or
the individual arbitrator shall be borne equally by the parties.  The parties shall each bear their own costs
and attorneys’ fees incurred in arbitration; provided, however, that
should a party sue in court or bring an arbitration action against another party
for a breach of any provision of this Agreement or regarding a dispute arising
from the subject matter of this Agreement, the prevailing party shall be
entitled to recover its attorneys’ fees, court costs, arbitration expenses, and
its portion of the fees charged by AAA and/or the individual arbitrator, as
applicable, regardless of which party initiated the proceedings.

 

(d)                                 The Parties further
agree that Zale may suspend any payments due under this Agreement pending the outcome
of litigation and/or arbitration regarding a breach of any provision of this
Agreement or regarding a dispute arising from or related

 

8

 

to the subject matter of this Agreement and, in the event that any
litigation and/or arbitration is instituted regarding a breach of any provision
of this Agreement or regarding a dispute arising from or related to the subject
matter of this Agreement, Executive must immediately return all Severance Pay
previously paid under this Agreement pending the resolution of such litigation
and/or arbitration.

 

16.           One or more waivers of a breach of any
covenant, term, or provision of this Agreement by any Party or other Releasee shall
not be construed as a waiver of a subsequent breach of the same covenant, term,
or provision, nor shall it be considered a waiver of any other then existing or
subsequent breach of a different covenant, term, or provision.

 

17.                                 By
executing this Agreement, Executive acknowledges that he:

 

(a)                                  may take up to forty-five
(45) calendar days from the Separation Date (until May 27, 2008) to
consider whether or not he desires to execute this Agreement;

 

(b)                                  may  revoke  this  Agreement  at  any  time  during  the  seven  (7)  calendar  day  period  after  he  signs  and  delivers  this  Agreement  to  Zale.  Any  such  revocation  must  be  in  writing  and  delivered  to  Zale’s  Senior  Vice  President  of  Human  Resources,  Mary  Ann  Doran,  by  the  seventh  (7th)  calendar  day.  Executive  understands  that  this  Agreement  is  not  effective,  and  Executive  is  not  entitled  to  the  Severance  Pay  and  benefits  in  Paragraphs  6(a)-(b),  until  the  expiration  of  this  seven  (7)  calendar  day  revocation  period.  Executive  understands  that  upon  the  expiration  of  such  seven  (7)  calendar  day  revocation  period  this  entire  Agreement  will  be  binding  upon  Executive  and  will  be  irrevocable;

 

(c)                                  has carefully read
and fully understands all of the provisions of this Agreement and that any and
all questions regarding the terms of this Agreement have been asked and
answered to his complete satisfaction;

 

(d)                                 knowingly and
voluntarily agrees to all of the terms set forth in this Agreement and to be
bound by this Agreement;

 

(e)                                  is hereby advised in
writing to consult with an attorney and tax advisor of his choice prior to executing
this Agreement and has had the opportunity and sufficient time to seek such
advice;

 

(f)                                    understands that
rights or claims under the Age Discrimination in Employment Act that may arise
after the date this Agreement is executed are not waived;

 

(g)                                 agrees and
acknowledges that the severance pay and benefits in Paragraphs 6(a)-(b) constitute
adequate consideration to support Executive’s agreements and covenants in this
Agreement; and

 

(h)                                 acknowledges receipt
of the ADEA Information Notice attached hereto as Exhibit A.

 

9

 

18.           The “Effective Date” of this
Agreement is the date that is eight (8) days following the date on which
Executive signs this Agreement, so long as Executive has not revoked acceptance
of this Agreement before such date.

 

19.           By executing this Agreement, Executive also
acknowledges that he (a) is not relying upon any statements,
understandings, representations, expectations, or agreements other than those
expressly set forth in this Agreement; (b) has made his own investigation
of the facts and is relying solely upon his own knowledge and the advice of his
own legal counsel; and (c) knowingly waives any claim that this Agreement was
induced by any misrepresentation or nondisclosure and any right to rescind or
avoid this Agreement based upon presently existing facts, known or
unknown.  The Parties stipulate that each
Party is relying upon these representations and warranties in entering into
this Agreement.  These representations
and warranties shall survive the execution of this Agreement.

 

20.           All terms and provisions of this Agreement,
and the drafting of this Agreement, have been negotiated by the Parties at arm’s
length and to mutual agreement, with consideration by and participation of each,
and no party shall be deemed the scrivener of this Agreement.

 

PLEASE READ CAREFULLY. THIS CONFIDENTIAL
SEPARATION AGREEMENT AND RELEASE INCLUDES THE RELEASE OF ALL CLAIMS AGAINST THE
COMPANY, KNOWN OR UNKNOWN, THAT MAY HAVE OCCURRED AS OF THE DATE OF THIS
AGREEMENT, INCLUDING ALL CLAIMS ARISING UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT.  THIS AGREEMENT ALSO
CONTAINS A PROVISION REQUIRING THE PARTIES TO RESOLVE ANY DISPUTES BY
ARBITRATION.

