UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

April 30, 2009

Dear Stockholder:

        You are cordially invited to attend the 20082009 annual meeting of stockholders of UTStarcom, Inc. (the "Company"), to be held at the offices of the Company, 1275 Harbor Bay Parkway, Alameda, California 94502, on Friday,Thursday, June 27, 200825, 2009 at 1 p.m., local time. Enclosed are a notice of annual meeting of stockholders, a proxy statement describing the business to be transacted at the meeting and a proxy card for use in voting at the meeting.

        At the annual meeting, you will be asked to vote on the important matters described in detail in the notice of annual meeting of stockholders and proxy statement accompanying this letter. You will also have an opportunity to ask questions and receive information about the Company's business.

        Included with the proxy statement is a copy of the Company's Annual Report to stockholders.Stockholders. We encourage you to read the Annual Report. It includes information on the Company's operations as well as the Company's audited financial statements.

        Please take this opportunity to participate in the affairs of the Company by voting on the business to come before this meeting.WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, YOU ARE URGED TO SUBMIT YOUR PROXY AND VOTING INSTRUCTIONS OVER THE INTERNET OR BY TELEPHONE, OR COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.

        We look forward to seeing you at the meeting.

UTSTARCOM, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held June 27, 200825, 2009

To our Stockholders:

        NOTICE IS HEREBY GIVEN that the annual meeting of stockholders (the "Annual Meeting") of UTStarcom, Inc. (the "Company"), will be held on Friday,Thursday, June 27, 200825, 2009 at 1 p.m., local time, at the offices of the Company, 1275 Harbor Bay Parkway, Alameda, California 94502, for the following purposes:

1.

To elect Larry D. HornerJeff Clarke and Allen LenzmeierHong Liang Lu as Class IIIII Directors to serve for a term expiring on the date on which the Company's annual meeting of stockholders is held in the year 2011;2012;



2.

To ratify and approve the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2008;2009; and



3.

To approve a stock option exchange program for employees (excluding executive officers and directors), pursuant to which eligible employees will be offered the opportunity to exchange their eligible options to purchase shares of common stock outstanding under the Company's existing equity incentive plans, for a smaller number of new options at a lower exercise price; and



4.

To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

        The foregoing items of business are more fully described in the proxy statement accompanying this notice. Only stockholders of record at the close of business on April 29, 20082009 are entitled to notice of, and to vote at, the Annual Meeting.

        All stockholders are cordially invited to attend the Annual Meeting in person. However, to assure your representation at the Annual Meeting, you are urged to submit your proxy and voting instructions over the Internet or by telephone, or complete, sign, date and return the enclosed proxy card as promptly as possible in the postage-paid envelope enclosed for that purpose. Any stockholder of record attending the Annual Meeting may vote in person even if he or she returned a proxy.

        Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 27, 2008:25, 2009: The Proxy Statement and Annual Report to Stockholders for the fiscal year ended December 31, 20072008 are available free of charge at [                                    ]. www.edocumentview.com/utsi.

Alameda, California
[                      ], 2008April 30, 2009

YOUR VOTE IS IMPORTANT

To assure your representation at the Annual Meeting, you are asked to submit your proxy and voting instructions over the Internet or by telephone, or complete, sign and date the enclosed proxy as promptly as possible and return it in the enclosed postage-paid envelope, which requires no postage if mailed in the United States.

UTSTARCOM, INC.

PROXY STATEMENT

INFORMATION ABOUT THE PROXY STATEMENT AND
VOTING AT THE ANNUAL MEETING

        The Board of Directors (the "Board" or "Board of Directors") of UTStarcom, Inc. (the "Company" or "UTStarcom") is providing this proxy statement (the "Proxy Statement") prepared in connection with the Company's annual meeting of stockholders, which will take place on Friday,Thursday, June 27, 200825, 2009 at 1 p.m., local time (the "Annual Meeting" or "20082009 Annual Meeting") at the offices of the Company, 1275 Harbor Bay Parkway, Alameda, California 94502. The Company's telephone number at that location is (510) 864-8800. As a stockholder, you are invited to attend the Annual Meeting and are asked to vote on the proposals described in this Proxy Statement.

        Only stockholders of record at the close of business on April 29, 20082009 (the "Record Date") are entitled to notice of, and to vote at, the Annual Meeting. As of the Record Date, [                                    ]127,916,953 shares of the Company's common stock, par value $0.00125 per share (the "Common Stock"), were issued and outstanding. No shares of the Company's preferred stock, par value $0.00125 per share, were issued and outstanding. The stock transfer books will not be closed between the Record Date and the date of the Annual Meeting.

        These proxy solicitation materials and the Company's Annual Report to stockholders for the year ended December 31, 20072008 were mailed on or about [                                    ], 2008May 15, 2009 to all stockholders entitled to vote at the Annual Meeting.

Q:

What is the purpose of the Annual Meeting?

A:

To vote on the following proposals:

•

To elect Larry D. HornerJeff Clarke and Allen LenzmeierHong Liang Lu as Class IIIII Directors to serve for a term expiring on the date on which the Company's annual meeting of stockholders is held in the year 2011;2012;

•

To ratify and approve the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2008;2009; and

•

To approve a stock option exchange program for employees (excluding executive officers and directors), pursuant to which eligible employees will be offered the opportunity to exchange their eligible options to purchase shares of common stock outstanding under the Company's existing equity incentive plans, for a smaller number of new options at a lower exercise price; and

•

To transact such other business as may properly come before the Annual Meeting or at any adjournment or postponement thereof.

Q:

What are the Board of Directors' recommendations?

A:

The Board recommends that you vote your shares:

•

"FOR" the election of Larry D. HornerJeff Clarke and Allen LenzmeierHong Liang Lu as Class IIIII directors; and

•

"FOR" the ratification and approval of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for the 20082009 fiscal year,

•

"FOR" the stock option exchange program for employees, as described above; andyear.

Each proxy also gives each of the proxy holders discretionary authority to vote your shares in accordance with his or her judgment with respect to all additional matters that might come before the Annual Meeting.

Q;

Who is entitled to vote at the Annual Meeting?

A:

Stockholders Entitled to Vote.    Stockholders who our records show owned shares of UTStarcom Common Stock as of the close of business on the Record Date (April 29, 2008)2009) may vote at the Annual Meeting.

Registered Stockholders.    If your shares are registered directly in your name with UTStarcom's transfer agent, you are considered, with respect to those shares, the stockholder of record, and these proxy materials are being provided to you directly by UTStarcom. As the stockholder of

record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card, or to vote in person at the Annual Meeting.

Street Name Stockholders.    If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in "street name." These proxy materials are being forwarded to you by your broker, bank or other nominee, who is considered, with respect to those shares, the record holder. As the beneficial owner, you have the right to direct your broker, bank or other nominee how to vote, and you are also invited to attend the Annual Meeting. However, since you are not the record holder, you may not vote these shares in person at the Annual Meeting unless you follow your broker, bank or other nominee's procedures for obtaining a legal proxy. Your broker, bank or other nominee has provided a voting instruction card for you to use.

Q:

How many votes do I have?

A:

On each proposal to be voted upon, you have one vote for each share of Common Stock of the Company you own as of the Record Date.

Q:

How may I obtain a separate set of proxy materials or Proxy Statement for 2008?2009?

A:

If you share an address with another stockholder, previously consented to receiving one copy of the Proxy Statement on a voter instruction card submitted for last year's annual meeting of stockholders and do not participate in electronic delivery of proxy materials, only one copy of this Proxy Statement is being delivered to you. A stockholder at a shared address who received a single copy of this Proxy Statement may request a separate copy either by calling the number provided below or by mailing a written request to the Company's principal executive offices at the address below:

Corporate Secretary
UTStarcom, Inc.
1275 Harbor Bay Parkway
Alameda, California 94502
510-864-8800

The Company will promptly mail a separate copy of this Proxy Statement upon such request, but any such request should be made as soon as possible to ensure timely delivery.

Stockholders who share an address and received multiple copies of this Proxy Statement may also request that a single copy of future proxy statements be delivered by filling out the applicable section of the voter instruction card for the Annual Meeting.

Q:

How can I vote my shares in person at the Annual Meeting?

A:

Shares held in your name as the stockholder of record may be voted by you in person at the Annual Meeting. Shares held beneficially in street name may be voted by you in person at the Annual Meeting only if you obtain a legal proxy from the broker, bank or other nominee that holds your shares giving you the right to vote the shares.Even if you plan to attend the Annual

Meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the meeting.

Q:

How can I vote my shares without attending the Annual Meeting?

A:

Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the Annual Meeting. If you are a stockholder of record, you may vote by submitting a proxy. If you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker, bank or other nominee. For directions on how to vote, please refer to the instructions below and those included on your proxy

card or, for shares held beneficially in street name, the voting instruction card provided by your broker, bank or other nominee.

By Internet:    Stockholders of record with Internet access may submit proxies by following the "Vote by Internet" instructions on their proxy cards until 1:00 a.m., Central Time, on June 27, 2008.25, 2009. Most stockholders who hold shares beneficially in street name may vote by accessing the web site specified on the voting instruction cards provided by their brokers, banks or other nominees. Please check the voting instruction card for Internet voting availability.

By Telephone:    Stockholders of record who live in the United States, Canada or Puerto Rico may submit proxies by following the "Vote by telephone" instructions on their proxy cards until 1:00 a.m., Central Time, on June 27, 2008.25, 2009. Most stockholders who hold shares beneficially in street name may vote by phone by calling the number specified on the voting instruction cards provided by their brokers, banks or other nominees. Please check the voting instruction card for telephone voting availability.

By Mail:    Stockholders of record may submit proxies by completing, signing and dating their proxy cards and mailing them in the accompanying pre-addressed envelopes. Proxy cards submitted by mail must be received by the time of the meeting in order for your shares to be voted. Stockholders who hold shares beneficially in street name may vote by mail by completing, signing and dating the voting instruction cards provided by their brokers, banks or other nominees and mailing them in the accompanying pre-addressed envelopes.

Q:

Can I change my vote?

A:

For shares that you hold of record, you may change your proxy at any time prior to the proxy being used at the Annual Meeting by (i) delivering to the Corporate Secretary of the Company at UTStarcom, Inc., 1275 Harbor Bay Parkway, Alameda, California 94502 a written notice of revocation or a duly executed proxy bearing a later date, or (ii) attending the Annual Meeting and voting in person. The mere presence at the Annual Meeting of a stockholder who has appointed a proxy will not revoke the prior appointment. If not revoked, the proxy will be voted at the Annual Meeting in accordance with the instructions indicated on the proxy card, or if no instructions are indicated, will be voted "FOR" the election of Larry D. HornerJeff Clarke and Allen LenzmeierHong Liang Lu as Class IIIII directors, "FOR" Proposal No. 2 (to ratify the appointment of PriceWaterhouseCoopers) and "FOR" Proposal No. 3 (to approve the stock option exchange program),PricewaterhouseCoopers LLP, and, as to any other matter that may properly be brought before the Annual Meeting, in accordance with the judgment of the proxy holders. For shares you hold beneficially in street name, you may change your vote by submitting new voting instructions to your broker, bank or other nominee following the instruction they provided, or, if you have obtained a legal proxy from your broker, bank or other nominee giving you the right to vote your shares, by attending the meeting and voting in person.

Q:

How many shares must be present or represented to conduct business at the Annual Meeting?

A:

The quorum requirement for holding the Annual Meeting and transacting business is that holders of a majority in voting power of the Common Stock of the Company issued and outstanding and

entitled to vote at the Annual Meeting, as of the Record Date, must be present in person or represented by proxy. Both abstentions and broker non-votes (described below) are counted for the purpose of determining the presence of a quorum.

Q:

What is the voting requirement to approve each of the proposals?

A:

In the election of directors, each director must be elected by a majority of the two nominees receivingvotes cast, meaning that the highest number of "FOR" votesshares entitled to vote on the election of directors and represented in person or by proxy at the Annual Meeting will be elected.casting their vote "FOR" a director must exceed the number of votes "AGAINST" a director. If a nominee for director fails to receive the required number of

votes for election, he or she is required to tender his or her resignation to the Board. In such a case, the Nominating and Corporate Governance Committee of the Board has the option of accepting or declining such resignation, considering any factors that the Committee deems relevant.

The proposalsproposal to (i) ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm and (ii) approve the stock option exchange program for employees described in this Proxy Statement, each requirerequires the affirmative "FOR" vote of a majority of the total number of shares present in person or represented by proxy and entitled to vote on the proposal at the Annual Meeting.

Q:

How are votes counted?

A:

In the election of directors, you may vote "FOR" the nominee"FOR," "AGAINST" or your vote may be "WITHHELD" with respect to the"ABSTAIN" on each nominee. Votes "WITHHELD"Abstention votes with respect to the election of directors will be counted for purposes of determining the presence or absence of a quorum at the Annual Meeting but will have no other legal effect upon election of directors. You may not cumulate your votes for the election of directors.

For the proposalsproposal to (i) ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm, and (ii) approve a stock option exchange program for employees described in this Proxy Statement, you may vote "FOR," "AGAINST" or "ABSTAIN."

If you elect to "ABSTAIN," the abstention has the same effect as a vote "AGAINST" such proposal.

If you provide specific instructions with regard to certain proposals, your shares will be voted as you instruct on such proposals.

Q:

What is the effect of broker non-votes?

A:

If you hold shares beneficially in street name and do not provide your broker, bank or other nominee with voting instructions, your shares may constitute "broker non-votes." Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and instructions are not given. At this Annual Meeting, only Proposal 3none of the proposals is subject to broker non-votes. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote or votes cast on that proposal. Thus, broker non-votes will not affect the outcome of any proposal being voted on at the Annual Meeting.

Q:

Who will serve as inspector of elections?

A:

The inspector of elections will be a representative from Computershare Trust Company, N.A, the Company's transfer agent.

Q:

Who will bear the cost of soliciting votes for the Annual Meeting?

A:

This solicitation is made by the Company, and all costs associated with soliciting proxies will be borne by the Company. We have retained The Altman Group to assist with the solicitation for an estimated fee of $9,500$5,000 plus reasonable out-of-pocket expenses. In addition, the Company will reimburse brokerage firms, banks and other persons representing beneficial owners of shares for their expenses in forwarding solicitation materials to such beneficial owners. Proxies may be solicited by certain of the Company's directors, officers and regular employees personally or by

telephone, facsimile or electronic mail. No additional compensation will be paid to these persons for such services.

Q:

What is the deadline for submission of stockholder proposals for consideration at the 20092010 annual meeting of stockholders?

A:

Stockholder Proposals Other Than Nomination of Directors.

Under Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a stockholder proposal to be considered for inclusion in the proxy statement for the 20092010 annual stockholders meeting (the "20092010 Annual Meeting"), the Secretary of the Company would have to receive the written proposal by a stockholder at the Company's principal executive offices no later than , 2009.January 15, 2010. Such proposals also must comply with the other provisions of Rule 14a-8 and additional applicable Securities and Exchange Commission ("SEC") rules regarding the inclusion of stockholder proposals in company-sponsored proxy materials. Notice of such proposals should be addressed to:

Corporate Secretary
UTStarcom, Inc.
1275 Harbor Bay Parkway
Alameda, California 94502

If, however, the date of our 20092010 annual meeting is more than 30 days before or after the anniversary of the 20082009 Annual Meeting, then for a stockholder proposal under Rule 14a-8 to be considered for inclusion in the proxy statement for the 20092010 Annual Meeting, the Secretary of the Company must receive the written proposal by such stockholder at the Company's principal executive offices within a reasonable time before the Company begins to print and mail its proxy materials for the 20092010 Annual Meeting.

