8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 26, 2007

UTSTARCOM, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-29661	52-1782500
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1275 Harbor Bay Parkway

Alameda, California 94502

(Address of principal executive offices)    (Zip code)

(510) 864-8800

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 26, 2007, and November 30, 2007, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of UTStarcom, Inc. (the “Company”) took the following actions at meetings duly held and noticed:

2007 Equity Awards for 2006 Performance

As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 2, 2007, at a meeting held February 1, 2007, the Compensation Committee determined that certain of the Company’s named executive officers (each an “NEO”) would be eligible to receive the following performance-based equity awards:

Named Executive Officer	Restricted Stock Award
Hong Liang Lu, Chief Executive Officer	117,000
Francis P. Barton, EVP and Chief Financial Officer	46,000

At the time the Compensation Committee determined the NEOs’ eligibility for the awards set forth above, the Company was not current in its periodic filings with the SEC and the Compensation Committee thus delayed the approval of issuance of the shares until a later time.  At its meeting held November 26, 2007, the Compensation Committee approved the issuance of the shares to Messrs. Lu and Barton as set forth above.

Grant of 2007 Focal Award

The Compensation Committee approved the grant of shares of restricted stock and restricted stock units (“RSUs”) under the Company’s 2006 Equity Incentive Plan (the “Plan”) to certain NEOs effective November 30, 2007, as follows:

Named Executive Officer	Equity Award	Vesting Schedule
Hong Liang Lu	133,543 shares of restricted stock	Four-year vesting as follows: 25% on 2/29/08; 25% on 2/27/09; 25% on 2/26/10; and 25% on 2/28/11
	267,086 RSUs	Performance based (as described below)
	40,000 shares of restricted stock	Vests as to 100% of the shares on November 30, 2008
Francis P. Barton	44,781 RSUs	Four-year vesting as follows: 25% on 2/29/08; 25% on 2/27/09; 25% on 2/26/10; and 25% on 2/28/11
	89,562 RSUs	Performance based (as described below)

The performance-based RSUs will vest with respect to each NEO based on management performance objectives established and tailored for each NEO by the Committee for the Company’s 2007 fiscal year, including (i) achievement of corporate financial measures such as bookings, gross margin, revenue, operating profit, cash flow, inventory turns, contribution margin, cost reduction and cash collections, (ii) achievement of corporate objectives relating to quality and organization, and (iii) achievement by such NEO of additional individualized performance objectives reviewed and approved by the Compensation Committee. Performance will be measured against the established objectives and, to the extent the established objectives have been achieved, the number of performance-based RSUs  earned by

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each NEO shall be determined by the Compensation Committee, in its sole discretion, provided that such NEO remains a service provider (as defined in the Plan) of the Company on the date of determination. The Compensation Committee’s determination as to the extent the established objectives have been achieved shall be made as soon as administratively practicable following the end of the 2007 fiscal year.  Following the determination of the number of RSUs earned by each NEO, 50% of the earned RSUs shall vest on February 29, 2008 and 50% on February 27, 2009, provided that such NEO remains a service provider of the Company (as defined in the Plan) on those dates.

Each RSU represents a contingent right to receive one share of the Company’s common stock on the vesting date.  The grants were made as part of the Company’s annual focal awards process which was postponed from February 2007 due to the Company not being current in its SEC filings at that time.  The awards were made subject to the standard terms and conditions of the restricted stock and restricted stock unit agreements under the Plan, as previously filed with the SEC.  In the event an NEO’s employment with the Company terminates as a result of death or “disability” (as defined in the Plan), the NEO’s award will vest in full upon the date of termination.

Amendment of Change of Control Agreement with Chief Executive Officer

The Compensation Committee approved an Amended and Restated Change of Control/Involuntary Termination Severance Agreement between the Company and Hong Liang Lu, the Company’s Chief Executive Officer (the “Lu Change of Control Agreement”), effective November 30, 2007.  A copy of the Lu Change of Control Agreement is attached hereto as Exhibit 10.1.  The Lu Change of Control Agreement amends Mr. Lu’s previous Change of Control Severance Agreement with the Company dated January 17, 2003, as previously filed with the SEC.  The Lu Change of Control Agreement has a term of three (3) years from November 30, 2007.  Following the expiration of the three-year term, Mr. Lu and the Company may, but are not obligated to, enter into a new agreement.  If Mr. Lu’s employment continues following the expiration of the three-year term and the Company and Mr. Lu do not enter into a new agreement, Mr. Lu’s then current benefits arrangements shall continue in accordance with the terms of the Lu Change of Control Agreement until the parties agree otherwise.

