Exhibit 10.1
UTSTARCOM, 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.
2.11
“Effective
Date” means
June 20, 2006.
2
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 11.3.
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 11.3.
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 11.3.
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 11.3.
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
ter
