Exhibit 10.30
UTSTARCOM, INC.
AMENDED AND
RESTATED
EXECUTIVE INVOLUNTARY TERMINATION
SEVERANCE PAY PLAN
1.
Introduction.
The purpose of this
UTStarcom, Inc. Executive 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
“Director”
means a member of the
Company’s Board of Directors.
2.9
“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.
2.10
“Effective
Date” means
June 20, 2006.
2.11
“ERISA”
means the Employee Retirement Income
Security Act of 1974, as amended.
2.12
“Good
Reason” means
without the Covered Employee’s express written consent,
(a) a significant reduction of the Covered Employee’s
duties, position or responsibilities
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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; or (d) without the
Covered Employee’s express written consent, 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.
2.13
“Involuntary Termination” means a termination of
employment of a Covered Employee under the circumstances described
in Section 4.1.
2.14
“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).
2.15
“Plan” means the UTStarcom, Inc. Involuntary
Termination Severance Pay Plan, as set forth in this document, and
as hereafter amended from time to time.
2.16
“Severance Benefit” means the compensation and
other benefits the Covered Employee will be provided pursuant to
Section 4.
2.17
“Severance Date” means the date on which a
Covered Employee experiences an Involuntary Termination.
2.18
“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 4.3.
4.
Severance Benefit.
4.1
Involuntary Termination. If 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 4.3, the
Covered Employee shall receive the following Severance Benefit from
the Company:
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4.1.1
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.
4.1.2
Health Benefits. The Company shall pay to the Covered
Employee an amount equal to twelve (12) months of the premiums for
continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“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 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 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 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
Parachute
Payments. In the
event that the severance and other benefits provided for in this
Plan or otherwise payable or provided to the Covered Employee
(i) constitute “parachute payments” within the
meaning of Section 280G of the Code and (ii) but for this
Section 4.2, would be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then
the Employee’s severance benefits hereunder Section 4
shall be either
(a)
delivered in full, or
(b)
delivered as to such lesser extent which would result in no portion
of such severance benefits being subject to the Excise
Tax,
whichever of the foregoing
amounts, taking into account the applicable federal, state and
local income taxes and the Excise Tax, results in the receipt by
the Covered Employee on an after-tax basis of the greatest amount
of severance benefits, notwithstanding that all or some portion of
such severance benefits may be taxable under Section 4999 of
the Code. Unless the Company and the Covered Employee
otherwise agree in writing, any determination required under this
Section 4.2 shall be made in writing in good faith by the
accounting firm serving as the Company’s independent public
accountants immediately prior to the Change of Control (the
“Accountants”). In the event of a reduction in
benefits hereunder, the Covered Employee shall be given the choice
of which benefits to reduce. For purposes of making the
calculations required by