The Lu Change of Control Agreement provides that if Mr. Lu’s employment with the Company is terminated as a result of an “involuntarily termination” by the Company, or terminated by Mr. Lu for “good reason” (as both terms are defined in the Lu Change of Control Agreement), at any time within 18 months after a change of control, he shall be entitled to the following severance benefits:  (i) 24 months of base salary as in effect as of the date of such termination and 200% of his full annual performance target bonus for the year in which termination occurs, less applicable withholding, payable in a lump sum within 30 days of termination, (ii) all equity awards including, without limitation, option grants, restricted stock and stock purchase rights, granted to Mr. Lu prior to the change of control will become fully vested or released from the Company’s repurchase right (if any shares of stock purchased by or granted to Mr. Lu prior to the change of control remain subject to that repurchase right)  and exercisable as of the date of termination to the extent such equity awards are outstanding and unexercisable or unreleased at the time of such termination, (iii) Mr. Lu would be permitted to exercise such vested equity awards for 12 months from the date of termination, and (iv) the Company will pay an amount equal to 12 months of health insurance premiums for continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), at the same level of coverage in effect for Mr. Lu on the day preceding the date of his termination of employment, payable in a lump sum within 30 days of the date of termination.

The Lu Change of Control Agreement also provides that if Mr. Lu’s employment with the Company is terminated as a result of an “involuntarily termination” by the Company or terminated by Mr. Lu for “good reason” (both as defined in the Lu Change of Control Agreement) during the term of the Lu

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Change of Control Agreement, apart from a change of control, he shall be entitled to the following severance benefits:  (i) 24 months of base salary as in effect as of the date of such termination, and 100% of his full annual performance target bonus for the year in which termination occurs, less applicable withholding, payable in a lump sum within 30 days of termination (ii) all equity awards, including without limitation option grants, restricted stock and stock purchase rights, granted to Mr. Lu will become fully vested or released from the Company’s repurchase right (if any shares of stock purchased by or granted to Mr. Lu remain subject to such repurchase right) and exercisable to the extent such equity awards are outstanding and unexercisable or unreleased at the time of such termination, (iii) Mr. Lu would be permitted to exercise such vested equity awards for 12 months from the date of termination, and (iv) the Company will pay an amount equal to 12 months of health insurance premiums for continuation coverage pursuant to COBRA, at the same level of coverage in effect for Mr. Lu on the day preceding the date of his termination of employment, payable in a lump sum within 30 days of the date of termination.

If Mr. Lu’s employment by the Company terminates for “Cause” (as defined in the Lu Change of Control Agreement) or Mr. Lu terminates his employment for other than “good reason” (as defined in the Lu Change of Control Agreement), Mr. Lu will not be entitled to receive severance or other benefits under the Lu Change of Control Agreement, except those benefits required to be provided by law.

In addition, in the event of Mr. Lu’s death or “disability” (as defined in the applicable equity plans) during Mr. Lu’s employment with the Company, all of Mr. Lu’s equity awards will vest and, if applicable, become exercisable.

Barton Retention Agreement.

The Compensation Committee approved the terms of a retention plan, effective November 30, 2007, for Francis P. Barton, the Company’s Executive Vice President and Chief Financial Officer (the “Retention Agreement”), as described below.  The Compensation Committee approved the Retention Agreement after taking into consideration:  (i) Mr. Barton’s performance during a challenging year, including completing the Company’s previously disclosed stock option and historical sales contract investigations, bringing the Company current in its SEC filings and improving the Company’s Section 404 compliance process; (ii) the critical nature of Mr. Barton’s current and future role in light of anticipated management transitions in fiscal year 2008; and (iii) increasing competition in the market for experienced financial professionals.  The Committee also determined that, while the retention incentive described below could be awarded in equity and/or cash, the Committee’s intent was to grant equity to the extent possible under the terms of the Plan in order to increase Mr. Barton’s incentive as an owner and shareholder to drive the Company toward profitability.  A copy of the Retention Agreement is attached hereto as Exhibit 10.2.

The Retention Agreement provides that the Company will provide a retention incentive to Mr. Barton with a total value of $10,000,000 (the “Retention Incentive”), consisting of a combination of restricted stock, RSUs, performance shares and performance units (together, “Equity”) to be granted under the Plan and/or cash, in the sole discretion of the Compensation Committee. Each installment of the Retention Incentive will be awarded in a combination of Equity, in the Committee’s sole discretion, up to the annual maximum amounts permitted under the Plan after taking into account Mr. Barton’s focal awards for each particular year.  The first installment was awarded effective November 30, 2007 (see below), and the remaining installments are expected to be awarded each January thereafter. Because of limits on the maximum amount of Equity that can be granted to an individual in any calendar year under the Plan, the Company expects that the Retention Incentive will be awarded over a number of years, so that as much of the Retention Incentive can be awarded under the Plan as possible. The first installment of the Retention Incentive will vest as to $2,500,000 in value on November 30, 2007, and the remaining installments will vest as to $2,500,000 in value on each November 30 thereafter until the full $10,000,000 in value has vested.  For purposes of determining the vested value, the value of Equity to vest will be based on the Fair Market Value (as defined in the Plan) of the Company’s common stock on the applicable date of grant.

