“Board of Directors” means the Board of Directors of Sify.“Compensation Committee” means the Compensation Committee of the Boardof Directors which consists of not less than three members of theBoard of Directors who are non executive Directors and which currentlyconsists of four members of the Board of Directors.“Director” means a member of the Board of Directors.“Equity Shares” means the Equity Shares of Sify. Equity Shares arenot currently listed in India or anywhere else.“NASDAQ” means the National Association of Securities DealersAutomated Quotation System.“Option” means the right to purchase ADRs or Equity Shares uponexercise of an option granted pursuant to this ASOP 2007.“Option Agreement” means the agreement between an Associate and theCompany, which sets forth the terms and conditions of the Option.“Promoter” means (a) any person or person(s) who is in overall controlof the Company, (b) any person or person(s) who are instrumental inthe formation of the Company or the programme pursuant to which anyequity interest in the Company was offered to the Company or (c) theperson or person(s) named in any offering document as promoter(s),provided, however, that a Director or officer of the Company will notbe deemed to be a Promoter if they are acting as such only in theirprofessional capacity with the Company.“Principal Officers” mean senior executives of Sify, including,without limitation, the Chief Executive Officer, the Chief OperatingOfficer and the Chief Financial Officer of Sify.“Promoter Group” means: (a) an immediate relative of a Promoter (i.e.,spouse of a Promoter or any parent, brother, sister or child of theperson or of the spouse); or (b) persons whose shareholdings or otherownership is aggregated for the purpose of any regulatory filing,including, without limitation, any securities offering document.“Subsidiary” means any company in which Sify owns more that 50% of theissued shares of such company or more than 50% of the voting rights inthe board governing such company.**3.0**   **Administration:**3.1 Shareholders of Sify have approved the allocation of 1,400,000 shares to be made availablefor ASOPs on September 24, 2007. Shareholders have also empowered the Board of Directors toformulate ASOPs from time to time to grant stock options and when exercised issue ADRs orEquity Shares, as the case may be. Shareholders have also recognized that these stock optionswould be available to all Associates including Principal Officers and Directors.
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3.2 The Board of Directors have constituted the Compensation Committee to formulate ASOPs,formulate policies for administration of the plans, and actually administer the plan bygranting options, recognize exercises, issue ADRs and Equity Shares on exercise, collectexercise price and where appropriate facilitate sale. 3.3 The Compensation Committee administers the ASOPs of Sify. ASOP 2007 will also be administeredby the Compensation Committee. 3.4 In all issues to be decided by the Company relating to ASOP, the decision by the CompensationCommittee represents the decision of the Company and is final.**4.0**   **ADRs / Equity Shares:**4.1 ASOP 2007 aims to grant Options to buy either of the following to Associates: 4.1.1 ADRs; or  4.1.2 Equity Shares.4.2 The Option Agreement shall explicitly state whether the right to purchase ADRs or EquityShares is being granted pursuant to such Option. In the absence of such a clarification in anOption, ADRs shall be issued on exercise of such Option. In the event of a conflict between anOption Agreement and this ASOP 2007, this ASOP 2007 shall control, except as otherwiseprovided herein. The Option Agreement shall include such terms and agreements and relateddocuments as may be determined and approved by the Board of Directors from time to time. 4.3 The Compensation Committee has the power, subject to compliance with Applicable Law, to grantOptions for a quantity of ADRs / Equity Shares not exceeding the unused quantity available inthe pool for granting of options (as approved by and added to by members of Sify’sshareholders in accordance with Applicable Law). 4.4 If the outstanding ADRs or Equity Shares of Sify are increased, decreased, changed into orexchanged for a different number or kind of securities of Sify through reorganization,recapitalization, reclassification, change in the ratio between the ADRs and the EquityShares, share dividend, share split, reverse share split or other similar transaction, thenthe Compensation Committee, in its sole discretion, shall make an appropriate and proportionaladjustment to the exercise price and/or number of ADRs or Equity Shares. 4.5 Unless otherwise determined by the Compensation Committee and specified in the applicableOption Agreement or another written agreement between Company and the Associate, in the eventof (a) the dissolution or liquidation of Company, (b) a reorganization or business combinationor consolidation of Company with one or more other entities as a result of which fifty percent(50%) or more of Company’s voting equity interests is transferred to another entity, or (c) asale of substantially all the property or more than fifty percent (50%) of the thenoutstanding Shares of Company to different holders in a single transaction or series ofrelated transactions, then the ASOP 2007 shall terminate and any unvested Options grantedhereunder shall terminate, with such termination being effective immediately prior to the dateof such merger, reorganization, sale or other event (so that such terminating Options do notparticipate in or with respect to such merger,reorganization, sale or other event).Notwithstanding the foregoing, the CompensationCommittee may, in its sole discretion, provide, inan Option Agreement or in a writing in connectionwith, or in contemplation of, such transaction forany, all or none of the following alternatives(separately or in combination): (a) for theunvested Options, or any of them, to becomeimmediately vested in part or in full, or tocontinue to vest in the future upon the same ordifferent conditions; (b) for the assumption by asuccessor entity of such unvested Options, (c) whererelevant, for the substitution by a successor entityfor such unvested Options of new shares covering theequity interests of the successor entity, withappropriate adjustments as to the number and kind ofequity interests and prices; or (d) for thecontinuance of the ASOP 2007 by such successorentity in which event the ASOP 2007 and the Optionstheretofore granted under it shall continue in themanner and under the terms so provided.