For a stockholder proposal that is not intended to be included in the Company's proxy statement under Rule 14a-8, the stockholder must, (i) provide the information required by the Bylaws of the Company and (ii) give timely notice to the Corporate Secretary in accordance with the Bylaws, which generally require that the notice be received by the Corporate Secretary of the Company prior to , 2009.April 1, 2010.

However, if the date of the 20092010 Annual Meeting (the "20092010 Annual Meeting Date") is more than 30 days before or after the anniversary of the 20082009 Annual Meeting, then the Board shall determine an appropriate date by which notice of a stockholder proposal that is not intended to be included in the Company's proxy statement must be received by the Company (the "Notice Deadline"). The Company will publicize the Notice Deadline at least ten (10) days prior to the Notice Deadline by either a filing pursuant to the Securities Exchange Act of 1934, as amended; or by a press release.

Nomination of Director Candidates:    The Company's Bylaws permit stockholders to nominate directors for election at an annual stockholder meeting. To nominate a director, a stockholder must provide the information required by the Bylaws. To nominate directors for election at the 20092010 Annual Meeting, the stockholder making such nomination must give timely notice to the Corporate Secretary in accordance with the Bylaws, which must be received by the Corporate Secretary not less than one hundred twenty (120) days prior to the date of the 20092010 Annual Meeting.

However, in the event the Company fails to publicize the 20092010 Annual Meeting Date at least one hundred thirty (130) days prior to the 20092010 Annual Meeting, notice by a stockholder must be received by the Corporate Secretary within ten (10) days of:

•

the first public disclosure of the 20092010 Annual Meeting Date by the Company, or

•

the date the notice of the 20092010 Annual Meeting Date is mailed to the Company's stockholders.

As noted above, weWe currently expect our 20092010 Annual Meeting will be held on or around , 2009.June 24, 2010. As such, a stockholder must provide notice to the Corporate Secretary of a director nomination by , 2009.February 24, 2010.

Copy of Company Bylaws:    Copies of the provisions of the Bylaws governing the form and delivery requirements of stockholder nominations or proposals may be obtained by sending an email request to the Company's investor relations department at investorrelations@utstar.com. A copy of the entire Bylaws is available via the link entitled "Corporate Governance" on the Company's website athttp://investorrelations.utstar.com/governance.governance.cfm.

Q:

What if I have questions about lost stock certificates or need to change my mailing address?

A:

You may contact our transfer agent, Computershare, by telephone at 781-575-2879 or by facsimile at 781-575-3266 or emailgoing to the Computershare website at www.computershare.com/investor and clicking the Contact Us tab at the top of the page if you have lost your stock certificate or need to change your mailing address.

FORWARD-LOOKING STATEMENTS

        This Proxy Statement contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on our current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding actions to be taken by us. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those mentioned in the section on forward-looking statements and in the risk factors in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007,2008, and in our periodic reports on Form 10-Q and current reports on Form 8-K.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

General

        The authorized number of directors of the Company is currently set at seven.six. The Company's Bylaws provide that the Board of Directors may set the number of directors at a minimum of six and a maximum of eight members. The Company's Certificate of Incorporation provides that directors shall be divided into three classes, with the classes serving for staggered, three-year terms (or less if they are filling a vacancy). Currently the Board is comprised of two Class I directors, two Class II directors and threetwo Class III directors. The Company's Class I Directors, Thomas J. Toy and Bruce J. Ryan, will hold office until the 2010 annual meetingAnnual Meeting or until the Class I Director's successor has been duly elected and qualified, and each of the threetwo Class IIIII Directors, Francis P. Barton, Jeff ClarkePeter Blackmore and Hong Liang Lu,Allen Lenzmeier, will hold office until the 20092011 annual meeting or until the Class IIIII Director's successor has been duly elected and qualified.

Nominees

        The Company's nominees for election as the Class IIIII Directors at this Annual Meeting are the current Class IIIII Directors, Larry D. HornerJeff Clarke and Allen Lenzmeier.Hong Liang Lu. The Nominating and Corporate Governance Committee has recommended, and the Board of Directors has approved, the nomination of these nominees.

Nominees

        The Board had anticipated that Mr. Horner, the Chairman of our Audit Committee, would retire from the Board of Directors after eight years of service but the Board has asked him to stand for re-election and remain on the Board to assist the Audit Committee during its leadership transition. The Board believes it is important that Mr. Horner be re-elected at this time in order to assure an effective transition of Audit Committee leadership.

        Unless otherwise instructed, the proxy holders will vote the proxies received by them for the Company's nominees for the Class IIIII Directors, Larry D. HornerJeff Clarke and Allen Lenzmeier,Hong Liang Lu, who will hold office until the 20112012 annual meeting or until their successors have been duly elected and qualified. The Company expects that the nominees for election as Class IIIII Directors at the Annual Meeting will be able to serve if elected.

        In the event that either nominee of the Company becomes unable or declines to serve as a director at the time of the Annual Meeting, the proxy holders will vote the proxies for any substitute nominee who is designated by the current Board to fill the vacancy.

Biographical Information for Director Nominees

Larry D. Horner has served as a director since January 2000. Mr. Horner currently serves on the board of directors of Atlantis Plastics, Inc., Clinical Data Inc., TOUSA, Inc. and several private companies. From 1994 until 2001, Mr. Horner served as Chairman of Pacific USA Holdings Corp., and from 1997 to 2001 he served as Chairman and Chief Executive Officer of Asia Pacific Wire & Cable Corporation Limited. Mr. Horner formerly served as Chairman and Chief Executive Officer of KPMG from 1984 to 1990. Mr. Horner, a Certified Public Accountant, holds a B.S. from the University of Kansas and is a graduate of the Stanford Executive Program.

Allen Lenzmeier has served as a director since March 2005. Mr. Lenzmeier has served as the Vice Chairman of Best Buy Co. Inc. since December 2004. From 2002 to 2004, Mr. Lenzmeier served as the President and Chief Operating Officer of Best Buy Co. Inc. Mr. Lenzmeier served as the President of Best Buy Retail from 2001 to 2002. From 1991 to 2001 Mr. Lenzmeier served as the Executive Vice President and Chief Financial Officer of Best Buy Co. Inc. and began his employment with the company in 1984. Mr. Lenzmeier serves on the board of directors of several private companies. Mr. Lenzmeier holds a B.S. from Minnesota State University Mankato.

Required Vote

        The two nominees receivingEach director must be elected by a majority of the highestvotes cast, meaning that the number of shares entitled to vote on the election of directors and represented in person or by proxy at the Annual Meeting casting their vote "FOR" a director must exceed the number of votes "AGAINST" a director. Abstention votes with respect to the election of the shares entitled to be voted for such nominees shall be elected as Class II Directors. Votes withheld from any nomineedirectors will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting but will have no other legal effect upon election of directors underdirectors. You may not cumulate your votes for the Delaware General Corporation Law.election of directors. If a nominee for director fails to receive the required number of votes for election, he or she is required to tender his or her resignation to the Board. In such a case, the Nominating and Corporate Governance Committee of the Board has the option of accepting or declining such resignation, considering any factors that the Committee deems relevant.

THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING
"FOR" THE NOMINEES SET FORTH HEREIN.

INFORMATION ABOUT OUR BOARD OF DIRECTORS

Our Directors and Nominees

        The names of the current Class I and Class IIIII directors with unexpired terms and the Class IIIII nominees, their ages as of April 30, 20082009 and certain other information are set forth below:

*

Mr. Ryan was appointed to the Board of Directors on April 10, 2008.

        Except as set forth below, each nominee or incumbent director has been engaged in his principal occupation described below during the past five years. There are no family relationships between any of our directors or executive officers.

        Francis P. BartonPeter Blackmore has served as our Chief Executive ViceOfficer and President and Chief Financial Officer since August 2005 and as a director since October 2006.July 2008, and served as our President and Chief Operating Officer from July 2007 to June 2008. From May 2003 to July 2005 until he joined the Company, Mr. Barton wasBlackmore served as Executive Vice President in charge of worldwide sales, marketing and Chief Financial Officer of Atmeltechnology at Unisys Corporation. From May 2001Prior to May 2003, Mr. Barton wasjoining Unisys in 2005, he served as Executive Vice President of the Customer Solutions Group at Hewlett-Packard Company from 2004 and Chief Financial Officer of BroadVision Inc. From 1998 to 2001, Mr. Barton was Senioras Executive Vice President and Chief Financial Officer of Advanced Micro Devices, Inc.the Enterprise Systems Group from 2002 through 2004. From 1996 to 1998,1991 until its acquisition by Hewlett-Packard in 2002, Mr. Barton wasBlackmore served in a number of senior management positions with Compaq Computer Corporation, most recently as its Executive Vice President of worldwide sales and Chief Financial Officerservices from 2000 through 2002. Mr. Blackmore serves on the board of Amdahl Corporation. From 1974 to 1996, Mr. Barton worked at Digital Equipment Corporation, beginning his career as a financial analyst and moving his way up through various financial roles to Vice President and Chief Financial Officer of Digital Equipment Corporation's Personal Computer Division. Mr. Barton currently serves as a director of ON Semiconductor Corporation.MEMC Electronic Materials Inc. He holds a B.S.an M.A. in Chemical EngineeringEconomics from Worcester Polytechnic Institute and an M.B.A. with a focus in finance from Northeastern University.Trinity College, Cambridge, U.K.

        Jeff Clarke has served as a director since January 2005. Since May 2006, Mr. Clarke has served as Chief Executive Officer and President and a director of Travelport Incorporated, a private company. From April 2004 to April 2006, Mr. Clarke served as the Chief Operating Officer of CA, Inc., a global provider of management software. From 2002 to 2004, Mr. Clarke was Executive Vice President of Global Operations of Hewlett-Packard Company, and prior to that he was the Chief Financial Officer of Compaq Computer Corporation. Mr. Clarke serves as Chairman of the Board of Orbitz Worldwide, Inc. and as a director of Orbitz Worldwide,Red Hat, Inc. He holds a B.A. in Economics from the State University of New York at Geneseo and an M.B.A. from Northeastern University.

Larry D. Horner has served as a director since January 2000. Mr. Horner currently serves on the board of directors of Atlantis Plastics, Inc., Clinical Data Inc., TOUSA, Inc. and several private

companies. From 1994 until 2001, Mr. Horner served as Chairman of Pacific USA Holdings Corp., and from 1997 to 2001 he served as Chairman and Chief Executive Officer of Asia Pacific Wire & Cable Corporation Limited. Mr. Horner formerly served as Chairman and Chief Executive Officer of KPMG from 1984 to 1990. Mr. Horner, a Certified Public Accountant, holds a B.S. from the University of Kansas and is a graduate of the Stanford Executive Program.

        Allen Lenzmeier has served as a director since March 2005. Mr. Lenzmeier has served as the Vice Chairman of Best Buy Co. Inc. since December 2004. From 2002 to 2004, Mr. Lenzmeier served as the President and Chief Operating Officer of Best Buy Co. Inc. Mr. Lenzmeier served as the President of Best Buy Retail from 2001 to 2002. From 1991 to 2001 Mr. Lenzmeier served as the Executive Vice President and Chief Financial Officer of Best Buy Co. Inc. and began his employment with the company in 1984. Mr. Lenzmeier serves on the board of directors of several private companies. Mr. Lenzmeier holds a B.S. from Minnesota State University Mankato.

        Hong Liang Lu became our Chairman in July 2008, and has served as oura director since June 1991. Mr. Lu served as President and Chief Executive Officer and as a director from June 1991 through December 2006,to July 2007 and as Chief Executive Officer from July 2007 to July 2008. Mr. Lu also served as our Chairman of the Board from March 2003 to December 2006. On January 1, 2007, he assumed the title of Chief Executive Officer. In June 1991, Mr. Lu co-founded UTStarcom, Inc. under its prior name, Unitech Telecom, Inc., which subsequently acquired StarCom Network Systems, Inc. in September 1995. From 1986 through December 1990, Mr. Lu served as President and Chief Executive Officer of Kyocera Unison, a majority-owned subsidiary of Kyocera International, Inc. Mr. Lu served as President and Chief Executive Officer of Unison World, Inc., a software development company from 1983 until its merger with Kyocera in 1986. From 1979 to 1983, Mr. Lu served as Vice President and Chief Operating Officer of Unison World, Inc. Mr. Lu holds a B.S. in Civil Engineering from the University of California at Berkeley.

        Bruce J. Ryan has served as a director since April 2008. Mr. Ryan is currently a private consultant. From February 1998 to November 2002, he served as Executive Vice President and Chief Financial Officer of Global Knowledge Network, a provider of information technology and computer software training programs and certifications. From 1994 to 1997, he1998, Mr. Ryan served as the Executive Vice President and Chief Financial Officer of Amdahl Corporation, a provider of information technology solutions. Mr. Ryan previously had a 25-year career at Digital Equipment Corporation, where he served in various executive positions, including Senior Vice President of the financial services, government and professional services business group. Mr. Ryan also serves as a director of KVH Industries, Inc., IONA Technologies PLC and severaltwo private companies. HeMr. Ryan holds a B.S. in business administration from Boston College and an M.B.A. from Suffolk University.

        Thomas J. Toy has served as a director since February 1995 and asbecame our Lead Director in July 2008. He was our Chairman of the Board sincefrom January 2007.2007 to July 2008. Since March 1999, Mr. Toy has served as Managing Director of PacRim Venture Partners, a professional venture capital firm specializing in investments in the information technology sector. Since 2005, Mr. Toy has served as a partner of SmartForest Ventures, a professional venture firm specializing in the information technology sector. From 1987 until 1992, Mr. Toy was employed as a Vice President at Technology Funding and was a partner there from 1992 until 1999. Mr. Toy also serves as a director of White Electronic Designs Corporation, Solarfun Power Holdings and several private companies. Mr. Toy holds B.A. and M.M. degrees from Northwestern University.

The Company's Director Nomination Process

        The Board's process for identifying and evaluating nominees for director consists mainly of evaluating candidates who are recommended by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee identifies and recommends nominees for election or reelection to the Board, or for appointment to fill any vacancy that is anticipated or has arisen on the Board, in accordance with the criteria, policies and principles set forth in the Nominating and Corporate Governance Committee Charter and the Company's Corporate Governance Principles, as set forth below, or otherwise approved by the

Board. In evaluating candidates to determine if they are qualified to become members of our board of directors, the Nominating and Corporate Governance Committee looks for the following attributes, among others: the candidate's judgment, skill, diversity and experience with other organizations of comparable purpose, complexity and size; the interplay of the candidate's experience with the experience of other Board members; the extent to which the candidate would be a desirable addition to the Board; whether or not the candidate has any relationships that might impair his or her independence; and the candidate's experience, perspective, skills and knowledge of our industry. In addition, qualities sought in directors include high ethical standards, sound integrity, an inquisitive nature, a strong commitment to make decisions and take actions guarding the long term interests of shareholders, seasoned judgment, a record of outstanding skills and accomplishments in their personal careers, and the ability and desire to communicate and participate actively in board and committee sessions. Although the

Nominating and Corporate Governance Committee uses these and other criteria to evaluate potential nominees, there are no stated minimum criteria for nominees.

        The Board may also, on a periodic basis, solicit ideas for possible candidates from a number of sources, including current members of the Board, senior Company executives, individuals personally known to members of the Board, stockholders and one or more third-party search firms.

