EX-10.1 Associate Stock Option Plan - RSUs(ADS)



 




Exhibit 10.1






SATYAM COMPUTER SERVICES LIMITED



I FLOOR, MAYFAIR CENTRE, SP ROAD SECUNDERABAD, AP, INDIA — 500 003



Associate
Stock Option Plan — RSUs(ADS)
[the Plan or
ASOP — RSUs(ADS)]



 



	1.	 	Purposes of the ASOP — RSU (ADS):
	 
	 	 	1.1  In its continuing efforts to create participative environment contributing to the
growth of associates as part of the corporate growth plan, SATYAM COMPUTER SERVICES
LIMITED (SATYAM) formulated new Associate Stock Option Plan — RSU (ADS), (the Plan
or ASOP — RSUs(ADS)).
	 
	 	 	1.2  Among others, the Plan is primarily aimed at the following:






	 	•	 	To reward the associates for their performance and contribution to the
success and growth of SATYAM.
	 
	 	•	 	To motivate, retain, attract the best talent.
	 
	 	•	 	To provide an opportunity for the professional partners to become
financial partners.






	2.	 	Definitions: As used herein, the following definitions shall apply:






	 	(a)	 	“Administrator” means the Compensation Committee of
Directors as constituted by the Board of Directors or any of its
Committees responsible for the general administration of the Plan in
accordance with Section 4 hereof.
	 
	 	(b)	 	“ADR” shall mean an American Depositary Receipt
evidencing ADS(s) corresponding to Share(s).
	 
	 	(c)	 	“ADS” shall mean an American Depositary Share
corresponding to Share(s).
	 
	 	(d)	 	“Advisory Board” means group of Associates
consisting of the Managing Director / CEO, Head (AIC) — Human Resources,
‘Chief Financial Officer’ (CFO), and ‘the Company Secretary’. The
Compensation Committee may also nominate such other additional members,
if required at its sole discretion.
	 
	 	(e)	 	“Applicable Laws” means the legal requirements
relating to the Plan, including, without limitation, the tax, securities
or corporate laws of India, any stock exchange or quotation system on
which the ADSs are listed or quoted, or the applicable laws of any other
country or jurisdiction where RSU (ADSs) are, or will be, granted under
the Plan.
	 
	 	(f)	 	“Associate” means any person, including officers
and Directors, employed by SATYAM or any Parent or Subsidiary of SATYAM.
Neither service as a Director nor payment of a director’s fee by SATYAM
shall be sufficient to constitute “employment” by SATYAM.
	 
	 	(g)	 	“Board” means the Board of Directors of SATYAM.
	 
	 	(h)	 	“Code” means the United States Internal Revenue
Code of 1986, as amended, or any successor statute or statutes thereto.
Reference to any particular Code section shall include any successor
section.




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	 	(i)	 	“Committee” means a committee appointed by the
Board in accordance with Section 4 hereof.
	 
	 	(j)	 	“Director” means a member of the Board.
	 
	 	(k)	 	“Disability” means total and permanent disability
as defined in Section 22(e) (3) of the Code.
	 
	 	(l)	 	“Exchange Act” means the Securities Exchange Act of 1934, as
amended.
	 
	 	(m)	 	“Fair Market Value” means the value for one ADS, determined as
follows
	 
	 	 	 	(i)  the closing price of an ADS on the principal exchange on which such shares are then trading, if any (or as reported on any composite index
which includes such principal exchange), on the most recent trading day
prior to such determination date; or
	 
	 	 	 	(ii)  the ADS is not traded on an exchange, the mean between the closing
representative bid and asked prices for an ADS on the most recent trading
day prior to such determination date as reported by NYSE or, if NYSE is not
then in existence, by its successor quotation system; or
	 
	 	 	 	(iii)  if the ADS is not publicly traded on an exchange and not quoted on
NYSE or a successor quotation system, the fair market value of an ADS
determined in good faith by the Administrator in its sole discretion.
	 
	 	(n)	 	“Incentive RSU (ADS)” means an RSU (ADS) intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and
which is designated as an Incentive RSU (ADS) by the Administrator.
	 
	 	(o)	 	“Non-statutory RSU (ADS)” means an RSU (ADS) (or
portion thereof) that is not designated as an Incentive RSU (ADS) by the
Administrator, or which is designated as an Incentive RSU (ADS) by the
Administrator but fails to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
	 
	 	(p)	 	“Optioned Stock” means the ADSs subject to an RSUs(ADS).
	 