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In the event Mr. Barton’s employment with the Company terminates in a manner that would trigger the payment of severance benefits under his Amended and Restated Change of Control/Involuntary Termination Severance Agreement dated August 23, 2006 as previously filed with the SEC (the “Barton Change of Control Agreement”), or as a result of his death or “disability” (as defined in the Plan), Mr. Barton would be entitled to a cash payment equal to the amount of the Retention Incentive that had not been granted in Equity as of the date of such termination of employment.  The vesting of any Equity granted as part of the Retention Incentive may also accelerate pursuant to the terms of the Barton Change of Control Agreement.  In addition, if Mr. Barton’s employment with the Company terminates as a result of his death or “disability” (as defined in the Plan), any Equity granted pursuant to the Retention Agreement will vest in full as of the date of termination.

The Compensation Committee approved the grant of the first installment of Equity pursuant to Mr. Barton’s Retention Incentive effective November 30, 2007, as follows:  254,000 shares of restricted stock, 165,657 RSUs, 300,000 performance shares and 689,655 performance units.  The grants were made subject to the standard terms and conditions of the applicable agreements under the Plan.  The standard forms of restricted stock purchase agreement and restricted stock unit agreement used in connection with the Plan were previously filed with the SEC.  The standard forms of performance share and performance unit agreements are attached hereto as Exhibits 10.3 and 10.4, respectively.

On November 30, 2007 (the vesting date of the first $2,500,000 in value of Mr. Barton’s Retention Incentive), the closing price of the Company’s common stock as quoted on the Nasdaq Global Select Market was $2.90 and therefore 689,655 performance units and 172,414 performance shares, with a value of approximately $2,500,000, vested on November 30, 2007.  The remaining unvested performance shares, RSUs and shares of restricted stock granted in the first installment of the Retention Incentive will vest on November 30, 2008, subject to Mr. Barton continuing as a “service provider” (as defined in the Plan) through such date.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed pursuant to Item 5.02:

Exhibit No.	Description
10.1	Amended and Restated Change of Control/Involuntary Termination Severance Agreement between the Company and Hong Liang Lu, dated November 30, 2007
10.2	Retention Agreement between the Company and Francis P. Barton dated November 30, 2007
10.3	Performance Share Agreement for use pursuant to the 2006 Equity Incentive Plan
10.4	Performance Unit Agreement for use pursuant to the 2006 Equity Incentive Plan

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UTSTARCOM, INC.
Date: November 30, 2007	By:	/s/ SUSAN MARSCH
	Name:	Susan Marsch
	Title:	Vice President, General Counsel and Corporate Secretary

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EXHIBITS

Exhibit No.	Description
10.1	Amended and Restated Change of Control/Involuntary Termination Severance Agreement between the Company and Hong Liang Lu, dated November 30, 2007
10.2	Retention Agreement between the Company and Francis P. Barton dated November 30, 2007
10.3	Performance Share Agreement for use pursuant to the 2006 Equity Incentive Plan
10.4	Performance Unit Agreement for use pursuant to the 2006 Equity Incentive Plan

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EX-10.1

Exhibit 10.1

UTSTARCOM, INC.

AMENDED AND RESTATED CHANGE OF CONTROL/INVOLUNTARY TERMINATION

SEVERANCE AGREEMENT

This Change of Control/Involuntary Termination Severance Agreement (the “Agreement”) is made and entered into effective as of November 30, 2007 (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 which provided the Employee with severance benefits upon the Employee’s termination of employment under certain circumstances (the “Original Agreement”).

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 provide the Employee with enhanced financial security and sufficient encouragement to remain with the Company and wishes to augment certain terms of the Original Agreement, which is hereby amended and restated in its entirety.

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 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 (i) without the Employee’s express written consent, 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 a reduction in duties, position or responsibilities solely by virtue of the Company being acquired and made part of a larger entity shall not constitute a “Good Reason;” (ii) without the Employee’s express written consent, a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to the Employee immediately prior to such reduction; (iii) a reduction by the Company of the Employee’s base salary as in effect immediately prior to such reduction; (iv) a material reduction by the Company in the kind or level of employee 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; (v) without the Employee’s express written consent, the relocation of the Employee to a facility or a location more than fifty (50) miles from his current location; (vi) 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 (vii) the failure of the Company to obtain the assumption of this Agreement by any successors contemplated in Section 9 below.