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**5.0**   **Eligibility to participate:**5.1 Options shall be granted under ASOP 2007 only to Associates. However, an employee who is aPromoter or belongs to a Promoter Group or a Director who either by himself or through hisrelative or through any corporate body directly or indirectly holds more than 10% of theoutstanding equity of Sify shall not be eligible. 5.2 The Compensation Committee shall, from time to time, and at the Compensation Committee’sdiscretion, select from among the Associates a list of Associates for grant of Option(s). TheCompensation Committee shall decide on the selection criteria which shall include, among otherthings, the performance track record, and performance potential of the Associates. TheCompensation Committee is empowered to include Associates on any other criteria and is alsoempowered to not include any Associate without stating any reason. The decision by theCompensation Committee on the choice of Associates, if any, who shall be granted Options isfinal.**6.0**   **Grant of Options:**6.1 The Compensation Committee shall decide on whether the Option is for ADRs or Equity Shares,the number of ADRs or Equity Shares issuable upon exercise of the Option, the exercise pricepayable, the vesting schedule and other terms and conditions of the Option. 6.2 The Compensation Committee shall issue to the selected Associates Option Agreements givingthem the right to buy ADRs (or if so specified, Equity Shares), which Option Agreements willspecifying the quantity of ADRs or Equity Shares, as applicable, issuable upon exercise of theOption and the exercise price, the vesting schedule and other terms and conditions. A copy ofthe ASOP 2007 shall be attached to the Option Agreement. The Option Agreement should bear thesequential number of the Option, the name of the Associate and the reference of theCompensation Committee meeting at which the Option is being granted. The CompensationCommittee should collect an Option fee of Re.1 per ADR (or share), which shall be adjustedagainst the exercise price payable or refunded to Associates if the Option expiresunexercised.
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**7.0**   **Exercise Price:**7.1 Exercise price refers to the price at which the Associate may buy the ADR (or Equity Share).The currency by which exercise price is payable is normally Rupees unless otherwise sospecified in the Option Agreement. Exercise price is payable to the Company by a cheque madepayable to Sify. 7.2 The Compensation Committee shall fix the exercise price for ADR options at a discount of notmore than 10% to the fair market value on the date of grant and for the Equity Share Option onthe basis of a valuation to be done by an independent professional at the time of grant. Ifthe ADRs are traded on NASDAQ or other automated dealer quotation system, or are listed on asecurities exchange, fair market value shall be the last sale price for the ADR, as of thegrant date, on such securities exchange or automated dealer quotation system as reported bysuch source as the Compensation Committee may select. If the ADRS are not traded on asecurities exchange or automated dealer quotation system then the fair market value shall beas determined by the Compensation Committee pursuant to a reasonable method adopted in goodfaith for such purpose.**8.0**   **Vesting Schedule:**8.1 An Option may be exercised (converted into an ADR or Equity Share) only after such Option hasvested. 8.2 The Options granted shall vest as below: (a) one sixth of the Option   at the end of one year from the date of grant and (b) the remaining five sixths of theOption over the second, third and fourth year from the date of grant in twelve equalquarterly installments. 8.3 The Option shall vest fully on the occurrence of permanent total disability or the death ofthe Associate. In the event of happening of any one of the above events, the options shall beexercised by the nominee of the disabled or the deceased as the case may be, registered withthe company.**9.0**   **Expiry:**9.1 Options issued to Associates can be exercised, in whole or in part, only after they vest andprior to the expiration of the Option. 9.2 Options expire at the end of the 60 months from the date of grant, or one month after theAssociate ceases to be in the employment of Sify or its Subsidiaries, whichever is earlier. 9.3 If an Option vested earlier than envisaged due to death or permanent total disability of theAssociate, the Option shall expire within three months after such a vesting. The CompensationCommittee is empowered to extend the expiry date by not more than six months in the case ofdeath or permanent total disability of the Associate. 9.4 Associates who do not wish to accept Option grants shall notify Sify in writing. Any optionrecommended by the Compensation Committee to them would not be issued to them and would bevoid and without effect.
