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,
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