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

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(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.

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;

(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;

(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 shall be permitted to exercise his vested equity awards (including awards that vest as a result of the Agreement) for twelve (12) months from the date of termination; 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.

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(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)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;

(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;

(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 shall be permitted to exercise his vested equity awards (including awards that vest as a result of the Agreement) for twelve (12) months from the date of termination; 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.

(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 the Company, reasonably determines that Section 409A of the Code will result in the imposition of additional tax to an earlier payment of any severance or other benefits otherwise due to the Employee pursuant to Section 4 of this Agreement or otherwise on or within the six (6) month period following the Employee’s termination, the severance benefits will accrue during such six

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(6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the Employee’s date of termination.  All subsequent payments, if any, will be payable as provided in this Agreement.  In addition, notwithstanding anything to the contrary in this Agreement, this Agreement will be deemed amended to the extent necessary to avoid imposition of any additional tax or income recognition prior to actual payment to the Employee under Code Section 409A and any temporary, proposed or final Treasury Regulations and guidance promulgated thereunder and the parties agree to cooperate with each other and to take reasonably necessary steps in this regard.  The Employee agrees to work with the Company in good faith to amend this Agreement by December 31, 2008 to comply with the final Treasury Regulations and any subsequent guidance promulgated under Code Section 409A.

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.

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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.

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.

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(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.

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;

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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.

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.

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(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.

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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/ Susan Marsch
	Title:	VP and General Counsel
EMPLOYEE:	/s/ Hong Liang Lu
	Signature
	Hong Liang Lu
	Printed Name

SIGNATURE PAGE TO CHANGE OF CONTROL/
INVOLUNTARY TERMINATION SEVERANCE AGREEMENT

EX-10.2

Exhibit 10.2

UTSTARCOM, INC.

RETENTION AGREEMENT

This Retention Agreement (the “Agreement”) is made November 30, 2007 (the “Effective Date”), by and between Francis P. Barton (“Executive”) and UTStarcom, Inc. (the “Company”).

WHEREAS, Executive is employed as the Company’s Executive Vice President and Chief Financial Officer and serves on the Company’s Board of Directors (the “Board”);

WHEREAS, Executive is a valued member of the Company’s senior management team and has played a critical role in completing the Company’s stock option investigation and assisting the Company to becoming current in its filing requirements with the Securities and Exchange Commission; and

WHEREAS, the Company wishes to provide an incentive to Executive to (i) remain in the employ of the Company and (ii) increase the value of the Company for the benefit of its stockholders.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and in consideration of Executive’s continued employment with the Company, the parties agree as follows:

1.             That the Company will provide Executive a retention incentive with a total value of $10,000,000 (the “Retention Incentive”), as determined herein.

2.             That the Retention Incentive will consist of a combination of restricted stock, restricted stock units, performance shares and performance units (together, “Equity”) granted under the Company’s 2006 Equity Incentive Plan (the “Plan”) and/or cash, in the sole discretion of the Compensation Committee of the Board (the “Committee”).

3.             That the value of the Equity granted to Executive as part of the Retention Incentive will be determined based on the Fair Market Value (as defined in the Plan) of the Company’s common stock on the applicable date of grant.  By way of example only, if the Company were to grant Executive an award of 300,000 shares of restricted stock when the Fair Market Value of the Company’s common stock was $5.00 per share, that award would be valued at $1,500,000 for purposes of determining the value awarded to Executive under Section 1.

4.             That it is the desire of the parties hereto that the Retention Incentive consist of Equity, though the Company retains the right (but not the obligation) to provide the Retention Incentive solely or partially in cash.  Because of the limits on the maximum amount of Equity that can be granted to an individual in any calendar year, it is the expectation of the parties that the Retention Incentive will be awarded over a number of years, so that as much of the Retention Incentive can be awarded under the Plan as possible.

5.             That the Committee will award the first installment of the Retention Incentive to Executive in a combination of Equity in the Committee’s sole discretion, up to the annual maximum

amounts permitted under the Plan after taking into account Executive’s 2007 focal awards, subject to Executive’s continued employment with the Company through the date such awards are granted.

6.             That each January following the Effective Date, the remaining installments of the Retention Incentive will be awarded to Executive in a combination of Equity and/or cash, as determined by the Committee in its sole discretion, with the expectation that the Retention Incentive will be granted in a combination of Equity up to the maximum annual limits permitted under the Plan after taking into account Executive’s focal grant for the particular year, subject to Executive’s continued employment with the Company through each such date.