 

[Signature Page Follows]

 

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EXECUTED in New
York, New York on this 18th day of April, 2008

 

 

	
  Date:

  	
  April 18,
  2008

  	
   

  	
  /s/ Charles
  E. Fieramosca

  
	
   

  	
   

  	
  EXECUTIVE

  

 

 

EXECUTED in Irving, Texas on this 28th day of April, 2008

 

 

	
   

  	
   

  	
   

  	
  ZALE
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  April 28,
  2008

  	
   

  	
  By:

  	
  /s/ Theo
  Killion

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  EVP, Human
  Resources, Legal and

  
	
   

  	
   

  	
   

  	
  Corporate
  Strategy

  

 

 

EXECUTED in Irving, Texas on this 28th day of April, 2008

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ZALE
  DELAWARE, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  April 28,
  2008

  	
   

  	
  By:

  	
  /s/ Theo
  Killion

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  EVP, Human
  Resources, Legal and 

  
	
   

  	
   

  	
   

  	
  Corporate
  Strategy

  

 

11

 

EXHIBIT A

 

ADEA INFORMATION NOTICE

 

Zale Corporation (“Zale”) is engaged in a reduction in force of
employees who worked in the Bailey Banks & Biddle brand.  You are among the employees who were selected
for termination.  Accordingly, your
employment with Zale will end on January 31, 2008.  In connection with your termination, you are
eligible to receive separation payments and benefits according to the terms of
the foregoing Confidential Separation Agreement and Release (“Agreement”).  By executing the Agreement, you will waive
all claims under the Age Discrimination in Employment Act (“ADEA”).

 

In accordance with the ADEA, the Company is providing you the following
information:

 

·                  Below
is a list of job titles and ages of those selected for termination in the
reduction in force and who are eligible for the separation payments and
benefits, and those in the same job classification who were not selected for termination
and who are not eligible for the separation payments and benefits.

 

·                  The
eligibility factors used to determine who was selected for the reduction in
force and eligible for the separation payments and benefits were:  (i) the elimination of all positions
within in the Bailey Banks & Biddle brand as a result of the sale of
Bailey Banks & Biddle; and (ii) the skills and qualifications
needed for positions elsewhere within the Company.

 

·                  Eligible
employees who wish to receive the separation payments and benefits will have up
to 45 days to review the terms and conditions of the Agreement and seven (7) calendar
days to revoke the Agreement.

 

	
  Job Title

  	
   

  	
  Age of Employees Selected 

  and Eligible to Receive 

  Separation Payments and 

  Benefits

  	
   

  	
  Age of Employees Not 

  Selected and Not Eligible for 

  the Separation Payments and 

  Benefits

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  President

  	
   

  	
  59

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SVP Operations

  	
   

  	
   

  	
   

  	
  54

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VP DMM

  	
   

  	
  49

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VP Marketing

  	
   

  	
  55

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Director Planning/Analysis

  	
   

  	
  50

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Director Merchandise Planning

  	
   

  	
   

  	
   

  	
  39

  	
   

  

 

12

 

	
  Buyer

  	
   

  	
  31, 32, 41, 44, 57

  	
   

  	
  44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Associate Buyer

  	
   

  	
  27

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Merchandise Planner

  	
   

  	
   

  	
   

  	
  27

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manager, Store Ops Admin

  	
   

  	
   

  	
   

  	
  35

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manager, Expense Admin.

  	
   

  	
   

  	
   

  	
  39

  	
   

  
	
   

  	
   

  	
  30, 49

  	
   

  	
   

  	
   

  
	
  Manager, Marketing

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Assistant Buyer

  	
   

  	
  24, 29

  	
   

  	
  25, 32

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project Manager Marketing

  	
   

  	
  54

  	
   

  	
  40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Project Manager PR & Special
  Events

  	
   

  	
  30

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executive Secretary

  	
   

  	
  45

  	
   

  	
  39, 49

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sold Order Assistant

  	
   

  	
  49, 59

  	
   

  	
  46

  	
   

  

 

13UTSTARCOM, INC.

AMENDED AND RESTATED

VICE PRESIDENT CHANGE IN CONTROL
AND

INVOLUNTARY TERMINATION SEVERANCE
PAY PLAN

 

1.                                       Introduction.  The purpose of this UTStarcom, Inc. Vice
President Change in Control and 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           “Determination Period” means the time period beginning on
the date of the Change in Control and ending eighteen (18) months following the
Change in Control.

 

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

 

2.10         “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

 

2.11         “Effective Date” means June 20, 2006.

 

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

 

2.13         “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.

 

2.14         “Involuntary Termination” means a termination of employment
of a Covered Employee under the circumstances described in Section 4.1 or Section 4.2.

 

2.15         “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).

 

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

 

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

 

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

 

2.19         “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 4.4.

 

3

 

4.                                       Severance Benefit.

 

4.1           Involuntary Termination Apart From a Change in
Control.  If at any time
before a Change in Control or after the Determination Period following a Change
in Control, 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 for Good
Reason, then, subject to the Covered Employee’s compliance with Section 4.4,
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 two (2) weeks of Base Pay for each year of service with
the Company, with a minimum payment equal to six (6) months of Base Pay,
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 six (6) months
of the premiums for continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended  (“COBRA”)
for the  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 in a lump
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 not receive any accelerated vesting on his or her outstanding
and unvested equity compensation awards. 
The Covered 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.

 

4.2           Involuntary Termination Following a Change in Control. 
If at any time within the Determination Period following a Change in
Control, 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 for Good
Reason, then, subject to the Covered Employee’s compliance with Section 4.4,
the Covered Employee shall receive the following Severance Benefit from the
Company:

 

  4.2.1                  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

 

4.2.2                        Health
Benefits.  The Company shall
pay to the Covered Employee an amount equal to twelve (12) months of the
premiums for continuation coverage under 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 in a
lump sum 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.

 

4.2.3                        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.

 

4.3                                 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 4.3,
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 4.3 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 required by this Section 4.3, 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 4.3.

 

4.4                                 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

 

5

 

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.

 

4.5         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 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 

 

6

 

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” 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 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 

 

7

 

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 nor 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.

 

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.

 

8

 

21.           Additional
Information.

 

	
  Plan Name:

  	
   

  	
  UTStarcom, Inc. Vice President Change in
  Control and 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.

  

 

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.

 

9

 

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.

 

23.           Execution.

 

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

 

 

	
   

  	
  UTStarcom, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  	
   

  
				

 

10

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