	 	(q)	 	“Parent” means a “parent corporation,” whether now
or hereafter existing, as defined in Section 424(e) of the Code.
	 
	 	(r)	 	“Plan” means Associate Stock Option Plan — RSUs(ADS)
	 
	 	(s)	 	“RSU (ADS)” means an RSU (ADS) granted pursuant to
the Plan.
	 
	 	(t)	 	“RSU (ADS) Agreement” means a written or electronic
agreement between SATYAM and an RSU holder evidencing the terms and
conditions of an individual RSU (ADS) grant. The RSU (ADS) Agreement is
subject to the terms and conditions of the ASOP — RSUs (ADS).
	 
	 	(u)	 	“RSU holder” means the holder of an outstanding
RSU (ADS) granted under the Plan.
	 
	 	(v)	 	“Share” means an Equity Share of SATYAM, as
adjusted in accordance with Section 11 of the Plan.




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	 	(w)	 	“Subsidiary” means a “subsidiary corporation”
whether now or hereafter existing, as defined in Section 424(f) of the
Code.
	 
	 	(x)	 	“SATYAM” means Satyam Computer Services Limited, a
company organized under the laws of India.






	3.	 	Stock Subject to the Plan: Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of ordinary shares for ADSs which may be issued
upon exercise of RSU (ADS) and sold under the Plan shall be 13 million minus the
number of shares issued from time to time under the Associate Stock Option Plan —
RSUs (the Company’s domestic equity shares plan). The ADSs may be authorized but
unissued, or reacquired.
	 
	 	 	If an RSU (ADS) expires or becomes unexercisable without having been exercised in
full, the unpurchased ADSs which were subject thereto shall become available for
future grant or sale under the Plan (unless the Plan has been terminated). However,
ADSs that have actually been issued under the Plan upon exercise of an RSU (ADS),
shall not be returned to the Plan and shall not become available for future
distribution under the Plan.
	 
	4.	 	Administration of the Plan:
	 
	 	 	(a)  Administrator. The Plan shall be administered
by the Compensation Committee of Directors of the Company.
	 
	 	 	(b)  Delegation of authority for day-to-day
administration. To the extent permitted
by the applicable laws, the Compensation Committee may delegate to the Advisory Board
or one or more members of the Advisory Board, the day-to-day administration of the
Plan and / or any of the functions assigned to it in this Plan.
	 
	 	 	(c)  Powers of the Administrator. Subject to the provisions of the Plan and, in the
case of a Committee, the specific duties delegated by the Board to such Committee,
and subject to the approval of any relevant authorities, the Administrator shall have
the authority in its discretion:






	 	i.)	 	to determine Fair Market Value;
	 
	 	ii.)	 	to select the Associates to whom RSU (ADS) may from
time to time be granted hereunder;
	 
	 	iii.)	 	to determine the number of ADSs to be covered by
each such RSU (ADS) granted hereunder;
	 
	 	iv.)	 	to approve forms of agreement for use under the
Plan;
	 
	 	v.)	 	to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any RSU (ADS) granted
hereunder including the price per RSU (ADS) to be paid by the Associate;
	 
	 	vi.)	 	to determine whether and under what circumstances
an RSU (ADS) may be settled in cash under subsection 9(h) instead of ADSs;
	 
	 	vii.)	 	to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations
relating to sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;
	 
	 	viii.)	 	to construe and interpret the terms of the Plan and RSU (ADSs) granted
pursuant to the Plan.
	 
	 	ix.)	 	to make all other determinations deemed necessary
or advisable for administering the Plan including, determination of the
number of other RSUs / stock options in substitution of these RSUs(ADS),
subject to all applicable laws.
	 
	 	x.)	 	To allow Associates to satisfy withholding tax
obligations by electing to have the Company withhold from the ADSs [or
cash] to be issued upon exercise or vesting of an award that number of
ADSs [or cash] with a Fair Market Value equal to the amount 




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	 	 	 	required to
be withheld. Any elections to have ADSs or cash withheld for this purpose
will be made in a form determined by the Administrator.






	 	 	(d)  Effect of Administrator’s Decision. All decisions, determinations and
interpretations of the Administrator shall be final and binding on all RSU holders.