        The Nominating and Corporate Governance Committee's policy is that stockholder nominations of director candidates will be given the same consideration and evaluated with the same criteria as any other candidate. For more information on stockholder nominations of director candidates, please see the section entitled "Nomination of Director Candidates" under "Deadlines for Submission of Stockholder Proposals for 20092010 Annual Meeting" in this Proxy Statement. The form and delivery requirements of such stockholder nominations must comply with the relevant provisions of the Company's Bylaws, a copy of which may be obtained by sending an email to the Company's investor relations department at investorrelations@utstar.com. A complete copy of the Bylaws is also available on the Company's website in the "Corporate Governance" section.

Stockholder Communications with the Board of Directors

        The Board of Directors has established a process for stockholders to communicate with members of the Board. All concerns, questions or complaints regarding the Company's compliance with any policy or law, or any other Board-related communication, should be directed to the Board via the link entitled "Email Board of Directors" athttp://investorrelations.utstar.com/governancegovernance.cfm.. All substantive and appropriate communications received from stockholders will be received and reviewed by one or more independent directors, or officers acting under their direction, who will forward such communications to the Board or particular Board committees, as appropriate.

Board Attendance, Director Independence and Financial Sophistication

        The Board held a total of 1816 meetings during the fiscal year ended December 31, 2007.2008. During fiscal year 2007,2008, each of the directors (other than former director Ying Wu who resigned from the Board on July 24, 2007) attended 75% or more of the aggregate number of meetings of the Board and the committees of the Board on which the director served subsequent to becoming a director or a member of such committee. The Board's policy is to encourage directors to attend the Annual Meeting. ThreeFour directors attended the 20072008 annual meeting of stockholders.

        Of the Company's incumbent directors standing for reelection and those with continuing terms, Messrs. Clarke, Horner, Lenzmeier, Ryan and Toy have been determined by the Board to be independent as set forth in Rule 4200(a)(15) of the NASDAQ Marketplace Rules, the listing standards of NASDAQ Stock Market, as currently in effect. In addition, the Board has also determined that Messrs. Clarke, Horner, Lenzmeier and Ryan possess the attributes to be considered financially sophisticated for purposes of applicable NASDAQ Marketplace Rules and each has the background to be considered an "audit committee financial expert" as defined by the rules and regulations of the SEC and required by the NASDAQ Marketplace Rules.

        The Board has not established categorical standards or guidelines to make director independence determinations, but considers all relevant facts and circumstances. The Board based its determinations

primarily on a review of the responses of the directors to questions regarding employment and compensation history, affiliations, family and other relationships, and on discussions with our directors.

        In making its independence determinations, the Board considered transactions between the Company and entities associated with the directors or members of their immediate family. All identified transactions that appear to relate to the Company and a person or entity with a known connection to a director are presented to the Board for consideration. In making its determination that each non-employee director is independent, the Board considered the transactions in the context of the NASDAQ standards, the standards established by the SEC for members of audit committees, and the

SEC and Internal Revenue Service standards for compensation committee members. The Board's independence determinations included a review of the status of certain executive officers as limited partners of an investment fund managed by Mr. Toy. In each case, the Board determined that, because of the nature of each of these relationships and/or amounts involved, the relationships did not impair Mr. Toy's independence.

Board Committees and Related Functions

        The principal standing committees of the Board are the Audit Committee, the Nominating and Corporate Governance Committee, and the Compensation Committee eachand the Corporate Technology Strategy Committee. Each of whichcommittees, other than the Corporate Technology Strategy Committee, consists solely of non-employee, independent directors. From time to time, the Board may form a special committee or subcommittee of a standing committee to focus on specific matters.

Audit Committee

        The Audit Committee of the Board is a separately-designated, standing committee of the Board of Directors and currently consists of fivethree members of the Board of Directors, all of whom: (1) meet the criteria for "independence" set forth in rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended, and the listing standards of the NASDAQ Stock Market; (2) have not participated in the preparation of the financial statements of the Company or any of its current subsidiaries at any time during the past three years; and (3) are able to read and understand fundamental financial statements, including a company's balance sheet, income statement and cash flow statement. The members of the Audit Committee are Mr. Horner,Ryan, who chairs the committee, and Messrs. Clarke, Lenzmeier Ryan and Toy. Mr. Ryan was appointed as a member of the Committee effective April 25, 2008. The Audit Committee held 2219 meetings during the 2007 fiscal year.2008. Messrs. Clarke, Horner, Lenzmeier and Ryan have been determined by the Board to qualify as "audit committee financial experts" under applicable SEC and NASDAQ rules.

        The Audit Committee, among other duties and responsibilities, (i) reviews and approves the annual appointment of the Company's independent registered public accounting firm;firm, (ii) discusses and reviews in advance the scope and fees of the annual audit;audit, (iii) reviews the results of the audit with the independent registered public accounting firm and discusses the foregoing with the Company's management;management, (iv) reviews and approves non-audit services of the independent registered public accounting firm;firm, (v) reviews compliance with the Company's existing major accounting and financial reporting policies;policies, (vi) reviews and approves all related-party transactions that would require disclosure pursuant to the rules of the SEC and the policies and procedures related to such transactions;transactions, and (vii) provides oversight and monitoring of the Company's management and their activities with respect to the Company's financial reporting process. In connection with the execution of the responsibilities of the Audit Committee, including the review of the Company's quarterly earnings reports prior to public release, Audit Committee members communicated throughout 20072008 with the Company's management and the independent registered public accounting firm.

        The Board has approved an Audit Committee Charter which is reviewed at least annually, periodically revised (most recently on July 26, 2007), and is available on the Company's website athttp://investorrelations.utstar.com/governancegovernance.cfm..

Nominating and Corporate Governance Committee

        The Nominating and Corporate Governance Committee currently consists of fourthree members of the Board of Directors, all of whom are "independent" in accordance with the rules of the NASDAQ Stock Market. The current members of the Committee are Mr. Clarke, who chairs the committee, and Messrs. Horner, LenzmeierRyan and Toy. Mr. Ryan was appointed as a member of the Committee effective February 18, 2009. The Nominating and Corporate Governance Committee held 9 meetings during the 2007 fiscal year.2008.

        The Nominating and Corporate Governance Committee's responsibilities include the selection of director nominees for the Board and the development and annual review of the Company's governance principles. The Nominating and Corporate Governance Committee also (i) assists the Board by actively identifying individuals qualified to become Board members;members, (ii) recommends director nominees to the Board for election at the next annual meeting of stockholders;stockholders, (iii) recommends chairs and members of each committee to the Board, (iv) monitors significant developments in the law and practice of corporate governance and of the duties and responsibilities of directors of public companies; (iv)companies, (v) leads the Board in its annual performance self-evaluation, including establishing criteria to be used in connection with such evaluation; (v)evaluation, (vi) reviews Board compensation and recommends to the Board any changes in Board compensation, (vii) oversees compliance with the Company's Code of Business Conduct and Ethics;Ethics, and (vi)(viii) develops and recommends to the Board and administers the corporate governance guidelines of the Company, including appropriate stock ownership guidelines for officers and directors.Company.

        The Nominating and Corporate Governance Committee is also responsible for reviewing with the Board, from time to time, the appropriate skills and characteristics required of Board members in the context of the current composition of the Board. This assessment includes issues of diversity in numerous factors, including independence, operational experience as a senior executive, business judgment, age, understanding of the industry, willingness to mentor, personal network, and international perspective. Additional criteria include a candidate's personal and professional credibility, integrity and prestige, and his or her ability to blend with the Company's Board dynamics, as well as his or her willingness to devote sufficient time to attend meetings of the Board. The Nominating and Corporate Governance Committee reviews these factors and others deemed useful in the context of an assessment of the perceived needs of the Board at a particular point in time. As a result, the priorities and emphasis of the Nominating and Corporate Governance Committee and of the Board may change from time to time to take into account changes in business and other trends, in addition to the portfolio of skills and experience of current and prospective directors.

        The Board has adopted a charter of the Nominating and Corporate Governance Committee, addressing the nominations process and such related matters as may be required under federal securities laws and NASDAQ Marketplace Rule 4350(c)(4)(B). A copy of the Nominating and Corporate Governance Committee Charter, which is reviewed at least annually and is periodically revised (most recently on April 10, 2008)February 18, 2009), is available on the Company's website athttp://investorrelations.utstar.com/governancegovernance.cfm..

Compensation Committee

        The Compensation Committee currently consists of fourthree members of the Board of Directors, Mr. Lenzmeier, who chairs the committee, and Messrs. Clarke Horner and Toy, all of whom are non-employee, outside directors in addition to being "independent directors" as defined under the rules of the NASDAQ Stock Market. The Compensation Committee met 1220 times during fiscal year 2007 and acted twice by written consent. Messrs. Horner, Lenzmeier and Toy served on the Committee

throughout fiscal year 2007. Mr. Toy served as Chairman until April 27, 2007 when Mr. Lenzmeier succeeded him as Chairman. Mr. Clarke was appointed a member of the Committee on April 27, 2007.2008.

        The purpose of the Compensation Committee is to (i) approve and oversee the total compensation package for the Company's executives, including their base salaries, incentives, deferred compensation, equity-based compensation, benefits and perquisites;perquisites, (ii) review and approve corporate goals and objectives relevant to the compensation of the Company's Chief Executive Officer (the "CEO"), evaluate CEO performance, and determine CEO compensation based on this evaluation;evaluation, (iii) review the CEO's performance evaluation of all executive officers and approve pay decisions;decisions, and (iv) review periodically and make recommendations to the Board regarding any equity or long-term compensation plans, and administer these plans.

        The Compensation Committee operates according to a charter that details its specific duties and responsibilities. The charter is reviewed at least annually, periodically revised (most recently on October 25, 2007)December 16, 2008) by the Compensation Committee, and is available on the Company's website athttp://investorrelations.utstar.com/governancegovernance.cfm. The charter generally provides the membership

requirements, authority and duties of the Compensation Committee. The Compensation Committee is to consist of no fewer than three members, all of whom (i) meet the independence requirements of the NASDAQ Marketplace Rules, (ii) are "non-employee directors" under the definition of Rule 16b-3 promulgated under Section 16 of the Exchange Act, and (iii) are "outside directors" for purposes of the regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"). During the fiscal year ended December 31, 2007,2008, all members of the Compensation Committee met these criteria.

        UTStarcom's Human Resources department supports the Compensation Committee in its work. The Compensation Committee also has the authority to engage the services of outside advisers,advisors, experts and others for assistance. From time to time, the Compensation Committee may direct an external advisor to work with the Human Resources department to support management and the Compensation Committee in matters such as (i) peer group development, (ii) executive officer benchmarking, including pay-for-performance analyses and tally sheet preparation, and (iii) advising on pay levels and/or pay program design. In May 2007, the Compensation Committee retained Compensia, Inc. as its independent outside compensation consultant. For a further description of the role of the compensation consultant in our compensation process, please see the section entitled "Engagement of and Role of Independent Compensation Consultant" in the Compensation Discussion and Analysis contained in this Proxy Statement.

SpecialCorporate Technology Strategy Committee

        In May 2006,February 2009, the Board of Directors formed a special committee (the "Special Committee")Corporate Technology Strategy Committee to consider strategic alternatives availablereview the scope, direction, quality, investment level and execution of the Company's corporate technology strategies and make recommendations to the Company.Board. Mr. Toy was designated the Chairman of the Special Committee and Messrs. Clarke, HornerBlackmore and LenzmeierLu were appointed as members. The Specialcharter for the Committee completed its work in May 2007.was approved by the Board and is available on the Company's website athttp://investorrelations.utstar.com/governance.cfm.

Compensation Committee Interlocks and Insider Participation

        The Compensation Committee consisted of Messrs. Clarke, Horner, Lenzmeier and Toy during the 2007 fiscal year. All members of the Compensation Committee during 20072008 were independent directors in accordance with the applicable independence requirements of the NASDAQ Marketplace Rules, and none were employees or officers or former employees of the Company. During 2007,2008, no executive officer of the Company served on the compensation committee (or equivalent) or board of directors of another entity whose executive officer(s) served on the Company's Compensation Committee or Board.

Director Compensation for Fiscal Year 20072008

        Directors who are our employees receive no additional compensation for serving on the Board of Directors. In fiscal year 2007,2008, our non-employee directors received both cash and equity compensation as described below. In addition, we reimburse all directors for travel and other related expenses incurred in connection with our business, including attending stockholder meetings and meetings of the Board or any Board committee.

        The following table sets forth information concerning compensation paid or accrued for services rendered to us in all capacities by our non-employee directors (other than Mr. Ryan who was appointed to the Board in April 2008) for the fiscal year ended December 31, 2007.2008.

(1)*

Amounts include the following payments in connection with the activities of the Special Committee during 2007: $147,000 to Mr. Toy as Chairman; $58,000 to Mr. Clarke as a member; $58,000 to Mr. Horner as a member; and $55,000 to Mr. Lenzmeier as a member. The Special Committee completed its work in May 2007.retired from our Board on March 3, 2009.

(2)**

Mr. Ryan was appointed to our Board on April 25, 2008.

(1)

Amounts shown in the "Stock Awards" column do not reflect compensation actually received by the directors. Instead, the amounts shown are the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 20072008 in accordance with Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123(R)"), including amounts for stock awards granted in 2006during and 2007.prior to 2008. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. None of the non-employee directors received stock awards prior to 2006. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 142 to our 20072008 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.2008.

(3)(2)

Amounts shown in the "Options Awards" column do not reflect compensation actually received by the directors. Instead, the amounts shown are the dollar amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 20072008 in accordance with SFAS 123(R), including amounts for options granted during and prior to 2007.2008. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 142 to our 20072008 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.2008.

(4)(3)

ReflectsIncludes the compensation costs recognized by us in fiscal 20072008 for prior year's and current year's24,852 shares of restricted stock grants. Theapproved for grant under the 2006 Equity Incentive Plan ("2006 Plan") on September 30, 2008, with a grant date fair value of the 21,552 shares of restricted stock awarded to Mr. Clarke in 2007 was $62,501.$83,751. As of December 31, 2007,2008, Mr. Clarke had 19,75618,639 shares of unvested restricted stock outstanding.

(5)(4)

ReflectsIncludes the compensation costs recognized by us in fiscal 20072008 for prior years' and current yeara stock option grants. The grant datewith the following fair value as of the applicable grant date: $67,278 for a stock optionsoption to purchase 43,103 shares of Common Stock granted under the 2006 Equity Incentive Plan ("2006 Plan") in 2007 was $65,792. As of December 31, 2007, Mr. Clarke had 168,423 vested and unvested options outstanding.

(6)

Reflects the compensation costs recognized by us in fiscal 2007 for prior year's and current year restricted stock grants. The grant date fair value of the 24,310 shares of restricted stock awarded to Mr. Horner in 2007 was $70,499. As of December 31, 2007, Mr. Horner had 22,284 shares of unvested restricted stock outstanding.

(7)

Reflects the compensation costs recognized by us in fiscal 2007 for prior years' and current year stock option grants. The grant date fair value of stock options to purchase 48,62149,703 shares of Common Stock granted under the 2006 Plan in 2007 was $74,215.on September 30, 2008. As of December 31, 2007,2008, Mr. HornerClarke had 277,796 vested and unvested218,126 options outstanding.

(8)(5)

ReflectsIncludes the compensation costs recognized by us in fiscal 20072008 for prior year's and current year26,150 shares of restricted stock grants. Theapproved for grant under the 2006 Plan on September 30, 2008, with a grant date fair value of the 20,517 shares of restricted stock awarded to Mr. Lenzmeier in 2007 was $59,499.$88,126. As of December 31, 2007,2008, Mr. LenzmeierHorner had 18,80719,612 shares of unvested restricted stock outstanding.