7.             That the first installment of the Retention Incentive will vest as to $2,500,000 in value on the date the Equity award to be granted pursuant to Section 5 becomes effective consistent with the Company’s Equity Award and Grant Policy and Procedures, and as to $2,500,000 in value on each November 30 thereafter, subject to Executive’s continued employment with the Company through each vesting date.  The Committee will determine in its sole discretion the types of Equity and the amount of Equity and, if applicable, cash that will be eligible to vest on each vesting date.  For these purposes, the value of Equity to vest will be based on the Fair Market Value (as defined in the Plan) of the Company’s common stock on the applicable date of grant.

8.             That in the event Executive’s employment is terminated in a manner that would trigger the payment of severance benefits under the Change of Control/Involuntary Termination Severance Agreement by and between Executive and the Company (the “Severance Agreement”) or Executive’s employment with the Company is terminated as a result of his death or Disability, then Executive shall be entitled to a cash payment equal to the amount of the Retention Incentive that has not been granted in Equity as of the date of such termination.  The receipt of any such payment that arises as a result of a termination of Executive’s employment with the Company that would trigger severance payments under the Severance Agreement will be subject to the same terms and conditions that apply to Executive’s receipt of severance benefits under the Severance Agreement.  For the purposes of this Agreement, “Disability” will have the same meaning given to the term in the Plan.

By way of example only, if the Company terminated Executive’s employment with the Company without Cause (as defined in the Severance Agreement) and as of the date of such termination had granted Executive Equity with a value of $9,000,000 as determined under Section 3, then the Company would make a lump sum cash payment to Executive equal to $1,000,000, subject to the same terms and conditions that apply to Executive’s receipt of severance benefits under the Severance Agreement.

For avoidance of doubt, the vesting of any Equity granted pursuant to the Retention Incentive may also accelerate pursuant to the provisions of the Severance Agreement.  In addition, if Executive’s employment with the Company is terminated as a result of his death or Disability, the vesting of any Equity granted pursuant to the Retention Incentive will become fully vested or released from the Company’s repurchase right as of the date of termination.

9.             That notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A of the Code and any final regulations and

2

guidance promulgated thereunder (“Section 409A”) at the time of Executive’s termination, then only that portion of the severance payable to Executive 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 Benefits”), which (when considered together) do not exceed the Section 409A Limit (as defined below) may be made within the first six (6) months following Executive’s termination of employment in accordance with the payment schedule applicable to each payment or benefit.  Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit otherwise due to Executive on or within the six (6) month period following Executive’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 Executive’s termination of employment.  All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.

For these purposes “Section 409A Limit” will mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

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.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

10.           That all payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

11.           That this Agreement, together with the Plan, the equity award agreements evidencing the Equity awards that will be granted pursuant to this Agreement and the Severance Agreement, represent the entire agreement and understanding between the parties as to the subject matter hereof and supersede all prior or contemporaneous agreements, whether written or oral.  No waiver, alteration or modification of any of the provisions of this Agreement will be binding, unless in writing and signed by duly authorized representatives of the parties hereto.

12.           That this Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

13.           That this Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.  Execution and delivery of this Agreement by exchange of facsimile

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copies bearing the facsimile signature of a party will constitute a valid and binding execution and delivery of the Agreement by such party.  Such facsimile copies will constitute enforceable original documents.

IN WITNESS WHEREOF, this Agreement has been entered into as of the date first set forth above.

UTSTARCOM, INC.			EXECUTIVE
By:	/s/ Susan Marsch		/s/ Francis P. Barton
			Francis P. Barton
Name:		Susan Marsch
Its:	VP and General Counsel		Address:	c/o Company

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EX-10.3

Exhibit 10.3

UTSTARCOM, INC.

2006 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF PERFORMANCE SHARES

Unless otherwise defined herein, the terms defined in the 2006 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Notice of Grant of Performance Shares (the “Notice of Grant”).

Participant:

Address:

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

Date of Grant
Target Number of Performance Shares		[	]
Performance Period		[	]
Performance Matrix	The number of Performance Shares in which you may vest in accordance with the Vesting Schedule below will depend upon achievement [Insert Description of Performance Goal(s)] and will be determined in accordance with the Performance Matrix, attached hereto as Appendix B. [Insert Performance Target(s)].

Vesting Schedule:

The Performance Shares will vest as follows: [Insert Vesting Schedule]

In the event Participant ceases to be a Service Provider for any or no reason before Participant vests in the Performance Shares, the Performance Shares and Participant’s right to acquire any Shares hereunder will immediately terminate.

By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that this Award of Performance Shares is granted under and governed by the terms and conditions of the Plan and the Award Agreement, both of which are made a part of this document.