	5.	 	Eligibility:






	 	(a)	 	RSU (ADS)s may be granted to Associates.
	 
	 	(b)	 	Each RSU (ADS) may be designated in the RSU (ADS) Agreement as
either an Incentive RSU (ADS) or a Non-statutory RSU (ADS).
	 
	 	(c)	 	Neither the Plan nor any RSU (ADS) shall confer upon any RSU
holder any right with respect to continuing the RSU holder’s relationship as an
Associate with SATYAM, nor shall they interfere in any way with his or her right
or SATYAM’s right to terminate such relationship at any time, with or without
cause.






	6.	 	Term of Plan: The Plan shall become effective upon its adoption by the
Compensation Committee of Directors. It shall continue in effect until terminated
under Section 13 of the Plan.
	 
	7.	 	Term of RSU (ADS): The term of each RSU (ADS) shall be stated in the
RSU (ADS) Agreement; provided, however, that the term shall be not more than 5 years
from the date of vesting thereof.
	 
	8.	 	RSU (ADSs), Exercise Price and Consideration:






	 	(a)	 	Subject to the terms and conditions of the Plan, RSUs(ADS) may
be granted to Associates at any time and from time to time, as will be
determined by the Administrator in its sole discretion. The Administrator will
have complete discretion in determining the number of Restricted Stock Units
granted to each Associate.
	 
	 	(b)	 	The Administrator will establish the vesting criteria in its
discretion subject to the applicable laws. The vesting schedule applicable to
each grant shall be set forth in the RSU Agreement embodying such grant.
	 
	 	(c)	 	The per ADS exercise price for the ADSs to be issued upon exercise of an RSU
(ADS) shall not be less than the face value of the share.
	 
	 	(d)	 	The consideration to be paid for the ADSs to be issued upon
exercise of an RSU (ADS), including the method of payment, shall be determined
by the Administrator at the time of grant. The method of payment of
consideration may be by way of (i)
check, (ii) demand draft (iii) wire/electronic transfer (iv) consideration
received by SATYAM under a cashless exercise program implemented by SATYAM in
connection with the Plan or (v) any combination of the foregoing methods of
payment.






	9.	 	Exercise of RSU (ADS):






	 	(a)	 	Procedure for Exercise; Rights as a Shareholder: Any RSU (ADS)
granted hereunder shall be exercisable according to the terms hereof at such
times and under such conditions as determined by the Administrator and set forth
in the RSU (ADS) Agreement. An RSU (ADS) shall not be exercised for a fraction of
an ADS.





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	 	 	 	An RSU (ADS) shall be deemed exercised when SATYAM receives: (i) written or
electronic notice of exercise (in accordance with the RSU (ADS) Agreement) from the
person entitled to exercise the RSU (ADS), and (ii) full payment for the ADSs with
respect to which the RSU (ADS) is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and permitted
by the RSU (ADS) Agreement and the ASOP — RSUs(ADS) . ADSs issued upon exercise of
an RSU (ADS) shall be issued in the name of the RSU holder until the ADSs are
issued (as evidenced by the appropriate entry on the books of SATYAM or of a duly
authorized transfer agent of SATYAM), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the ADSs,
notwithstanding the exercise of the RSU (ADS). SATYAM shall issue (or cause to be
issued) such ADSs promptly after the RSU (ADS) is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the date of the ADSs
are issued, except as provided in Section 11 of the Plan.






	 	(b)	 	Termination of Relationship as an Associate: If an RSU holder
ceases to be an Associate, such RSU holder may exercise his or her RSU (ADS)
within such period of time as is specified in the RSU (ADS) Agreement to the
extent that the RSU (ADS) is vested on the date of termination (but in no event
later than the expiration of the term of the RSU (ADS) as set forth in the
RSU (ADS) Agreement). In the absence of a specified time in the RSU (ADS)
Agreement, the RSU (ADS) shall remain exercisable for three (3) months following
the RSU holder’s termination. If, on the date of termination, the RSU holder is
not vested as to his or her entire RSU (ADS), the Shares underlying the ADSs
covered by the unvested portion of the RSU (ADS) shall again become available for
issuance under the ASOP — RSUs(ADS) . If, after termination, the RSU holder
does not exercise his or her RSU (ADS) within the time specified by the
Administrator, the RSU (ADS) shall terminate, and the Shares underlying the ADSs
covered by such RSU (ADS) shall again become available for issuance under the
ASOP — RSUs(ADS) .
	 