(9)(6)

ReflectsIncludes the compensation costs recognized by us in fiscal 20072008 for prior years' and current yeara stock option grants. The grant datewith the following fair value as of the applicable grant date: $70,793 for a stock optionsoption to purchase 41,03452,300 shares of Common Stock granted under the 2006 Plan in 2007 was $62,634.on September 30, 2008. As of December 31, 2007,2008, Mr. LenzmeierHorner had 166,709 vested and unvested330,096 options outstanding.

(10)(7)

ReflectsIncludes the compensation costs recognized by us in fiscal 20072008 for prior year's and current year24,481 shares of restricted stock grants. Theapproved for grant under the 2006 Plan on September 30, 2008, with a grant date fair value of the 22,759 shares of restricted stock awarded to Mr. Toy in 2007 was $66,001.$82,501. As of December 31, 2007,2008, Mr. ToyLenzmeier had 20,86218,361 shares of unvested restricted stock outstanding.

(11)(8)

ReflectsIncludes the compensation costs recognized by us in fiscal 20072008 for prior years' and current yeara stock option grants. The grant datewith the following fair value as of the applicable grant date: $66,274 for a stock optionsoption to purchase 45,51748,961 shares of Common Stock granted under the 2006 Plan in 2007 was $69,477.on September 30, 2008. As of December 31, 2007,2008, Mr. Lenzmeier had 215,670 options outstanding.

(9)

Includes the compensation costs recognized by us in fiscal 2008 for 12,692 shares of restricted stock approved for grant under the 2006 Plan on September 30, 2008, with a grant date fair value of $42,772. As of December 31, 2008, Mr. Ryan had 9,519 shares of unvested restricted stock outstanding.

(10)

Includes the compensation costs recognized by us in fiscal 2008 for a stock option grant with the following fair value as of the applicable grant date: $129,816 for a stock option to purchase 80,000 shares of Common Stock granted under the 2006 Plan on April 30, 2008 and $34,361 for a stock option to purchase 25,385 shares of Common Stock granted under the 2006 Plan on September 30, 2008. As of December 31, 2008, Mr. Ryan had 105,385 options outstanding.

(11)

Includes the compensation costs recognized by us in fiscal 2008 for 73,442 shares of restricted stock approved for grant under the 2006 Plan on September 30, 2008, with a grant date fair value of $247,500. As of December 31, 2008, Mr. Toy had 219,507 vested and55,081 shares of unvested restricted stock outstanding.

(12)

Includes the compensation costs recognized by us in fiscal 2008 for a stock option grant with the following fair value as of the applicable grant date: $198,822 for a stock option to purchase 146,884 shares of Common Stock granted under the 2006 Plan on September 30, 2008. As of December 31, 2008, Mr. Toy had 366,391 options outstanding.

(13)

Represents reimbursement costs for travel of spouse to China for one board meeting.

Cash Compensation

        Approximately one-third of the compensation paid to our non-employee directors is comprised of cash. During 2007,2008, the non-employee directors' cash compensation was comprised of the following elements:

(1)

Mr. Toy served as Non-Executive Chairman of the Board until July 2008. In July 2008, Hong Liang Lu was appointed Executive Chairman and Mr. Toy was appointed Lead Director. Hong Liang Lu is an executive employee of the company and his compensation is summarized below under "Executive Compensation."

(2)

The Board of Directors approved a reduction in the director retainer from $50,000 to $37,500 for a one year period beginning in the fourth quarter of 2008.

        For 2009, the chair of the Corporate Technology Strategy Committee will receive a fee of $7,500 and the non-employee members of the Committee will receive a fee of $3,500. No other changes have been made to cash compensation as set forth above for non-employee directors for fiscal year 2008.2009.

        In addition to the compensation set forth above, members of the Special Committee of the Board of Directors (see description above) were eligible to receive the following cash payments through May 2007 when the Special Committee concluded its work:

Equity Compensation

        Approximately two-thirds of the compensation paid to our non-employee directors is comprised of equity: one-third of the aggregate value in stock options, and one-third of the aggregate value in restricted stock. The number of options and shares of restricted stock granted to each non-employee director (other than Mr. Ryan who was appointed to the Board in April 2008) during fiscal year 20072008 is set forth below:

(1)

In connection with Mr. Ryan's appointment to the Board, he was granted an option to purchase 80,000 shares of Common Stock with a grant price of $3.25 per share (equal to the closing price of the Company's Common Stock on the NASDAQ Stock Market on April 30, 2008, the date of grant).

        Each stock option has an exercise price of $2.90$3.37 per share, equal to the closing price of the Company's Common Stock on the NASDAQ Stock Market on NovemberSeptember 30, 2007,2008, the date of grant. The options and restricted stock vest in equal, monthly installments over a 12-month period beginning on NovemberSeptember 30, 2007.2008. The grants were made pursuant to the Company's 2006 Equity Incentive Plan (the "2006 Plan") and are subject to the standard terms and conditions of the forms of restricted stock award and stock option agreements previously approved for use with the 2006 Plan and filed with the SEC.

        For further discussionEach newly-elected or appointed non-employee director is eligible to receive an option award under the 2006 Plan to purchase 80,000 shares of Common Stock which would vest in equal installments of 25% per year on each of the four anniversaries of the date of grant. Any such grant would be made in accordance with respect to the Company's policyEquity Award Grant Policy and procedures relating to equity award grants that apply to non-employee directorsProcedures more fully described in the Compensation Discussion and other service providers, please seeAnalysis under the section entitled "Compensation Discussion and Analysis—Other Considerations—Equity"Equity Grant Practices" contained in this Proxy Statement.

        For further discussion with respect to change of control arrangements applicable to outstanding equity awards, please see the section entitled "Change of Control Provisions in the Equity Compensation Plans" under "Potential Payments upon Termination and Change of Control" contained in this Proxy Statement.

        For further discussion with respect to modifications made to certain outstanding equity awards held by non-employee directors, please see the section entitled "Executive Compensation—Modifications to Outstanding Equity Awards" contained in this Proxy Statement.

Indemnification Agreements

        All of our directors other than Mr. Ryan are currently party to indemnification agreements with the Company. The form of indemnification agreement is filed as Exhibit 10.1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.2008.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information with respect to beneficial ownership of our Common Stock as of April 1, 2008 (except as otherwise indicated), by:2009 by (i) each person who is known to us to own beneficially more than 5% of our Common Stock;Stock, (ii) each director of UTStarcom;UTStarcom, (iii) each Named Executive Officer;Officer, and (iv) all of our current directors and executive officers as a group. Calculations are based on 125,099,129127,916,671 shares of Common Stock issued and outstanding as of April 1, 2008.2009.

*

Less than 1%.

**

Appointed to the Board of Directors effective April 25, 2008.

(1)

Unless otherwise indicated in footnotes below, the address for all beneficial owners is c/o UTStarcom, Inc., 1275 Harbor Bay Parkway, Alameda, California 94502.

(2)

Under the SEC's proxy rules, a person who directly or indirectly has or shares voting power or investment power with respect to a security is considered a beneficial owner of the security. Voting power is the power to vote or direct the voting of shares, and investment power is the power to dispose of or direct the disposition of shares. The information on beneficial ownership in the table and the footnotes is based upon our records and the most recent Schedule 13D or 13G filed by each such person and information supplied to us by such person. Unless otherwise indicated, each person has sole voting power and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares subject to options which are exercisable within 60 days after April 1, 20082009 are deemed to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person, but are not deemed to be outstanding and to be beneficially owned for the purpose of computing the percentage ownership of any other person.

(3)

Information based on Schedule 13G, Amendment No. 2, filed with the SEC on March 28, 2007 by SOFTBANK CORP., SOFTBANK America, Inc, and SOFTBANK Holdings, Inc. Includes 14,651,630 shares registered in the name of SOFTBANK America Inc., a Delaware corporation. SOFTBANK America Inc. is a wholly owned subsidiary of SOFTBANK Holdings Inc., a Delaware corporation. SOFTBANK Holdings Inc. is a wholly owned subsidiary of SOFTBANK CORP., a

Japanese corporation. SoftbankSOFTBANK America Inc. has sole power to vote or direct the voting of 14,651,630 shares and sole dispositive power over 14,651,630 shares. The business address for these entities is c/o SOFTBANK CORP., Tokyo Shiodome Blvd., 1-9-1, Higashi-shimbashi, Minato-ku, Tokyo 105-7303 Japan.

(4)

Information based on Schedule 13G filed with the SEC on February 14, 2008, by Brandes Investment Partners, L.P. Includes 8.094,233 shares beneficially and jointly owned by Brandes Investment Partners, L.P., Brandes Investment Partners, Inc., Brandes Worldwide Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and Jeffrey A. Busby. Each of Brandes Investment Partners, L.P., Brandes Investment Partners, Inc., Brandes Worldwide Holdings, L.P., Charles H. Brandes, Glenn R. Carlson and Jeffrey A. Busby has shared power to vote or direct the voting of 6,722,748 shares and shared dispositive power over 8,094,233 shares. The business address for Brandes Investment Partners, L.P. is 11988 El Camino Real, Suite 500, San Diego, CA 92130.

(5)

Information based on Schedule 13G filed with the SEC on February 5, 20082009 by Barclays Global Investors NA. Includes 7,552,3477,178,138 shares beneficially and jointly owned by Barclays Global Investors, N.A.NA., Barclays Global Fund Advisors, Barclays Global Investors, Ltd.,Ltd, Barclays Global Investors Japan Trust and Banking Company Limited, Barclays Global Investors Japan Ltd.,Canada Limited, Barclays Global Investors Australia Limited, and Barclays Global Investors (Deutschland) AG. Barclays Global Investors NANA. has the sole power to vote or direct the voting of 4,234,3763,785,990 shares and sole dispositive power over 5,927,2844,497,911 shares. Barclays Global Fund Advisors has sole power to vote or direct the voting of 1,622,7362,680,227 shares and sole dispositive power over 1,622,7362,680,227 shares. Barclays Global Investors, Ltd. has sole power to vote or direct the voting of 2,327 shares and sole dispositive power over 2,327 shares. Barclays Global Investors Japan Trust and Banking Company Limited,Ltd, Barclays Global Investors Japan Limited, Barclays Global Investors Canada Limited, Barclays Global Investors Australia Limited, and Barclays Global Investors (Deutschland) AG have no sole voting power or sole dispositive power. The business address for Barclays Global Investors N.A.NA. is 45 Fremont400 Howard Street, San Francisco, CA 94105.

(6)(5)

Includes 2,937,6223,052,332 shares owned directly, 229,000 shares owned by The Lu Family Limited Partnership, of which Mr. Lu is a general partner, 115,92791,275 shares registered in the name of Lu Charitable Remainder Trust, of which Mr. Lu is the trustee, 14,07338,725 shares registered in the name of the Lu Family Trust of which Mr. Lu is a trustee and of which Mr. Lu and his spouse are beneficiaries, 5,332 shares registered in the name of Mr. Lu's son, and 5,332 shares registered in the name of Mr. Lu's daughter. Mr. Lu may be deemed the beneficial owner of the shares held by his children. Also includes 1,476,096 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(7)(6)

Includes 1,178,848 shares owned directly and 367,000Represents shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(8)(7)

Includes 26,1231,029,511 shares owned directly and 279,689343,750 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(9)(8)

Includes 122,46826,123 shares owned directly and 26,0430 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(10)(9)

Ownership as of October 1, 2007. Includes 1,340,68757,584 shares owned directly plus an additional (i) 1,505,500 shares registered in the name of Wu Partners, a California limited partnership, of which Mr. Wu is general partner, (ii) 1,080,000 shares registered in the name of Stonybrook Investors L.P., (iii) 4,868 shares registered in the name of Wu Living Trust, (iv) 4,873 shares registered in the name of Ashley Wu Trust—1998 and (v) 4,873 shares registered in the name of Richard Wu Trust—1998. Ashley Wu and Richard Wu are Mr. Wu's children. Mr. Wu may be deemed the beneficial owner of the shares held by his children's trusts. Also includes 780,000201,558 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2009.

2008. Mr. Wu's employment as our Executive Vice President and Chairman and Chief Executive Officer of our subsidiary, UTStarcom China Co., Ltd., terminated on June 1, 2007 and Mr. Wu resigned from the Board of Directors on July 24, 2007. As of June 1, 2007, Mr. Wu was vested in options to purchase 780,000 shares of the Company's Common Stock, and those options are exercisable for twelve months from the date of his termination of employment.

(11)(10)

Includes 32,732123,648 shares owned directly and 126,8720 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(12)(11)

Includes 39,186106,374 shares owned directly and 1,775 shares owned by Mr. Horner's spouse. Also includes 253,486199,350 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(13)(12)

Includes 81,893147,566 shares owned directly and 126,19264,063 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(14)(13)

Includes 33,71112,692 shares owned directly and 196,74936,923 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(15)(14)

Includes 2,897,440107,153 shares owned directly and 317,430 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2008.2009.

(15)

Includes 2,704,274 shares issuable upon exercise of options that are exercisable currently or within 60 days of April 1, 2009.

EXECUTIVE OFFICERS

        Our current executive officers and their ages as of April 30, 20082009 are as follows:

        Hong Liang Lu became our Chairman in July 2008, and has served as oura director since June 1991. Mr. Lu served as President and Chief Executive Officer and as a director from June 1991 though December 2006,to July 2007 and as Chief Executive Officer from July 2007 to July 2008. Mr. Lu also served as our Chairman of the Board from March 2003 to December 2006. On January 1, 2007, he assumed the title of Chief Executive Officer. In June 1991, Mr. Lu co-founded UTStarcom, Inc. under its prior name, Unitech Telecom, Inc., which subsequently acquired StarCom Network Systems, Inc. in September 1995. From 1986 through December 1990, Mr. Lu served as President and Chief Executive Officer of Kyocera Unison, a majority-owned subsidiary of Kyocera International, Inc. Mr. Lu served as President and Chief Executive Officer of Unison World, Inc., a software development company from 1983 until its merger with Kyocera in 1986. From 1979 to 1983, Mr. Lu served as Vice President and Chief Operating Officer of Unison World, Inc. Mr. Lu holds a B.S. in Civil Engineering from the University of California at Berkeley.

        Peter Blackmore has served as our Chief Executive Officer and President and as a director since July 2008, and served as our President and Chief Operating Officer sincefrom July 2007.2007 to June 2008. From 2005 until he joined the Company, Mr. Blackmore served as Executive Vice President in charge of world-wideworldwide sales, marketing and technology at Unisys Corporation. Prior to joining Unisys in 2005, he served as Executive Vice President of the Customer Solutions Group at Hewlett-Packard Company from 2004 and as Executive Vice President of the Enterprise Systems Group from 2002 through 2004. From 1991 until its acquisition by Hewlett-Packard in 2002, Mr. Blackmore served in a number of senior management positions with Compaq Computer Corporation, most recently as its Executive Vice President of worldwide sales and services from 2000 through 2002. Mr. Blackmore serves on the board of MEMC Electronic Materials Inc. He holds an M.A. in Economics from Trinity College, Cambridge, U.K.