PARTICIPANT	UTSTARCOM, INC.
Signature	By
Print Name	Title

EXHIBIT A

PERFORMANCE SHARE AWARD AGREEMENT

1.             Grant.  The Company hereby grants to the Participant named in the attached Notice of Grantan Award of Performance Shares, subject to all of the terms and conditions in this AwardAgreement and the Plan, which is incorporated herein by reference.  Subject to Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this AwardAgreement, the terms and conditions of the Plan will prevail.

2.             Company’s Obligation to Pay.  Each Performance Share represents the right to receive a Share on the date it vests.  Unless and until the Performance Shares will have vested in the manner set forth in Section 3, Participant will have no right to payment of any such Performance Shares.  Prior to actual payment of any vested Performance Shares, such Performance Share will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  Any Performance Shares that vest in accordance with Sections 3 or 4 will be paid to Participant (or in the event of Participant’s death, to his or her estate) in whole Shares, subject to Participant satisfying any applicable tax withholding obligations as set forth in Section 7.  Subject to the provisions of Section 4, such vested Performance Shares shall be paid in Shares as soon as practicable after vesting, but in each such case within the period ending no later than the date that is two and one half (2½) months from the end of the Company’s tax year that includes the vesting date.

3.             Vesting Schedule.  Except as provided in Section 4, and subject to Section 5, the Performance Shares awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant.  Performance Sharesscheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this AwardAgreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs.

4.             Administrator Discretion.  The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Performance Shares at any time, subject to the terms of the Plan.  If so accelerated, such Performance Shares will be considered as having vested as of the date specified by the Administrator.

Notwithstanding anything in the Plan or this Award Agreement to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Performance Shares is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the meaning of Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Performance Shares will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s termination as a Service Provider, then the payment of such accelerated Performance Shares will not be made until the date six (6) months and one (1) day following the date of Participant’s termination as a Service Provider, unless the Participant dies following his or her termination as a Service Provider, in which case, the Performance Shares

will be paid in Shares to the Participant’s estate as soon as practicable following his or her death.  It is the intent of this Award Agreement to comply with the requirements of Section 409A so that none of the Performance Shares provided under this Award Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  For purposes of this Award Agreement, “Section 409A” means Section 409A of the Code, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

5.             Forfeiture upon Termination of Status as a Service Provider.  Notwithstanding any contrary provision of this Award Agreement, the balance of the Performance Shares that have not vested as of the time of Participant’s termination as a Service Provider for any or no reason and Participant’s right to acquire any Shares hereunder will immediately terminate.

6.             Death of Participant.  Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate.  Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

7.             Withholding of Taxes.  Notwithstanding any contrary provision of this AwardAgreement, no certificate representing the Shares will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment and other taxes which the Company determines must be withheld with respect to such Shares.  The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit Participant to satisfy such tax withholding obligation, in whole or in part (without limitation) by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount required to be withheld, (c) delivering to the Company already vested and owned Shares having a Fair Market Value equal to the amount required to be withheld, or (d) selling a sufficient number of such Shares otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld.To the extent determined appropriate by the Company in its discretion, it shall have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of Shares otherwise deliverable to Participant.  If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time any applicable Performance Shares otherwise are scheduled to vest pursuant to Sections 3 or 4, Participant will permanently forfeit such Performance Shares and any right to receive Shares thereunder and the Performance Shares will be returned to the Company at no cost to the Company.

8.             Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant.  After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

9.             No Guarantee of Continued Service.  PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE PERFORMANCE SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF PERFORMANCE SHARES OR ACQUIRING SHARES HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

10.Address for Notices.  Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company at UTStarcom, Inc., 1275 Harbor Bay Parkway, Suite 100, Alameda, CA 94502, or at such other address as the Company may hereafter designate in writing.

11.           Grant is Not Transferable.  Except to the limited extent provided in Section 6, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

12.           Binding Agreement.  Subject to the limitation on the transferability of this grant contained herein, this AwardAgreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

13.           Additional Conditions to Issuance of Stock.  If at any time the Company will determine, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Participant (or his or her estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company.  Where the Company determines that the delivery of the payment of any Shares will violate federal securities laws or other applicable laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Shares will no longer cause such violation.  The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.

14.           Plan Governs.  This Award Agreement is subject to all terms and provisions of the Plan.  In the event of a conflict between one or more provisions of this Award Agreement

and one or more provisions of the Plan, the provisions of the Plan will govern.  Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.

15.           Administrator Authority.  The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Performance Shares have vested).  All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons.  No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this AwardAgreement.