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9.5 Associates who do not wish to continue participating in the ASOP after the Option is receivedshall notify the Company in writing. The options granted such Associate would forfeit afterthe letter is received by Sify. Sify would repay the option fee of Re.1 per ADR if such a feehad been collected earlier from such Associate.**10.0 Exercise of Stock Option and Issue of ADRs / Equity Shares:**10.1 Associates may exercise vested Options any time prior to the expiration of such Option ifpermitted by Applicable Law and subject to the terms and conditions of the Option Agreementand ASOP 2007. Without limiting the foregoing, Associates may sell the ADRs or Equity Sharesso issued under the Option only during the period when insider trading is permitted under the“Insider trading policy” of Sify. However, this restriction is not applicable to theex-employees, nominees of the disabled or the deceased as defined in clause 8.3. 10.2 The Insider trading policy of Sify shall be as determined by the Board of Directors from timeto time and as administered by the Chief Financial Officer of Sify from time to time. Unlessthere are specific price sensitive information within the Company, insider trading istypically permitted during the period commencing from “two [trading] days after the pressrelease announcing quarterly results” and ending with “the fifteenth day of the third month ofeach quarter”. 10.3 In the event the Associate shall not be permitted by Applicable Law to hold the ADRs orEquity Shares, as applicable, issuable upon exercise of the Option or is required to sell suchADR or Equity Share within a reasonable or specified time, then exercise of the Option itselfwill be permitted only during the period when insider trading is permitted. 10.4 Associates wishing to exercise their Option should tender to Sify a copy of the OptionAgreement and a cheque made payable to Sify for the exercise price indicating the brokerageaccount to which ADRs or Equity Shares should be credited in addition to any other documents. 10.5 Subject to the terms of ASOP 2007, the Option Agreement and Applicable Law, Associates mayexercise part of the Option that has vested and carry forward the remainder until the Optionsexpire and exercise such carried forward quantity before expiry subject at all times the termsof ASOP 2007, the Option and Applicable Law. 10.6 Sify may, at Sify’s sole discretion, facilitate the sale of the ADRs and Equity Shares issuedto Associates. 10.7 All taxes that apply to the exercise, sale or realization of proceeds from ADRs and EquityShares accrue to the Associate and shall be the sole responsibility and obligation of theAssociate. The company is also empowered to recover from the Associates any tax that may belevied by the Government from time to time in connection with the ASOP and is payable by thecompany.**11.0 Transfer, Mortgage:**Options cannot be transferred, pledged, mortgaged, hypothecated, or disposed of in any manner otherthan by will or the laws of descent and distribution.
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**12.0 Others:**12.1 This Plan shall not form part of any contract of employment between SIFY and the associate.The rights and obligations of any individual under any contract of employment shall not beaffected by his or her participation in this ASOP 2007 or any right which he or she may haveto participate in it. 12.2 Nothing in this ASOP 2007 or any other ASOP shall afford any person any rights with respectto employment (including, without limitation, continuation of employment) by the Company norshall it interfere with or in any way effect the Company’s right to terminate employment atany time, with or without cause. The Options, if any, granted under this ASOP 2007 or anyother ASOP, shall not form a part of the terms of employment of an Associate or entitle him orher to take into account the Options granted hereunder in any claim for compensation ordamages in consequence of the termination of employment of such Associate. 12.3 This Plan shall not confer on any associate any legal or equitable right against Sify eitherdirectly or indirectly or give rise to any cause of action in law or equity against Sify. 12.4 This Plan is subject to all applicable laws, rules, regulations, guidelines and to suchapprovals from any governmental agencies as may be required. In case of any contradictionbetween the provisions of this Plan and any provisions, rules, regulations, guidelines issuedby any governmental agencies, the provisions of law shall override the provisions of thisPlan. 12.5 The associates who are granted warrants ADS / Equity under the Plan shall comply with suchrequirements of law as may be necessary. 12.6 Sify does not guarantee any return on the equity investment made by Associates as part of theASOPs. Any investment loss for any reason including, without limitation, due to fluctuationsin the market price of the ADRs and/or Equity Shares including the shortfall in theexpectations or projections and the risks associated with the investment are that of theAssociate alone. 12.7 Unless and until an Option has been exercised and the ADRs or Equity Shares, as the case maybe, have been issued to the Associate, such Associate shall not have any rights whatsoever asa shareholder including rights for receipt of dividends and/or voting with respect to suchOption. 12.8 ADRs or Equity Shares, as applicable, will not be issued pursuant to an Option unless theexercise of such Option and the issuance and delivery of such ADRs or Equity Shares, asapplicable, thereunder will comply with Applicable Laws and such issuance and delivery will befurther subject to the approval of counsel for Sify with respect to such compliance. 12.9 The inability of Sify to obtain authority from any regulatory body having jurisdiction, whichauthority is deemed by Sify’s counsel to be necessary to the lawful issuance and sale of anyADRs or Equity Shares hereunder, will relieve Sify of any liability in respect of the failureto issue or sell such ADRs or Equity Shares as to which such requisite authority will not havebeen obtained. 12.10 The Plan and all Options granted and actions taken thereunder shall be governed by andconstrued in accordance with the laws of India without giving effect to the conflicts of lawrules thereof. 12.11 The Compensation Committee shall have absolute discretion and power in formulating the rulesand regulations of the ASOP 2007 and also to amend the ASOP 2007 from time to time as they maydeem fit and expedient.
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