Francis P. Barton has served as our Executive Vice President and Chief Financial Officer since August 2005 and as a director since October 2006. From May 2003 to July 2005, Mr. Barton was Executive Vice President and Chief Financial Officer of Atmel Corporation. From May 2001 to May 2003, Mr. Barton was Executive Vice President and Chief Financial Officer of BroadVision Inc. From 1998 to 2001, Mr. Barton was Senior Vice President and Chief Financial Officer of Advanced Micro Devices, Inc. From 1996 to 1998, Mr. Barton was Vice President and Chief Financial Officer of Amdahl Corporation. From 1974 to 1996, Mr. Barton worked at Digital Equipment Corporation, beginning his career as a financial analyst and moving his way up through various financial roles to Vice President and Chief Financial Officer of Digital Equipment Corporation's Personal Computer Division. Mr. Barton currently serves on the board of directors of ON Semiconductor Corporation. He holds a B.S. in Chemical Engineering from Worcester Polytechnic Institute and an M.B.A. with a focus in finance from Northeastern University

Philip Christopher has served as President of UTStarcom Personal Communications LLC, one of our wholly owned subsidiaries, since June 2004. Prior to joining us, Mr. Christopher was President and CEO of Audiovox Communications Corporation and Executive Vice President of Audiovox Corporation. Prior to our acquisition of Audiovox Communications Corporation, Mr. Christopher had been employed with Audiovox Corporation since 1970 and was elected to the company's board of directors in 1987. Mr. Christopher was a member of the White House Economic Council, and also serves on the board of directors of the Cellular Telecommunications Industry Association. Mr. Christopher is also the recipient of numerous industry and humanitarian awards and honors, including the prestigious Ellis Island Medal of Honor.

        Mark Green has served as our Senior Vice President of Global Human Resources and Real Estate since February 2007, and served as our Vice President of Human Resources from January 2006 to January 2007. Prior to joining us, Mr. Green was at Verisign Inc. from June 2005 as the Human Resources Director of Verisign Security Services. From 1992 to 2005, Mr. Green was at Nortel, where he joined their Human Resources Leadership Development Program, rotating through multiple Human Resources areas in the U.K. and the U.S. He then moved to Hong Kong, as International Human Resources Services Manager for the APAC region, returning to the U.S. as Senior Human Resources Business Partner for the Clarify eBusiness-Software Applications Division, then Human Resources Director of Nortel's Enterprise Division. Mr. Green received his BEng(Hons)B.Eng in Electrical and Electronic Engineering from Leeds University, U.K., and MSc(econ)MSc in Human Resources Management and Industrial Relations from the London School of Economics. He is also a graduate of the Institute of Personnel and Development, U.K.

        David KingSusan Marsch has served as our Senior Vice President, Sales,General Counsel, Secretary and Marketing & ServicesChief Ethics Officer since March 2006.April 2007. Prior to joining us, Mr. KingMs. Marsch was the Chief Executive Officer for Visual Wireless ABGeneral Counsel, Corporate Secretary and Vice President of Firefly Mobile, Inc. from 2004January 2006 to July 2006. From 1999September

2003 to 2004, Mr. KingDecember 2005, she was with Ericsson AB, initiallythe General Counsel, Corporate Secretary and Vice President at Redback Networks, Inc. Prior to joining Redback Networks, Ms. Marsch was the General Counsel, Corporate Secretary and Vice President of AltaVista Company from December 2001 to August 2003. She also served as General Counsel, Corporate Secretary and Vice President of Beatnik, Inc. from January 2000 to September 2001 and as Vice President, SalesAssociate General Counsel at The TCW Group, Inc. from February 1998 to January 2000. Ms. Marsch began her legal career at the law firm of Latham and Marketing for Wireline Systems, then as Vice President, Product Management & MarketingWatkins LLP in October 1993. She received a J.D. and held the position of Vice President and General Manager, Wireline Systems from 2002 to 2004. From 1996 through 1999 Mr. King was with PriceWaterhouse as a principal consultant and from 1992 to 1996 Mr. King was a senior consultant with Omega Partners. Mr. King was Chairman and non-executive board director for Ascade AB, Stockholm from 2001 to 2004. Mr. King served as an officer in the Royal Marines from 1985 to 1989. He holds a BSc in Electrical Engineering from Liverpool University, and an MBABBA from the London Business School.University of Michigan, and is a Certified Public Accountant.

        Viraj Patel has served as our Interim Chief Financial Officer, Vice President, Corporate Controller and Chief Accounting Officer since August 2008, and served as our Vice President, Corporate Controller and Chief Accounting Officer sincefrom November 2005.2005 to August 2008. Prior to joining us, Mr. Patel was Vice President of Finance for Celera Group from July 2005 to October 2005. Mr. Patel also served as Vice President of Finance for Nektar Therapeutics from March 2004 until June 2005. From November 2003 to March 2004, Mr. Patel served as an interim Corporate Controller for Extreme Networks. From 1999 to 2002, Mr. Patel was the Chief Financial Officer of AvantiAvant! Corporation. Prior to joining AvantiAvant! Corporation Mr. Patel worked for Pall

Corporation from 1989 through 1999 where he served as the Chief Accounting Officer. Mr. Patel began his career at PricewaterhouseCoopersPricewaterhouse (now PwC) in 1982. Mr. Patel holds a BBA from Pace University, New York. He is a Certified Public Accountant from the State of New York and is a member of the New York State Society of CPAs and a member of the American Institute of Certified Public Accountants.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Governance of Executive Officer Compensation Program

Role and Members of the Compensation Committee

        The Compensation Committee of the Board of Directors (the "Compensation Committee" or the "Committee") determines compensation for the Company's executive officers. The Committee is currently comprised of fourthree members of the Board of Directors, Messrs. Clarke, Horner, Lenzmeier and Toy, all of whom are independent (as defined under the rules of the NASDAQ Stock Market), non-employee directors. Mr. ToyLenzmeier has acted as chairpersonchairmen of the Committee through April 27, 2007, at which time Mr. Lenzmeier assumed the role. Mr. Clarke was appointed to the Committee onsince April 27, 2007.

        The Committee is responsible for:

•

Approving and overseeing the total compensation package for the Company's executives including their base salaries, incentives, deferred compensation, equity-based compensation, benefits and perquisites;



•

Reviewing and approving corporate goals and objectives relevant to the compensation of the Company's Chief Executive Officer (the "CEO"), evaluating CEOthe CEO's performance, and determining CEOthe CEO's compensation based on this evaluation;



•

Reviewing and approving corporate goals and objectives relevant to the compensation of the Chairman of the Board (the "Chairman"), evaluating the Chairman's performance, and determining the Chairman's compensation based on this evaluation;



•

Reviewing the CEO's performance evaluation of all executive officers (other than the Chairman and the CEO), and approving pay decisions; and



•

Reviewing periodically and making recommendations to the Board regarding any equity or long-term compensation plans, and administering these plans.

        The Compensation Committee operates according to a charter that details its specific duties and responsibilities. For additional information with respect to the Compensation Committee, please refer to the section entitled "Compensation Committee" at page 1312 of this Proxy Statement.

        In 2007, the Compensation Committee delegated authority to a designated management committee (the "Awards Committee") to review and approve equity awards to certain employees and service providers below the corporate vice-president level, in accordance with the Company's Equity Award Granting Policy and Procedures discussed below.

Named Executive Officers

        Our        The individuals who served as the Company's principal executive officer ouror principal financial officer and our three most highly compensated executive officers (other than our principal executive officer and principal financial officer) forduring fiscal year 2007 (our "Named2008 as well as the other individuals listed below are referred to in this Proxy Statement as the "Named Executive Officers"Officers" or "NEOs."

        Francis P. Barton, our former Executive Vice President and Chief Financial Officer; Peter Blackmore, PresidentOfficer, left the Company on August 31, 2008; and Chief Operating Officer; Philip Christopher, former President of UTStarcomUTStarcom's Personal Communications LLC; and David King, Senior Vice President, International Sales and Marketing. In addition, Ying Wu, our former Chairman and Chief Executive Officer of our China subsidiary, is considered an NEO for 2007 since he would have otherwise been named an NEO based on his total compensation in 2007 but for the fact that he was not serving as an executive officer ofDivision, left the Company at the end of fiscal year 2007. Mr. Wu's employment with us terminated on June 1, 2007.30, 2008.

Process for Evaluating Named Executive Officer Performance and Compensation

        The Compensation Committee generally holds at least four scheduled meetings during the year and holds additional meetings periodically to review and discuss executive compensation issues. The Compensation Committee may also consider and take action by written consent. In 2007, the Compensation Committee met twelve times and acted twice by written consent.

        In the first quarter of each fiscal year, generally in February, the Compensation Committee (i) considers any changes to executive officer base salaries, (ii) makes a determination whether any bonuses will be paid to our executive officers for the prior year's performance and to what extent, if any, (iii) reviews and approves annual equity grants for our executive officers in accordance with the Company's Equity Award Grant Policy (as defined below), and (iv) reviews the level of perquisites and benefits provided to each executive officer. As part of its annual process, the Compensation Committee meets to review and evaluate (i) Company performance, (ii) individual performance of each executive officer, and (iii) data related to market practices for executive compensation for each of our executive officers. During these meetings, our CEO reviews and discusses with the Committee the performance and contribution of each executive officer other than himself and the Chairman. He discusses each executive officer's achievement of strategic operational and financial goals. Our Chairman reviews and discusses with the Committee the performance and contribution of our CEO. While the Compensation Committee may discuss our CEO'sthe performance and compensation package of our CEO and Chairman with him,each of them, it meets in executive sessionsessions without him presentthem to determine histheir compensation. The Committee also has the opportunity to meet with each executive officer to discuss his or her performance during the prior fiscal year as well as goals for the current year.

        The Company's Human Resources department supports the Compensation Committee in its work. TheAdditionally, the Compensation Committee also hasengages a compensation consulting firm, whose services are described in further detail in the authority to engage the services of outside advisors, experts and others for assistance. The Compensation Committee did not retain an outside advisor prior to April 2007.following section.

Engagement of and Role of Independent Compensation Consultant

        In April 2007, the        The Compensation Committee engaged an independentengages a compensation consulting firm, Compensia, Inc. ("Compensia"), to advise the Compensation Committee and the Board on executive and equity compensation matters. The consulting firm reports directly to the Compensation Committee, and the Compensation Committee has sole authority to hire, fire and direct the work of the advisor. Compensia Inc.performs no other work for the Company, other than in support of work relating to the Compensation Committee.

        In 2008, Compensia assisted the Compensation Committee in selecting an appropriate peer group to assess executive pay levels, developed compensation "tally sheets" for each NEO, conducted a market pay assessment for each officer, and provided input to the Committee on equity compensation and market trends. Representatives from Compensia attend Compensation Committee meetings at the Committee's invitation.

        The "tally sheets" prepared by Compensia in 2008 provided a comprehensive summary of each Named Executive Officer's compensation, including: (i) an estimate of projected compensation for fiscal 2008, including total target cash compensation and the total estimated value of long-term equity incentive awards, to be received by each Named Executive Officer, (ii) a summary of the intrinsic value of all outstanding vested and unvested equity awards held by each Named Executive Officer at current stock prices; and (iii) the potential benefits in the event of involuntary severance or a change of control. These "tally sheets" provided the Compensation Committee with context for the decisions they made concerning total direct compensation and individual compensation elements. Although they did not necessarily drive decision-making with regard to specific elements of the Company's executive compensation program, the "tally sheets" enabled the Compensation Committee to assess total direct compensation and the relationship of various compensation elements to each other. These "tally sheets" also provided context to the Compensation Committee's views on a variety of issues, such as changes to severance plans and employment contracts, special equity grants to promote retention, or changes in long-term variable equity incentives.

Role of Executive Management in Compensation Evaluation Process

        Our Chief Executive OfficerCEO plays a significant role in the compensation setting process. Our CEO generally attends and participates in all Compensation Committee meetings; however, he does not attend executive sessions of the Compensation Committee or discussions involving decisions around his compensation. The key aspects of our Chief Executive Officer's role include (i) evaluating employee performance; (ii) assisting in the establishment of business performance targets and objectives; and (iii) recommending salary levels and equity awards other than for himself.himself and the Chairman. The Compensation Committee considers, but is not bound to and does not always accept, our Chief Executive Officer's recommendations with respect to executive compensation. The Compensation Committee typically follows the Chief Executive Officer's recommendations which are based on the same measurements the Compensation Committee uses for all executives (i.e., market data and individual performance objectives). Our Chief Executive Officer rarely recommends extraordinary adjustments for his direct reports.

While the Compensation Committee seeks input primarily from our Chief Executive Officer, the Committee consults with other executives, including our Chief Financial Officer andChairman, our Senior Vice President, Global Human Resources, and our Chief Financial Officer, to obtain recommendations with respect to Company compensation programs, practices, and packages for executives and other employees. The Compensation

Committee also has the opportunity to meet with each executive officer and discuss his or her individual performance, upon request. Other than participating in an annual evaluation process with our Chief Executive Officer and discussions with the Compensation Committee if and as requested, the other NEOs do not play a role in their own compensation determinations.

Executive Compensation Philosophy and Framework

Compensation Objectives

        UTStarcom'sThe Company's compensation program is designed to achieve three primary objectives:

1.

Create a high-performance culture by linking rewards to performance;



2.

Be competitive with the market in order to attract, retain and motivate the caliber of talent required to drive shareholder value;



2.

Create a high-performance culture by linking rewards to performance; and



3.

Apply reward practices in a fair and consistent manner.

Target Pay PositionRole of Market Data in Compensation Evaluation Process

        We use three primary pay components to support our compensation objectives: (i) base salary, (ii) an annual cash incentive/incentive ("bonus") and (iii) equity. Each is discussedequity awards (collectively, these components constitute the "direct compensation" of our executive officers). As described above, in greater detail below under "Evaluationconducting its annual compensation review at the beginning of Named Executive Officer Compensation." For each of these elements,fiscal year, the Compensation Committee examines peer groupis provided with an analysis of the compensation practices and targetsof one or more groups of peer companies. Typically, the Compensation Committee uses this analysis to compare the direct compensation including base salary, incentive bonusof our executive officers against the competitive market for executive talent (which, at the beginning of 2008 and equity,in prior years, the Committee generally set at approximately the 50^th percentile of our primary peer group (as defined below)).

        In making equity award decisions in February 2009, the Compensation Committee adjusted downward its version of the competitive market to reflect both the lag in current market data on equity awards as a result of the global economic downturn and the significant reduction in the "Compensation Benchmarking" section below). These target pay positions areCompany's revenues due primarily to the samedivestiture of the Personal Communications Division and other non-core businesses over the preceding 12 months. To account for all employeesthe lag in market data, the Company. While equity compensation is generally targeted at 50% ofCompensation Committee adjusted the market value duringof the equity awards reported by the median stock price decline (57%) of the primary peer group companies. In addition, as described in more detail under "Competitive Positioning" below, the Committee approved a new primary peer group for 2009 which is comprised of companies more comparable in scope to the Company's Februaryreduced size. As a result, while our pay had been set in 2008 equity grant process the decreased value of shares of our Common Stock affected our ability to targetbe approximately at the 50^th percentile of market in value without substantially depletingagainst our older (and larger revenue company) peer groups, our executive pay levels are now more generally aligned at the pool of shares available for grant to all employees under the 2006 Equity Incentive Plan. Targeting the 50^th75%

percentile would have also negatively impacted our equity burn rate. For these reasons, the value of our equity grants for fiscal year 2008 was generally between the 25^th and 50^th percentile of market practices.

newer (smaller revenue company) peer group. The Compensation Committee believes that this positioning is reasonable, appropriate and necessary to address recruiting and retention concerns in the current uncertain economic environment.