16.           Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to Performance Shares awarded under the Plan or future Performance Shares that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17.           Captions.  Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

18.           Agreement Severable.  In the event that any provision in this AwardAgreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

19.           Modifications to the Agreement.  This AwardAgreement constitutes the entire understanding of the parties on the subjects covered.  Participant expressly warrants that he or she is not accepting this AwardAgreement in reliance on any promises, representations, or inducements other than those contained herein.  Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company.  Notwithstanding anything to the contrary in the Plan or this AwardAgreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this Award of Performance Shares.

20.           Amendment, Suspension or Termination of the Plan.  By accepting this Award, Participant expressly warrants that he or she has received an Award of Performance Shares under the Plan, and has received, read and understood a description of the Plan.  Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

21.           Governing Law.  This Award Agreement shall be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof.  For purposes of litigating any dispute that arises under this Award of Performance Shares or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California,

and agree that such litigation shall be conducted in the courts of Alameda County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Award of Performance Shares is made and/or to be performed.

APPENDIX B

PERFORMANCE MATRIX

[INSERT PERFORMANCE MATRIX]

EX-10.4

Exhibit 10.4

UTSTARCOM, INC.

2006 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF PERFORMANCE UNITS

Unless otherwise defined herein, the terms defined in the 2006 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Notice of Grant of Performance Units (the “Notice of Grant”).

Participant:

Address:

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

Date of Grant
Target Number of Performance Units		[	]
Performance Period		[	]
Performance Matrix	The number of Performance Units in which you may vest in accordance with the Vesting Schedule below will depend upon achievement [Insert Description of Performance Goal(s)] and will be determined in accordance with the Performance Matrix, attached hereto as Appendix B. [Insert Performance Target(s)].

Vesting Schedule:

The Performance Units will vest as follows: [Insert Vesting Schedule]

In the event Participant ceases to be a Service Provider for any or no reason before Participant vests in the Performance Units, the Performance Units and Participant’s right to acquire any Units hereunder will immediately terminate.

By Participant’s signature and the signature of the Company’s representative below, Participant and the Company agree that this Award of Performance Units is granted under and governed by the terms and conditions of the Plan and the Award Agreement, both of which are made a part of this document.

PARTICIPANT	UTSTARCOM, INC.
Signature	By
Print Name	Title

EXHIBIT A

PERFORMANCE UNIT AWARD AGREEMENT

1.             Grant.  The Company hereby grants to the Participant named in the attached Notice of Grantan Award of Performance Units, subject to all of the terms and conditions in this AwardAgreement and the Plan, which is incorporated herein by reference.  Subject to Section 19(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this AwardAgreement, the terms and conditions of the Plan will prevail.

2.             Company’s Obligation to Pay.  Each Performance Unit represents the right to receive a Share on the date it vests.  Unless and until the Performance Units will have vested in the manner set forth in Section 3, Participant will have no right to payment of any such Performance Units.  Prior to actual payment of any vested Performance Units, such Performance Unit will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  Any Performance Units that vest in accordance with Sections 3 or 4 will be paid to Participant (or in the event of Participant’s death, to his or her estate) in whole Units, subject to Participant satisfying any applicable tax withholding obligations as set forth in Section 7.  Subject to the provisions of Section 4, such vested Performance Units shall be paid in Shares as soon as practicable after vesting, but in each such case within the period ending no later than the date that is two and one half (2½) months from the end of the Company’s tax year that includes the vesting date.

3.             Vesting Schedule.  Except as provided in Section 4, and subject to Section 5, the Performance Units awarded by this Award Agreement will vest in accordance with the vesting provisions set forth in the Notice of Grant.  Performance Unitsscheduled to vest on a certain date or upon the occurrence of a certain condition will not vest in Participant in accordance with any of the provisions of this AwardAgreement, unless Participant will have been continuously a Service Provider from the Date of Grant until the date such vesting occurs.

4.             Administrator Discretion.  The Administrator, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the unvested Performance Units at any time, subject to the terms of the Plan.  If so accelerated, such Performance Units will be considered as having vested as of the date specified by the Administrator.

Notwithstanding anything in the Plan or this Award Agreement to the contrary, if the vesting of the balance, or some lesser portion of the balance, of the Performance Units is accelerated in connection with Participant’s termination as a Service Provider (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to death, and if (x) Participant is a “specified employee” within the meaning of Section 409A at the time of such termination as a Service Provider and (y) the payment of such accelerated Performance Units will result in the imposition of additional tax under Section 409A if paid to Participant on or within the six (6) month period following Participant’s termination as a Service Provider, then the payment of such accelerated Performance Units will not be made until the date six (6) months and one (1) day following the date of Participant’s termination as a Service Provider, unless the Participant dies following his or her termination as a Service Provider, in which case, the Performance Units will be paid in Units to the Participant’s estate as soon as practicable following his or her death.  It is the intent

of this Award Agreement to comply with the requirements of Section 409A so that none of the Performance Units provided under this Award Agreement or Units issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  For purposes of this Award Agreement, “Section 409A” means Section 409A of the Code, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

5.             Forfeiture upon Termination of Status as a Service Provider.  Notwithstanding any contrary provision of this Award Agreement, the balance of the Performance Units that have not vested as of the time of Participant’s termination as a Service Provider for any or no reason and Participant’s right to acquire any Units hereunder will immediately terminate.