	 	(c)	 	In the event of superannuation/retirement: All the RSUs (ADS)
vested as on the date of retirement shall be exercised within 3 months from the
date of retirement and all the unvested RSUs (ADS) as on the date of retirement,
shall vest on the date of retirement or at the expiry of one year from the date
of grant whichever is later, and be available for exercise by the retired /
superannuated Associate, within 3 months thereof. In case of death of a
superannuated or retired Associate, the right of exercise of RSUs shall vest in
the nominees / legal heirs and the other terms and conditions shall remain the
same. If the RSU (ADS) is not so exercised within the time specified herein,
the RSU (ADS) shall terminate, and the ADSs covered by such RSU (ADS) shall again
become available for issuance under the Plan.
	 
	 	(d)	 	Death or Disability of RSU holder: If an RSU holder dies while an Associate,
or ceases to be an Associate as a result of the RSU holder’s disability, the
vesting and exercisability of the RSU (ADS) shall accelerate in full and the
RSU (ADS) may be exercised within such period of time as is specified in the
RSU (ADS) Agreement (but in no event later than the expiration of the term of such RSU (ADS) as
set forth in the RSU (ADS) Agreement) by the RSU holder or RSU holder’s estate or
by a person who acquires the right to exercise the RSU (ADS) by bequest or
inheritance. In the absence of a specified time in the RSU (ADS) Agreement, the
RSU (ADS) shall remain exercisable for twelve (12) months following the RSU
holder’s termination. If the RSU (ADS) is not so exercised within the time
specified herein, the RSU (ADS) shall terminate, and the ADSs covered by such
RSU (ADS) shall again become available for issuance under the
ASOP — RSU (ADS).
	 
	 	(e)	 	In the event of abandonment of service (absconding) by an
associate without the Company’s consent, all RSUs(ADS) including those, which are
vested but were not exercised at the time of abandonment of service shall stand
terminated with immediate effect.





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	 	 	 	The date of abandonment of an associate shall
be decided by the Company at its sole discretion which, decision shall be
binding on all concerned. At a later date, if the Company accepts resignation
by an Associate who had previously absconded from / abandoned the Company’s
service, any previous decision to terminate all vested and unvested
RSUs(ADS) of
such Associate as a consequence will remain unaffected and not confer any rights
under the ASOP — RSUs(ADS).






	 	(f)	 	In the event of Misconduct or breach of the policies of the company or
the terms of employment by the associate, during the term of his/her employment
and thereafter for a period of one year, the Advisory Board is authorized for
appropriate decision from time to time.
	 
	 	(g)	 	Transfer to subsidiaries: In the case of transfer of Associates to
subsidiaries, the vesting and exercise of RSU (ADSs) shall continue and all
other terms and conditions of this Plan shall remain the same.
	 
	 	(h)	 	Buyout Provisions: The Administrator may at any time offer to buy out for a
payment in cash or Shares, an RSU (ADS) previously granted, based on such terms
and conditions as the Administrator shall establish and communicate to the RSU
holder at the time that such offer is made.






	10.	 	Non-Transferability of RSUs(ADS): The RSUs(ADS) may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution and may be exercised, during the lifetime of the
RSU holder, only by the RSU holder.
	 
	11.	 	Adjustments upon Changes in Capitalization, Merger or Asset Sale:






	 	 	(a)  Changes in Capitalization. Subject to any required action by the shareholders of
SATYAM, the number of ADSs covered by each outstanding RSU (ADS), and the number of
ADSs which have been authorized for issuance under the Plan but as to which no
RSU (ADS)s have yet been granted or which have been returned to
the ASOP — RSUs(ADS)
upon cancellation or expiration of an RSU (ADS), as well as the price per ADS covered
by each such outstanding RSU (ADS), shall be proportionately adjusted for any increase
or decrease in the number of issued ADSs resulting from a stock split, reverse stock
split, Share-to-ADS ratio change, stock dividend, combination or reclassification of
the Shares, or any other increase or decrease in the number of issued Shares effected
without receipt of consideration by SATYAM. The conversion of any convertible
securities of SATYAM shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by SATYAM of shares of stock of any class, or securities
convertible into ADSs of stock of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of the ADSs subject
to an RSU (ADS).
	 