        While typically the Compensation Committee has approvedset the target compensation levels for our executive officers aboverelative to the competitive market for comparable positions, ultimately, and below the target pay position,consistent with our "pay-for-performance" philosophy, actual earned compensation amounts are based on Company and individual and Company performance, to ensure an appropriate pay-for-performance alignment.performance. This pay-for-performance alignmentapproach is further supportedenhanced by the Compensation Committee's decision to weight the majority of our use ofexecutive officers' direct compensation towards variable, or at-risk, compensation,"at-risk," pay components, which isare designed to provide that executivesexecutive officers receive target or above-targetabove-market total compensation only to the extent that Company and individual performance objectives have been achieved or exceeded.

        WhileNotwithstanding our pay-for-performance"pay-for-performance" philosophy, remains a central part of our compensation objectives, the Company's continuing lack of profitability over a number of years has led to increased the Compensation Committee's concern about our ability to recruit and retain qualified senior management personnelexecutives to lead our return to profitability. As a result, the Compensation Committee has taken into consideration recruiting and retention concerns as well as pay-for-performance during its evaluation of"pay-for-performance" in setting executive compensation levels in fiscal years 20072008 and 2008.2009.

Compensation BenchmarkingCompetitive Positioning

        We usehave developed two groups of peer groupscompanies to assess the competitiveness of executive officerthe compensation practices and levels of our executive officers, as described below. We assessThe first peer group, the compensation levelsdata for which was obtained from publicly-available sources, is used to establish the competitive market for our Chief Executive Officer and Chief Financial Officer positions (the "Primary Peer Group"). Because of the difficulty in identifying comparable positions at these peer group companies for our NEOs and other executive officersofficer positions, the other peer group is comprised of a select group of technology companies from the annual Radford High-Technology Executive Survey (the "Secondary Peer Group"). The Compensation Committee compares its compensation decisions against market practice as reflected by both peer groups when determining the compensation of our Chief Executive Officer and we useChief Financial Officer and against market practice as reflected by the secondary peer group to assessSecondary Peer Group when determining the compensation levels of all otherour executives officers and employees.

for whom a direct comparison with the pay practices of the Primary Peer Group is not possible.

        During fiscal year 2007, our "primary" peer group included        For purposes of its annual compensation review at the beginning of 2008, the Compensation Committee established the Primary Peer Group to consist of the following 21 companies, which were selected on the basis of being in related businesses and having comparable revenues (~$200M-$3.3B) and a comparable market capitalization (~$300M-$6B):

        The Compensation Committee also established the Secondary Peer Group to consist of 107 high technology companies included in the annual Radford High-Technology Executive Survey with revenues between $1 billion and $3 billionbillion. The identities of these companies are listed in revenue, as reportedAppendix A of this Proxy Statement.

        For purposes of its annual compensation review at the beginning of 2009, and to reflect the reduction in Radford's High-Technology Executive Survey. The profile of the primary peer group aligned with UTStarcom in terms of size. Our "secondary" peer group included 21 telecom companies with more than $1 billion in annualCompany's revenue and was likewise pulled frommarket capitalization over the Radford High-Technology Executive Survey. The secondary peer group was used as an additional reference point, and is composedpreceding 12 months, the

        In February 2008, Mr. Lu,        After the end of the fiscal year, each executive officer's performance against his or her performance objectives is assessed by our CEO, presentedChief Executive Officer. Our Chief Executive Officer then makes recommendations to the Compensation Committee for bonus paymentsas to the NEOspayout to be made for this individual performance component for executives other than himself,the Chairman. While the Compensation Committee considers these recommendations in deciding award payouts, it determines the payouts for each executive officer based on operatingits own evaluation of each executive's performance, and its consideration of one or more subjective factors such as its consideration of our "pay-for-performance" philosophy as well as recruiting and retention concerns.

        For 2008, the pre-established corporate performance objectives were annual revenue, annual bookings and annual improvement in net income, results and his assessment of their performance during the 2007 fiscal year.adjusted for certain one-time costs. The Compensation Committee believed that the attainment of the target levels established for these performance metrics were realistic but not easily achieved, and, therefore, would drive the achievement of the Company's short-term financial goals.

        In the case of our Chief Executive Officer, Chief Financial Officer, and Chairman of the Board, 50% of each annual cash incentive award opportunity was allocated to the achievement of corporate performance objectives. However, even if the target corporate performance objectives were achieved in full, the Compensation Committee reserves the right, in its sole discretion, to decrease the award payout applicable to that metric. This discretion may be applied to corporate as well as individual achievement. Similarly, the Compensation Committee has retained the authorityright, in its sole discretion, to assessmake award payouts for any corporate performance metric or metrics in the event that significant and unanticipated external events prevent the Company from meeting one or more pre-established corporate performance objectives.

2008 Bonus Program

        The following table sets forth the 2008 corporate performance objectives component as approved by the Compensation Committee:

        For Mr. Lu'sBlackmore, our CEO, 50% of his bonus opportunity was to be based on the Company financial performance in connectionobjectives described above; 40% was to be based on several strategic/operational initiatives (including a successful strategy review with the bonus payout process. Fifty percentBoard of Mr. Lu's MBOs areDirectors, successful execution of identified divestitures, compliance, benchmarking costs for business functions and setting the ethics tone for the organization); and 10% was to be based on people development, including building a high performance team, and establishing a succession plan.

        For Mr. Lu, our Chairman, 50% of his meeting or exceeding targets for profit, bookings, revenue, gross margin, cash flowbonus opportunity was to be based on the Company financial performance objectives described above; and inventory turns, and his remaining MBOs involve corporate level and role specific goals. Eighty percent of Mr. Barton's MBOs relates50% was to his oversight of the finance, legal, compliance, treasury and internal audit functions, and the remaining MBOs are corporate andbe based on several

strategic/operational initiatives (including a successful CEO transition, a successful strategy review with the Board of Directors, successful execution of identified divestitures, identifying new business opportunities and setting the ethics tone for the organization).

        For Mr. Green, 35% of his bonus opportunity was to be based on the Company financial performance objectives described above and company human resources and real estate department expense results; 45% was to be based on several strategic/operational initiatives (including leadership development, specific goals. Fifty percentstrategic staffing, supporting organizational restructuring and setting the ethics tone for the organization); and 20% was to be based on people development, including improving the performance management process and launching an employee engagement survey.

        For Mr. Patel, 40% of Mr. King's targethis bonus is contingent upon his achievement of MBOs which are discussed belowopportunity was to be based on the Company financial performance objectives described above and the remainder is comprised of sales commissions. Messrs. Blackmoredepartmental expense results; 55% was to be based on several strategic/operational initiatives (including timely filings, compliance, and Christopher did not participate in the discretionary bonus program during 2007, as discussed below.benchmarking departmental costs); and 5% was to be based on people development, including team development.

        In connectionDecember 2008, Mr. Blackmore, our CEO, met with this review, the Compensation Committee to evaluate the Company's preliminary financial results for 2008. At such time, Mr. Blackmore and the other Named Executive Officers recommended to the Committee that irrespective of achievement of individual performance objectives, no bonuses be paid in light of the Company's financial performance.

        In view of the Company's actual performance against the pre-established financial performance metrics and the NEO's recommendation with respect to payout on the individual performance objectives, the Compensation Committee decided not to pay any bonuses for 2008 performance to our executive officers, including the Named Executive Officers.

2007 Supplemental Discretionary Bonus Program

        The Compensation Committee determined during the last quarter of 2007, that, based on the Company's projected financial performance for 2007, no bonuses would be paid with respect to the NEOs for 2007, other than bonuses that were nondiscretionary. Mr. Wu was not eligible to receive a bonus for fiscal year 2007 since he was not employed by the Company at the endcorporate financial objectives portion of the fiscal year. The amounts paid as nondiscretionary bonuses are as follows:

(1)

Mr. Blackmore's2007 annual cash incentive plan. However, the Committee decided that, to offset the economic impact of this decision, it would offer Messrs. Patel and Green and other member of management, retention and supplemental bonus was nondiscretionary for 2007 and was paidopportunities in accordance with the terms of his offer letter agreement which provides that he would receive a guaranteed minimum bonus of $400,000 for 2007. For fiscal years after 2007, however, Mr. Blackmore will participate2008 in the discretionaryform of a "turnaround" bonus program described above.

(2)

This amount equals 2% of the after-tax operating profits of our Personal Communications Division for fiscal year 2007, of which Mr. Christopher is President.

(3)

Comprised of $72,234 in sales commissions related to his achievement of the following sales targets for 2007: (i) 76% of his bookings goal, (ii) 76% of his collections goal; and (iii) 0% of his contribution margin goal as a result of failing to hit the minimum threshold required for payment. Bookings and collections represents 80% of his total sales target and contribution margin represents 20% of his total sales target. Mr. King is also eligible to participate in the discretionary bonus program and his target bonus percentage for that program equals 33.5% of his annual base salary.

        Based on the Company's financial performance for 2007, the Compensation Committee determined that no bonuses would be paid to the executive officers for 2007, other than as set forth above. Instead,opportunity as part of the Company's strategic recovery plan,plan. These bonuses were to be payable in the discretion of the Compensation Committee restructured thebased on its evaluation of each executive officer's performance against a series of pre-established corporate financial objectives.

        The supplemental bonus program to provideopportunities for a bonus payable to Mr. KingMessrs. Patel and Green were structured as follows: (i)

•

Mr. Patel's total target bonus opportunity was equal to 50% of thehis 2007 base salary, while Mr. Green's total target discretionary bonus for which Mr. King would be eligible (i.e., 33.5%opportunity was equal to 65% of his 2007 base salary) would be paid in March 2008 if he met certain strategic operating goals during the fourth quarter of 2007, and (ii) the remaining salary;



•

50% of theeach executive officer's target bonus would be paidpayable in March 2008;



•

Up to 50% of each executive officer's target bonus would be payable in the fourth fiscal quarter of 2008 if (a) heif:



•

they met several specific performance goalsobjectives (including, for example, timely SEC filings and staffing key positions in the case of Mr. Patel, and reducing real estate expenses and implementing an option exchange program, in the case of Mr. Green) during the first three fiscal quarters of 20082008; and (b) 



•

the Company met its operating income goalstarget for thatthe same period.



•

In addition, if the Company succeeds in achieving within 25%Company's actual operating income for the first three fiscal quarters of 2008 was at least 75% of its budgeted operating income targetstarget as measured atof the end of the third fiscal quarter of 2008, the amount payable with respect to the latter portion of each executive officer's

supplemental bonus opportunity would be subject to the application of a multiplier maythat would operate as follows: the amount payable would be applied to Mr. King'sdetermined by multiplying (i) 50% the executive officer's applicable target bonus calculation. For example, if Mr. King meets 80%as a percentage of his goalsannual base salary by (ii) his actual performance as a percentage of his specific performance objectives for the first three fiscal quarters of 2008 by (iii) the Company's actual operating income for the first three fiscal quarters of 2008 as a percentage of its budgeted operating income target as of the end of the third fiscal quarter of 2008. (For example, if Mr. Patel met 80% of his performance objectives for the first three fiscal quarters of 2008 and the Company exceeds its budgeted operating income target as of the end of the third fiscal quarter of 2008 by 20% (i.e.,(that is, actual operating income was 120% of target), his bonus for this programportion of the supplemental bonus opportunity would be calculated as follows: bonus payment = base(base salary × applicable target bonus as percentage of annual salary50% × 80% × 120% × 50%. Participants in this bonus program include certain executive officers)/2. If Mr. Green met 80% of his performance objectives for the first three fiscal quarters of 2008 and vice-presidentsthe Company exceeds its budgeted operating income target as of the Company.end of the third fiscal quarter of 2008 by 20% (that is, actual operating income was 120% of target), his bonus for this portion of the supplemental bonus opportunity would be calculated as follows: bonus payment = (base salary × 65% × 80% × 120%)/2.)

        In FebruaryOctober 2008, the Compensation Committee assessed Mr. King'sevaluated Messrs. Patel and Green's performance against histheir strategic operating goalsobjectives for the fourthfirst three fiscal quarters of 2008, and after taking into consideration input from our Chief Executive Officer as to their performance, determined that Mr. Patel had achieved 75% of his objectives for the period and Mr. Green had achieved 100% of his objectives for the period. In addition, the Committee assessed the Company's financial results as of the conclusion of the third quarter of 20072008 and determined that he wouldthe Company had met 86% of its budgeted operating income target for the first nine months of the year. Based on these considerations, the Committee determined, in its discretion, that Messrs. Patel and Green should be paid $59,108 (50%$46,251 (equating to a performance factor of 64%) and $102,716 (equating to a performance factor of 86%), respectively, for this portion of the overall bonus opportunity. The Committee based this decision on the following factors: Mr. Patel did not meet 100% achievement on his metrics for the first three fiscal quarters of 2008; Mr. Green achieved 100% of his target percentage, or 17%metrics for the first three fiscal quarters of his base salary) based on his achievement of those strategic operating goals. The Compensation Committee plans to evaluate achievement of the 2008 strategic operating goals as soon as practicable upon the completion of the last measurement period.2008.

Equity Compensation

        Equity compensation is the largesta significant component of UTStarcom'sour executive officer compensation program. We believe this is an effective way to align the interests of our executive officers with those of our stockholders in order to achieve long-term stockholder value. In designing the equity program, we take into account stockholder concerns about stock usage and dilution. The Compensation Committee limits annual net issuances of stock-based awards, subject to extraordinary events (e.g., acquisitions). The Compensation Committee adjusts this target rate year-to-year based on performance and retention issues,objectives, also taking into account market practices. Officers and other employees of the Company are eligible to participate in the 2006 Plan, which was adopted by the Board of Directors and approved by the stockholders in July of 2006. They are also eligible to participate in the Company's Employee Stock Purchase Plan, as described below.

        Both time and performance-based stock awards were granted to the NEOs in 2007 and 2008 based on Company and individual performance. Performance for equity awards is generally measured against the same criteria as discussed in the "Bonus" section above.

2007 Focal Awards

        On November 30, 2007, in connection with the Company's annual focal award process for 2007 which had been postponed from February 2007 due to the Company's failure to timely file periodic reports with the Securities and Exchange Commission, the Compensation Committee granted certain of the NEOs shares of restricted stock and RSUs under the Company's 2006 Plan, as set forth below. Certain of the awards vest over time, as noted below, but the performance-based awards vest over a period of two years, with the additional requirement of achieving predetermined performance metrics as described below.

        Except as noted above, the time-based awards vest over four years as follows: 25% on each of February 29, 2008, February 27, 2009, February 26, 2010, and February 28, 2011, subject to the NEO remaining a service provider (as defined in the 2006 Plan) through each such date. The number of shares to be earned by each NEO with respect to the performance-based awards was to be determined by the Compensation Committee as soon as practicable following the 2007 fiscal year end, based on

each executive's achievement of certain management performance objectives 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 certain corporate objectives, and (iii) achievement by such NEO of additional individualized performance objectives reviewed and approved by the Compensation Committee. Mr. Blackmore did not participate in the program for 2007 because he had received an equity grant in connection with his initial employment and was not an employee for all of fiscal year 2007. Mr. Wu was not eligible to participate in this program since he was not an employee at the time of grant of the performance-based RSUs.

        At its meeting on February 26, 2008, the Committee measured each NEO's performance against the objectives established in November 2007 as described above and determined that the number of performance-based RSUs earned by each NEO was as follows:

        The earned RSUs will vest 50% on each of February 29, 2008 and February 27, 2009, subject to the NEO being a service provider (as defined in the 2006 Plan) on each such date. The RSUs that were not earned were forfeited.