6.             Death of Participant.  Any distribution or delivery to be made to Participant under this Award Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary survives Participant, the administrator or executor of Participant’s estate.  Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

7.             Withholding of Taxes.  Notwithstanding any contrary provision of this AwardAgreement, no certificate representing the Units will be issued to Participant, unless and until satisfactory arrangements (as determined by the Administrator) will have been made by Participant with respect to the payment of income, employment and other taxes which the Company determines must be withheld with respect to such Units.  The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit Participant to satisfy such tax withholding obligation, in whole or in part (without limitation) by (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Units having a Fair Market Value equal to the minimum amount required to be withheld, (c) delivering to the Company already vested and owned Units having a Fair Market Value equal to the amount required to be withheld, or (d) selling a sufficient number of such Units otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld.To the extent determined appropriate by the Company in its discretion, it shall have the right (but not the obligation) to satisfy any tax withholding obligations by reducing the number of Units otherwise deliverable to Participant.  If Participant fails to make satisfactory arrangements for the payment of any required tax withholding obligations hereunder at the time any applicable Performance Units otherwise are scheduled to vest pursuant to Sections 3 or 4, Participant will permanently forfeit such Performance Units and any right to receive Units thereunder and the Performance Units will be returned to the Company at no cost to the Company.

8.             Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Units deliverable hereunder unless and until certificates representing such Units will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant.  After such issuance, recordation and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Units and receipt of dividends and distributions on such Units.

9.             No Guarantee of Continued Service.  PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE PERFORMANCE UNITS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OF PERFORMANCE UNITS OR ACQUIRING UNITS HEREUNDER.  PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

10.Address for Notices.  Any notice to be given to the Company under the terms of this Award Agreement will be addressed to the Company at UTStarcom, Inc., 1275 Harbor Bay Parkway, Suite 100, Alameda, CA 94502, or at such other address as the Company may hereafter designate in writing.

11.           Grant is Not Transferable.  Except to the limited extent provided in Section 6, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

12.           Binding Agreement.  Subject to the limitation on the transferability of this grant contained herein, this AwardAgreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

13.           Additional Conditions to Issuance of Stock.  If at any time the Company will determine, in its discretion, that the listing, registration or qualification of the Units upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Units to Participant (or his or her estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company.  Where the Company determines that the delivery of the payment of any Units will violate federal securities laws or other applicable laws, the Company will defer delivery until the earliest date at which the Company reasonably anticipates that the delivery of Units will no longer cause such violation.  The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.

14.           Plan Governs.  This Award Agreement is subject to all terms and provisions of the Plan.  In the event of a conflict between one or more provisions of this Award Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.  Capitalized terms used and not defined in this Award Agreement will have the meaning set forth in the Plan.

15.           Administrator Authority.  The Administrator will have the power to interpret the Plan and this Award Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Performance Units have vested).  All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other interested persons.  No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this AwardAgreement.

16.           Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to Performance Units awarded under the Plan or future Performance Units that may be awarded under the Plan by electronic means or request Participant’s consent to participate in the Plan by electronic means.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17.           Captions.  Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.

18.           Agreement Severable.  In the event that any provision in this AwardAgreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

19.           Modifications to the Agreement.  This AwardAgreement constitutes the entire understanding of the parties on the subjects covered.  Participant expressly warrants that he or she is not accepting this AwardAgreement in reliance on any promises, representations, or inducements other than those contained herein.  Modifications to this Award Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company.  Notwithstanding anything to the contrary in the Plan or this AwardAgreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this Award of Performance Units.

20.           Amendment, Suspension or Termination of the Plan.  By accepting this Award, Participant expressly warrants that he or she has received an Award of Performance Units under the Plan, and has received, read and understood a description of the Plan.  Participant understands that the Plan is discretionary in nature and may be amended, suspended or terminated by the Company at any time.

21.           Governing Law.  This Award Agreement shall be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof.  For purposes of litigating any dispute that arises under this Award of Performance Units or this Award Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation shall be conducted in the courts of Alameda County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Award of Performance Units is made and/or to be performed.

APPENDIX B

PERFORMANCE MATRIX

[INSERT PERFORMANCE MATRIX]