	 	 	(b)  Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of SATYAM, the Administrator shall notify each RSU holder as soon as
practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an RSU holder to have the right to
exercise his or her RSU (ADS) until fifteen (15) days prior to such transaction as to
all of the Optioned Stock covered thereby, including ADSs as to which the RSU (ADS)
would not otherwise be exercisable. In addition, the Administrator may provide that
any Company repurchase option applicable to any ADSs purchased upon exercise of an
RSU (ADS) shall lapse as to all such ADSs, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the extent it
has not previously vested, an RSU (ADS) will terminate immediately prior to the
consummation of such proposed action.





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	 	 	(c)  Merger or Asset Sale. In the event of a merger of SATYAM with or into another
corporation, or the sale of substantially all of the assets of SATYAM, each
outstanding RSU (ADS) shall be assumed or an equivalent RSU (ADS) substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
RSU (ADS), the RSU holder shall fully vest in and have the right to exercise the
RSU (ADS) as to all of the Optioned Stock, including ADSs as to which it would not
otherwise be vested or exercisable. If an RSU (ADS) becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or sale of
assets, the Administrator shall notify the RSU holder in writing or electronically
that the RSU (ADS) shall be fully exercisable for a period of fifteen (15) days from
the date of such notice, and the RSU (ADS) shall terminate upon the expiration of such
period. For the purposes of this paragraph, the RSU (ADS) shall be considered assumed
if, following the merger or sale of assets, the RSU (ADS) confers the right to
purchase or receive, for each ADS subject RSU (ADS) immediately prior to the merger
or sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of ADSs for each ADS
held on the effective date of the transaction (and if the holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding ADSs); provided, however, that if such consideration received in the merger or sale of assets is not solely equity shares
(or their equivalent) of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the RSU (ADS), for each ADS subject to the RSU (ADS),
to be solely equity shares (or their equivalent) of the successor corporation or its
Parent equal in fair market value to the per ADS consideration received by holders of
ADS in the merger or sale of assets.






	12.	 	Time of Granting RSU (ADS): The date of grant of an RSU (ADS) shall, for
all purposes, be the date on which the Administrator makes the determination
granting such RSU (ADS), or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Associate to whom an RSU (ADS) is
so granted within a reasonable time after the date of such grant.
	 
	13.	 	Amendment and Termination of the Plan:
	 
	 	 	(a)  Amendment and Termination. The Compensation Committee of Directors may at any
time amend, alter, suspend or terminate the Plan.
	 
	 	 	(b)  Shareholder Approval. The Board shall obtain shareholder approval of any
amendment of the Plan to the extent necessary and desirable to comply with Applicable
Laws.
	 
	 	 	(c)  Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any RSU holder, unless mutually
agreed otherwise between the RSU holder and the Administrator, which agreement must
be in writing and signed by the RSU holder and SATYAM. Termination of the Plan shall
not affect the Administrator’s ability to exercise the powers granted to it hereunder
with respect to RSU (ADSs) granted under the Plan prior to the date of such
termination.






	14.	 	Conditions Upon Issuance of ADSs:






	 	a)	 	Legal Compliance. ADSs shall not be issued pursuant to the
exercise of an RSU (ADS) unless the exercise of such RSU (ADS) and the issuance
and delivery of such ADSs shall comply with Applicable Laws and can be
further subject to the approval of counsel for SATYAM with respect to such
compliance.
	 
	 	b)	 	Investment Representations. As a condition to the exercise
of an RSU (ADS), the Administrator may require the person exercising such
RSU (ADS) to represent and warrant at the time of any such exercise that the
ADSs are being purchased only for investment and without any present
intention to sell or distribute such ADSs if, in the opinion of counsel for
SATYAM, such a representation is required.










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	15.	 	Inability to Obtain Authority: The inability of SATYAM to obtain
authority from any regulatory body having jurisdiction, which authority is deemed by
SATYAM’s counsel to be necessary to the lawful issuance and sale of any ADSs
hereunder, shall relieve SATYAM of any liability in respect of the failure to issue
or sell such Shares as to which such requisite authority shall not have been
obtained.
	 
	16.	 	Reservation of Shares: SATYAM, during the term of this
ASOP — RSUs(ADS) , shall
at all times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the ASOP — RSUs(ADS).






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