2008 Focal Awards

        In February and March 2008, and in connection with the Company's annual focal award process, the Compensation Committee granted certain of the NEOs shares of restricted stock, restricted stock units ("RSUs") and performance shares under the Company's 2006 Plan, as set forth below. Certain of the awards vest over time, as noted below, but vesting of a majority of the awards is performance-based. Performance for equity awards is generally measured against the same criteria as discussed in the "Annual Cash Incentive Plan" section above, but discretion is used by the Compensation Committee with respect to any reduction in performance shares. The number of shares to be earned by each NEO with respect to the performance-based awards is to bewas determined by the Compensation

Committee as soon as practicable followingat the conclusion of the 2008 fiscal year end, based on each executive's achievement of certain managementthe same performance objectives established and determined for the Annual Cash Incentive Plan as described below.under "Annual Cash Incentive Plan" above.

        Except as noted above, the time-based awards vest over four years as follows: 25% on each of February 29, 2009, February 26, 2010, February 28, 2011, and February 29, 2012, subject to the NEO remaining a service provider (as defined in the 2006 Plan) through each such date.

        The performance-basedperformance based awards will be earned with respect to each NEO based on management performance objectives established and tailored for each NEO by the Committee for the Company's 2008 fiscal year, including (i) achievement of corporate financial measures such as bookings, gross margin, revenue, operating profit, net income, cash flow, inventory turns, contribution margin, cost reduction and cash collections, and (ii) achievement by such NEO of additional individualized performance objectives reviewed and approved by the 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, performance shares or shares of restricted stock earned by each NEO shall be determined by the Committee, in its sole discretion, provided that such NEO remains a service provider (as defined in the 2006 Plan)vest as follows: 50% of the Companyearned awards vested on February 27, 2009 and the date of determination. Following the determination of the number of RSUs, performance shares or shares of restricted stock earned by each NEO,remaining 50% of the earned awards shall vest on each of February 27, 2009 and February 26, 2010, provided that such NEO remains a service provider of the Company (as defined in the 2006 Plan) on those dates. Performance-based awards that are not earned will be forfeited.

Retention Program/Equity Incentive for Our Chief Financial Officer

        In November 2007, the Compensation Committee approved the terms of a retention plan for our CFO, Francis P. Barton, 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 2006 Plan in order to increase Mr. Barton's incentive as an owner and shareholder to drive the Company toward profitability.

        The agreement between Mr. Barton and the Company (the "Barton 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 2006 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 2006 Plan after taking into account Mr. Barton's focal awards for each particular year. Because of limits on the maximum amount of Equity that can be granted to an individual in any calendar year under the 2006 Plan, the Committee 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 2006 Plan as possible. Please see the section entitled "Employment Contracts and Severance Agreements with Named Executive Officers" in the "Potential Payments Upon Termination and Change of Control" section of this Proxy Statement for a description of the material terms of the Barton Retention Agreement.

Employee Stock Purchase Plan

        Our executive officers are eligible to participate in the Company's Employee Stock Purchase Plan to the same extent as all employees. The ESPP allows employees to purchase UTStarcom stock at a 15% discount. Up to 15% of an employee's annual base salary, but not more than $25,000, may be allocated to the purchase of the Company's Common Stock under this plan. All of our executive officers other than Mr. Christopher currently participate in the ESPP.

Benefits, Perquisites and Other Compensation

        We provide medical and other benefits to executives that are generally available to other full-time employees, including group term life insurance, expatriate remuneration for those employees who are assigned overseas and who qualify under the terms of our expatriate remuneration plan, tuition reimbursement and a 401(k) plan. The 401(k) plan is a defined contribution plan and, after one year of service, employees are eligible to receive a matching contribution from the Company of up to $5,500. Our NEOs other than Messrs. Blackmore and King participated in our 401(k) plan during 2007 and received matching contributions.

        We also provide the NEOs and certain other executives with additional perquisites, including financial planning services, (including, in some instances, a tax gross-up with respect thereto), tax assistance payments in connection with our tax equalization policy whereby we provide qualified employees with tax assistance to mitigate the tax differential arising from an employee's international work assignment, business travel accident insurance, a housing allowance, car/transportation allowances and relocation expenses for certain executives who have been asked to relocate to conduct business on behalf of the Company and disability insurance and car/transportation allowances.insurance. In addition, in accordance with the terms of Mr. Christopher's initial employment with us, we paypaid premiums on a term life insurance policy for his benefit.

        The Compensation Committee reviews the perquisites provided to executive officers as part of its overall review of executive compensation. In December 2008, the Compensation Committee adopted a policy against providing tax gross-ups to executives. Pursuant to this policy, the Company eliminated tax gross-ups in connection with the Company's financial planning services benefit. The Compensation Committee has determined the type and amount paid in perquisites to be within the appropriate range of competitive compensation practices. Details about the NEO'sNEOs' perquisites, including the fiscal year 2007

2008 cost to the Company, are shown in the Summary Compensation Table under the "All Other Compensation" column and the accompanying footnotes.

2009 Compensation Decisions

Base Salaries

        Similar to the process undertaken for 2008, Mr. Blackmore, our CEO, presented to the Compensation Committee his 2009 base salary for our executive officers, including the Named Executive Officers (other than himself and the Chairman of the Board) in February 2009. After a review of Company and individual performance, as well as market practices for executive compensation within our peer groups, the Compensation Committee determined that it would make no adjustments to the base salaries for any of our executive officers, including the Named Executive Officers, for 2009.

        In March 2009, Mr. Lu, our Chairman of the Board, and Mr. Blackmore, our Chief Executive Officer and President, agreed to voluntary and temporary base salary reductions of twenty percent (20%) for a one year period.

Equity Compensation

        In February 2009, and in connection with the Company's annual focal award process, the Compensation Committee granted certain NEOs RSU awards under the Company's 2006 Plan, as set forth below. While some of these awards vest over time, as noted below, the vesting of a majority of the awards is performance-based. The number of shares to be earned by each NEO with respect to his performance-based award will be determined by the Compensation Committee at the conclusion of fiscal 2009, based on the NEO's achievement of one or more specified performance objectives. While these objectives may be similar to the performance objectives used by the Compensation Committee to determine payments under the 2008 annual cash incentive plan, the Committee will set the actual objectives and has not set the objectives as of the time of the filing of this Proxy Statement.

        The following RSUs were granted:

        The time-based awards vest over four years as follows: 25% on each of February 26, 2010, February 28, 2011, February 29, 2012, and February 28, 2013, subject to the NEO remaining a service provider (as defined in the 2006 Plan) through each such date. The performance-based awards if earned vest as follows: 50% of the earned RSUs shall vest on each of February 26, 2010 and February 28, 2011, provided that the executive officer remains a service provider of the Company through those dates.

Benefits

        In February 2009, the Compensation Committee determined that it was in the best interest of the Company and its stockholders to suspend the Employee Stock Purchase Plan (the "ESPP") so that no further offering periods would commence until the Board of Directors or Compensation Committee provide otherwise and that all offering periods currently in effect would terminate on May 14, 2009, the next exercise date to occur under the ESPP.

        At the same time, the Compensation Committee further determined that it was in the best interest of the Company and its stockholders to suspend, until further declaration, making employer matching contributions on behalf of eligible participants in the Company's 401(k) plan. This decision took effect March 1, 2009.

Other Compensation Considerations

Post-Employment ObligationsCompensation

        During 2007,2008, the Company was party to change of control and involuntary termination severance agreements with certain of its NEOs, and had in place involuntary termination severance plans for the other NEOs. For a description of the material terms of these agreements, please see "Employment Contracts and Severance Agreements with Named Executive Officers" in the section entitled "Potential Payments Upon Termination and Change on Control" included in this Proxy Statement. The Compensation Committee believes these agreements are in the best interest of the Company's stockholders. As with any public company, the possibility of change of control exists for UTStarcom.the Company. Such a change of control typically means a degree of ambiguity for executives about the stability of their employment. The Compensation Committee believes these agreements help to ensure that executives will remain focused on, and committed to, the interests of the business throughout the process of exploring and/or executing a change of control.

        In June 2006, the Compensation Committee adopted the Executive Involuntary Termination Severance Pay Plan (the "Executive Severance Plan"), which extends certain change of control and severance benefits to some of the Company's executive officers, including Mr. King, who do not have individual agreements with the Company. Please see "Employment Agreements and Change of Control Arrangements with Executive Officers Other Than Named Executive Officers" in this Proxy Statement for a description of the material terms of the plan. The Compensation Committee believes that the plan is in the best interests of the Company and its stockholders in that the plan, like the agreements with certain of our NEOs described above, helps to ensure the focus and commitment of our executive team during the process of exploring and/or executing a change of control.

Reasonableness of Compensation

        The Compensation Committee believes it is fulfilling UTStarcom's compensation objectives and in particular, rewarding executive officers in a manner that supports our strong pay-for-performance

philosophy. Executive compensation is tied to our performance and is structured to ensure that there is an appropriate balance between our long-term and short-term performance, and also a balance between our operational performance and stockholder return. On average, the target total direct pay position for the NEOs in 2007 was between the 50^th and 75^th percentile of the primary peer group. The Compensation Committee believes the average target pay position relative to market and pay mix are reasonable and appropriate and are necessary to address recruiting and retention concerns in a "turnaround" environment. Mr. Barton's base salary remains high relative to our peer group; however as discussed earlier, his salary reflects (i) his assumption of substantially greater duties, including responsibility for the Legal and Business Development departments after the departure of the Company's previous Chief Financial Officer, (ii) the Compensation Committee's assessment of his criticality to ongoing Company success and (iii) Mr. Barton's extensive senior finance experience.

Other Considerations

Equity Grant Practices

        The Compensation Committee approves all equity grants to our executive officers. During fiscal year 2007, the Company's equity award pool for awards (including new hire grants and any merit or focal awards) to be made during that period was approved by the Board of Directors. A percentage of this total approved pool was designated for distribution to the company executives. Functional Vice Presidents recommended annual equity grants to their supervised employees based on individual performance, with our Chief Executive Officer making recommendations for his direct reports. The Company's Human Resources department then compiled the list of recommendations and presented those recommendations to the Compensation Committee for approval. Any recommendation with respect to equity grants for our Chief Executive Officer was made by the Compensation Committee.

        On April 10, 2007, the Compensation Committeehas adopted the UTStarcom, Inc. Equity Award Grant Policy and Procedures (the "Equity Award Grant Policy"), which applies to all equity awards from that date forward. In accordance with the Company's equity award grant policy,Equity Award Grant Policy, equity awards to executive officers are considered and approved as follows:

•

All equity awards to executive officers are to be approved by the Compensation Committee;



•

The Compensation Committee will use its best efforts to approve equity awards at a duly called meeting of the Compensation Committee, and awards will be made by unanimous written consent only if meetings are unable to be held;



•

The date of grant of any equity award will be the last trading day in the month in which the Compensation Committee approves the award; and



•

For purposes of equity awards that are to be granted at the fair market value of the Company's Common Stock, the fair market value shall be the closing sales price per share of the Company's Common Stock on the date of grant.

        Compensation Committee meetings may be held at any time to consider the approval of equity awards proposed to be provided to new executive officers (including new executive officers resulting from either new hires or promotions, but other than annual focal awards, as described below), but equity awards granted by the Compensation Committee shall become effective as of the last trading day of the month of grant.

        Compensation Committee meetings to consider the approval of annual focal awards to executive officers shall be held during the last two weeks of February of each year, if reasonably practicable, and

subject to compliance with applicable laws, rules and regulations. If a meeting cannot be held and/or equity awards cannot be granted in accordance with applicable laws, rules and regulations during this time period, the Compensation Committee shall determine the meeting date for the consideration and

approval of focal awards. The Compensation Committee shall meet to approve focal equity awards during an open trading window as such term is defined in the Company's Insider Trading Policy.Policy, if the meeting is not held during the last two weeks of February.

        Equity grants made to employees who are not executive officers or corporate vice presidents may be made by the Awards Committee, a management committee duly formed and authorized by the Compensation Committee and consisting of the Company's Chief Financial Officer, Senior Vice President of Human Resources, General Counsel and Chief Accounting Officer. The Awards Committee may grant stock options or restricted stock units and only then in accordance with specific guidelines set by the Compensation Committee. Any award grants approved by the Awards Committee are effective as of the last trading day of the month of grant. Equity grants are made subject to an annual equity pool approved by the Compensation Committee. The approval pool to be awarded by the Awards Committee consisted of 1,000,000 shares in 2007 and will consist of 2,000,000 shares in 2008. This increase to the equity pool reflects the additional authority granted by the Compensation Committee to the Awards Committee to review and award all focal and new hire awards to employees and service providers below the corporate vice president level and within certain established guidelines. The Human Resources Department provides quarterly updates to the Compensation Committee regarding equity usage.

Tax ConsiderationsBurn Rate Policy

        The Board of Directors has adopted a burn rate policy committing the Company to limit the number of shares of our Common Stock that we may use for equity compensation during fiscal years 2008, 2009 and 2010. For this three-year period, the policy limits the number of shares that we grant subject to equity awards to an average of 4.80% of our outstanding Common Stock. Thus, while we may exceed the 4.80% burn rate in a given year, the policy requires that our three-year average not exceed 4.80%. Awards that are settled in cash, awards sold under the ESPP, awards assumed in acquisitions and any awards granted in connection with our option exchange program will be excluded from our burn rate calculation. For purposes of our calculation, each share subject to a full value award (such as a restricted stock unit, performance share, performance unit and any other award that does not have an exercise price per share equal to the per share fair market value of our common stock on the grant date) will be counted as 1.5 shares.

Section 162(m) of the Internal Revenue Code

        Section 162(m) of the Internal Revenue Code statesprovides that public companies cannot deduct compensation paid to certain of its topsenior executive officers in excess of $1 million per officer per year, but excludes from the calculation of the $1 million limitthis limitation certain elements of compensation, including performance-based"performance-based compensation," provided that certain requirements are met. We believe it is in our best interest, to the extent practical, to have executive officer compensation be fully deductible under Section 162(m). However, theThe Compensation Committee alsotakes compliance with Section 162(m) into account while making compensation decisions and retains the discretion for competitive reasons, to providepay compensation that mayis not be fully deductible. In a few instances, a portion of our annual bonus payments to certain of our executive officers does not currently qualify as deductible under Section 162(m). The Compensation Committee will continue to evaluate whether it is in the Company's best interest to qualify future incentive awards under Section 162(m). While stock options granted under our 1997 Stock Plan (the "1997 Plan") did not meet the requirements of Section 162(m), future equity awards will be granted under our 2006 Plan, which was approved by our stockholders, and therefore meetsmeet the requirements underof the "performance-based compensation" exception of Section 162(m).

Section 409A of the Internal Revenue Code

        Section 409A of the Internal Revenue Code imposes additional significant taxes in the event an NEO, director or other service provider receives "deferred compensation" that does not satisfy the requirements of Section 409A. Although we do not maintain a traditional nonqualified deferred compensation plan, Section 409A applies to certain severance arrangements and equity awards. Consequently, to assist in avoiding additional tax under 409A, we developed the severance arrangements described above in "Post-Employment Obligations"Compensation" in a manner intended to either avoid the application of Section 409A or, to the extent doing so is not possible, comply with the applicable Section 409A requirements.

Stock Ownership Guidelines

        Effective January 1, 2006, by the decisionCompany adopted stock ownership guidelines (the "Guidelines") for non-employee directors and certain executive officers.

        Each executive officer and non-employee director is expected to acquire and hold the number of shares of the Company's Common Stock specified below before the later of four years after (i) January 1, 2006 or (ii) the executive officer's appointment to such position or a non-employee director's appointment to the Board.

        The Company reviews compliance with the Guidelines annually. Failure to comply with the Guidelines may result in a reduction in future long-term incentive award and/or payment of future annual and/or long-term incentive payouts made in the form of shares of the Company's Common Stock. The Nominating and Corporate Governance Committee has the discretion to waive the Guidelines if compliance would create severe personal hardship for an executive officer or non-employee director or prevent an executive officer or non-employee director from complying with a court order. The Nominating and Governance Committee of the Board, the Company imposed minimum stock ownership guidelines for certain executive officers as well as non-executive directors of the Company. Each executive officer is expected to acquire the required number of shares of Common Stock as set forth by the guidelines (which range from 10,000 shares to 50,000 shares, depending on the level of responsibility of the officer) before the later of (i) four years after the effective date of the guidelines or (ii) four years after an officer's appointment toexpects that such executive office.instances will be rare. All executives requiredsubject to comply with these guidelinesthe Guidelines have currently meetsatisfied the ownershipminimum requirements for 2008.

requirements. See the section entitled "Stock Ownership Guidelines" in this Proxy Statement for additional information with respect to this program.

REPORT OF THE COMPENSATION COMMITTEE

        The following is the report of the Compensation Committee. The information contained in this report shall not be deemed to be "soliciting material" or to be "filed" with the SEC, or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act, except to the extent that the Company specifically requests that such information be treated as soliciting material or specifically incorporates the information by reference in any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

        The Compensation Committee of the Board of UTStarcom Inc. was established on January 31, 1997 and is currently comprised of fourthree members: Messrs. Clarke, Horner, Lenzmeier and Toy. Mr. Lenzmeier, the Chairman of the Compensation Committee, and Messrs. HornerClarke and Toy served on the Committee throughout 2007. Mr. Clarke was appointed to serve on the Compensation Committee on April 27, 2007.2008.

        During 2007,2008, the Compensation Committee was comprised solely of non-employee directors who were each: (i) independent as defined under the NASDAQ Marketplace Rules, (ii) a non-employee director for purposes of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and (iii) an "outside director" for purposes of Section 162(m) of the Internal Revenue Code. During 2008,2009, the Compensation Committee will continue to be comprised of directors who meet these same standards.

        The Compensation Committee has reviewed and discussed the "Compensation Discussion and Analysis" section of this Proxy Statement with management, including UTStarcom's Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer. Based on this review and discussion, the Compensation Committee recommended to the Board that the "Compensation Discussion and Analysis" section be included in this Proxy Statement.

Summary Compensation Table for Fiscal Year 20072008

        The following table presents information concerning the total compensation of (i) our principal executive officer, (ii) our principal financial officer, (iii) our three most highly compensated executive officers,the individuals who served as the Company's CEO, CFO and other than our principal executive officer and principal financial officer, who were serving as executive officers at the end of our 2007 fiscal year, and (iv) a former executive officer for whom disclosure would have been provided but for the fact that he was not serving as an executive officer at the end of the 2007 fiscal year (the "Named Executive Officers"). during 2008. No disclosure is provided for fiscal year2007 and 2006 for those persons who were not Named Executive Officers in 2006.2007 and/or 2006

SUMMARY COMPENSATION TABLE

*

Mr. Blackmore joinedBarton our former Chief Financial Officer left the Company on July 2, 2007.August 31, 2008.

**

Mr.Philip Christopher, was not a Named Executive Officer during fiscal year 2006 and thus, pursuant to SEC guidance, his 2006 compensation is not included on this table.

***

Mr. King was not a Named Executive Officer in fiscal year 2006 and thus, pursuant to SEC guidance, his 2006 compensation is not included on this table.

****

Mr. Wu's employment withour former President of UTStarcom Personal Communications Division, left the Company terminatedcompany on June 1, 2007.30, 2008.

(1)

The amounts listedreported represent the dollar value of bonuses earned by the Named Executive OfficersNEOs during the fiscal year covered, regardless of when such bonuses were actually paid.

(2)

Amounts shownreported for 2008 do not reflect compensation actually received by the Named Executive Officers.NEOs. Instead, amounts reported are the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended December 31, 2008 in accordance with SFAS 123(R), including amounts for stock awards granted in and prior to 2008. Pursuant to SEC regulations, the amounts reported exclude the impact of estimated forfeitures related to service-based vesting conditions. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 2 to our 2008 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Amounts reported for 2007 do not reflect compensation actually received by the NEOs. Instead, amounts shown are the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended December 31, 2007 in accordance with SFAS 123(R), including amounts for stock awards granted in and prior to 2007. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Except for Mr. Blackmore, certain amounts include awards with performance-based vesting conditions, with compensation initially measured under SFAS 123(R) at grant date fair value and re-measured at each financial statement reporting date. The cumulative




compensation cost for such awards is adjusted to reflect the fair value at the time the Compensation Committee determines the ultimate number of awards earned. For a discussion on the Compensation Committee's final award determinations based upon the performance-based vesting conditions and the cumulative dollar amount recognized for financial statement reporting in accordance with SFAS 123(R), please see footnotes 1 and 3 to the table entitled "Grants of Plan-Based Awards in Fiscal year 2007" contained in this Proxy Statement. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 14 to our 2007 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

(3)

Amounts shown for 2006 do not reflect compensation actually received by the Named Executive Officers.NEOs. Instead, amounts shown are the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended

December 31, 2006 in accordance with SFAS 123(R), including amounts for stock awards granted in and prior to 2006. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The amounts include awards with performance-based vesting conditions, with compensation initially measured under SFAS 123(R) at grant date fair value and re-measured at each financial statement reporting date. The cumulative compensation cost for such awards is adjusted to reflect the fair value at the time the Compensation Committee determines the ultimate number of awards earned. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 2 to our 2006 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

(4)(3)

Amounts shownreported for 2008 do not reflect compensation actually received by the Named Executive Officers.NEOs. Instead, amounts reported are the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended December 31, 2008 in accordance with SFAS 123(R), including amounts for stock option awards granted in and prior to 2008. Pursuant to SEC regulations, the amounts reported exclude the impact of estimated forfeitures related to service-based vesting conditions. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 2 to our 2008 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Amounts shown for 2007 do not reflect compensation actually received by the NEOs. Instead, amounts shown are the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended December 31, 2007 in accordance with SFAS 123(R), including amounts for stock option awards granted in and prior to 2007. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 14 to our 2007 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The exercise price of certain stock options granted under option agreements executed in February 2002 was increased from $20.25 per share to $22.93 per share, and the exercise price of certain stock options granted under option agreements executed in July 2002 was increased from $15.72 per share to $20.82 per share. The incremental fair value, computed as of the modification date in accordance with SFAS 123(R), with respect to each such modified award is $0. For a discussion of modifications made to outstanding equity awards held by certain Named Executive Officers, please see the section entitled "Executive Compensation—Modifications to Outstanding Equity Awards" contained in this Proxy Statement.



(5)

Amounts shown for 2006 do not reflect compensation actually received by the Named Executive Officers.NEOs. Instead, amounts shown are the dollar amounts recognized for financial statement reporting purposes for the fiscal year ended December 31, 2006 in accordance with SFAS 123(R), including amounts for stock option awards granted in and prior to 2006. Pursuant to SEC regulations, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The amounts include awards with performance-based vesting conditions, with compensation initially measured under SFAS 123(R) at grant date fair value and re-measured at each financial statement reporting date. The cumulative compensation cost for such awards is adjusted to reflect the fair value at the time the Compensation Committee determines the ultimate number of awards earned. A discussion of the valuation assumptions used for purposes of the SFAS 123(R) calculation is included under Note 2 to our 2006 Consolidated Financial Statements that are part of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006. The exercise price of certain stock options granted under option agreements executed

(4)

This amount includes a $100,000 signing bonus paid in February 2002 was increased from $20.25 per share to $22.93 per share,connection with Mr. Blackmore's initial employment and the exercise price of certain stock options granted under option agreements executed in July 2002 was increased from $15.72 per share to $20.82 per share. The incremental fair value, computed as of the modification datea $400,000 guaranteed bonus paid in accordance with SFAS 123(R),the terms of the employment agreement with respect to each such modified award is $0. For a discussion on modifications made to outstanding equity awards held by certain Named Executive Officers, pleaseMr. Blackmore. Please see the section entitled "Executive Compensation—Modifications to Outstanding Equity Awards" contained inof this Proxy Statement.Statement entitled "Employment Contracts and Severance Agreements with Named Executive Officers" for a summary of the employment agreement with Mr. Blackmore.

(5)

This amount consists of a premium payment of $802 for disability insurance.

(6)

This amount consists of 401(k) matchmatching payments in the aggregate amount of $5,500, $6,355 for financial planning, $12,103 as a car allowance, $48,000 for a housing allowance, $471 in meal allowance, $4,547 for a home visit in connection with Mr. Lu's international work assignment, a tax assistance payment of $472,319 paid in connection with our tax equalization policy whereby we provide qualified employees with tax assistance to mitigate the tax differential arising from an employee's international work assignment, $250 in taxable relocation benefits in connection with Mr. Lu's international work assignment, a premium payment of $802 for disability insurance.

(7)

This amount consists of 401(k) matching payments in the aggregate amount of $5,500, a premium payment of $1,235 for life insurance coverage under our Business Travel Accident Insurance Policy, $12,000 for financial planning services for executives and a tax gross-up in the amount of $6,817 related thereto, $5,611 as a car allowance, $24,000 for a housing allowance in connection with Mr. Lu's international work assignment, a tax assistance payment of $100,680 paid in connection with our tax equalization policy whereby we provide qualified employees with tax assistance to mitigate the tax differential arising from an employee's international work assignment, $15,000 in taxable relocation benefits in connection with Mr. Lu's international work assignment, a premium payment of $802 for disability insurance and $26,922 as payment for accrued but unused paid time off.

(7)(8)

This amount consists of $12,200 for financial planning services, for executives, a premium payment of $645 for life insurance coverage under our Business Travel Accident Insurance Policy and 401(k) matching payments in the aggregate amount of $5,500.

(9)

This amount consists of $4,048 for financial planning services, 401(k) matching payments in the aggregate amount of $5,500 and $4,251 for ESPP disqualifying disposition and $802 for disability insurance.

(10)

This amount consists of $1,950 for financial planning services, 401(k) matching payments in the aggregate amount of $5,500, and $802 for disability insurance.

(11)

This amount consists of $9,000 for legal services, and a tax gross-up in the amount of $4,450 related thereto, 401(k) match payments in the aggregate amount of $5,500.$5,500, $52,342 for a car allowance and service, and a premium payment of $534 for disability insurance. Also includes $380,000 as severance payment at time of termination in connection with Mr. Barton's retirement. Please see the section of this Proxy Statement entitled "Employment Contracts and Severance Agreements with Named Executive Officers" for a summary of Mr. Barton's employment agreement and his severance.

(8)(12)

This amount consists of 401(k) matchmatching payments in the aggregate amount of $5,500, a premium payment of $1,235 for life insurance coverage under our Business Travel Accident Insurance Policy, $5,000 for financial planning services for executives and a tax gross-up in the amount of $2,782 related thereto, $69,664 for a car allowance and service, and a premium payment of $802 for disability insurance.

(9)(13)

This amount consists of $10,000 for financial planning services, for executives, a premium payment of $645 for life insurance coverage under our Business Travel Accident Insurance Policy, $85,624 for a car allowance and service and 401(k) matchmatching payments in the aggregate amount of $5,500.

(10)(14)

This amount consists of a severance payment totaling $1,535,714 in connection with Mr. Christopher's termination of employment, $12,414 as a car allowance, a premium payment of $401 for disability insurance, and $52,221 for a term life insurance policy.

(15)

This amount consists of 401(k) matchmatching payments in the aggregate amount of $5,500, a premium payment of $1,235 for life insurance coverage under our Business Travel Accident Insurance Policy, $24,827 as a car allowance, a premium payment of $802 for disability insurance and premium payments in the aggregate amount of $52,500 for a term life insurance policy.

(11)

This amount consists of a premium payment of $1,235 under our Business Travel Accident Insurance Policy, a $15,000 housing allowance, $12,994 in taxable relocation expenses and a premium payment of $568 for disability insurance.

(12)

This amount consists of a severance payment totaling $998,769 in connection with Mr. Wu's termination of employment, 401(k) match payments in the aggregate amount of $5,500, a premium payment of $8,769 under our Business Travel Accident Insurance Policy, $5,000 for financial planning services for executives, $24,000 as a housing allowance paid in connection with Mr. Wu's international work assignment, a tax assistance payment of $462,267 paid in connection with our tax equalization policy whereby we provide qualified employees with tax assistance to mitigate the tax differential arising from an employee's international work assignment and a premium payment of $334 for disability insurance.

(13)

This amount consists of a housing allowance of $48,000 paid in connection with Mr. Wu's international work assignment, a tax assistance payment of $216,413 paid in connection with our tax equalization policy whereby we provide qualified employees with tax assistance to mitigate the tax differential arising from an employee's international work assignment, a tax return filing fee payment of $250, $19,230 for payout of accrued but unused paid time off, a premium payment of $645 for life insurance coverage under our Business Travel Accident Insurance Policy and 401(k) match payments in the aggregate amount of $5,500.

(14)

Amounts shown for stock awards and option awards in 2007 reflect the reversal of compensation cost shown in the table as 2006 compensation in accordance with SFAS No. 123R, resulting from Mr. Wu's forfeiture of performance stock and option awards upon his termination of employment with the Company on June 1, 2007. In accordance with interpretative guidance provided by the Securities and Exchange Commission, only the previously expensed portions of equity awards that were previously included in the Summary Compensation Table have been included.

(15)

This amount includes a $100,000 signing bonus paid in connection with Mr. Blackmore's initial employment and a $400,000 guaranteed bonus paid in accordance with the terms of the Blackmore Agreement, as amended. For the material terms of the Blackmore Agreement, please see the section of this Proxy Statement entitled "Employment Contracts and Severance Agreements with Named Executive Officers."

        Mr. Blackmore's annual base salary for fiscal years 2007 and 2008 is currently set at $800,000 per year. Please see "2008 Base Salary Actions" in the Compensation Discussion and Analysis included in this Proxy Statement for a description of the actions taken by the Compensation Committee with respect to salaries of our Named Executive Officers for fiscal year 2008.

        For a description of the Company's process for determining the payment of discretionary bonuses to certain of its executive officers and the payment of long-term, non-equity incentive compensation to Messrs. Christopher and King, please see the section entitled "Bonus" in the Compensation Discussion and Analysis included in this Proxy Statement.

        From time to time, we enter into offer letters and other agreements with our executive officers. For a description of the material terms of such offer letter agreements, and a description of severance and change of control agreements entered into with certain of our executive officers, please see the section entitled "Employment Contracts and Severance Agreements with Named Executive Officers" in the "Potential Payments Upon Termination and Change of Control" section included in this Proxy Statement.

        For a description of material modifications made to certain of the Named Executive Officers' outstanding equity awards, please see the section entitled "Modifications to Outstanding Equity Awards" included in this Proxy Statement.

Grants of Plan-Based Awards

        The following table presents information concerning grants of plan-based awards to each of the Named Executive Officers during the fiscal year ended December 31, 2007.2008.

GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 20072008