Document:

Ex-4.2 Associate Stock Option Plan B

 

Exhibit 4.2

SATYAM COMPUTER SERVICES LIMITED

SECUNDERABAD 500 003

ASSOCIATE STOCK OPTION PLAN B

	1.	 	OBJECTIVE

	 	i.	 	In its continuing efforts to create participative environment
contributing to the growth of associates as part of the corporate growth plans,
SATYAM COMPUTER SERVICES LIMITED (SATYAM) formulated new Associate Stock Option
Plan “B”, (ASOP ‘B’), pursuant to the enabling authority given by the members of
SATYAM in its General Meeting held on 28th May, 1999.
	 
	 	ii.	 	The plan is aimed at the following:

	 	§	 	Rewarding the associates for their performance and contribution to the
success and growth of SATYAM.
	 
	 	§	 	Providing them with a good and attractive motivational tool to improve
their performance.
	 
	 	§	 	Providing an opportunity for the professional partners to become
financial partners in the Equity of SATYAM.
	 
	 	§	 	Retaining the talent and services of the associates who have
contributed to the success of SATYAM.
	 
	 	§	 	Attracting the right talent for right roles

	 	iii.	 	This plan will be effective from such a date as decided by the Board of Directors.

	2.	 	DEFINITIONS

	 	 	 	In this plan, unless the context otherwise requires
	 
	 	i.	 	“Associate” means Employee of SATYAM on full time, in the regular
service and includes full time employees of subsidiary companies or Parent Company
of SATYAM including a director of the Company, whether a wholetime director or
not.
	 
	 	ii.	 	“Board of Directors” means the “Board of Directors of SATYAM”
	 
	 	iii.	 	“Compensation Committee” means a committee of directors constituted
and authorised by the “Board of Directors” of SATYAM consisting of a majority of
independent directors
	 
	 	iv.	 	“Eligible Associate” means an Employee who fulfills the criteria
fixed for eligibility to the benefits of the Plan as per the Appraisal process of
SATYAM
	 
	 	 	 	However, that Sri B Ramalinga Raju and Sri B Rama Raju who are the promoter
directors of SATYAM will not be eligible for the benefits of the Plan.
	 
	 	v.	 	“Exercise” means the act of making of an application by the Associate
to SATYAM for issue of shares against option vested in him in pursuance of the
ASOP’B”.
	 
	 	vi.	 	“Exercise Period” means the period after vesting within which the
employee should exercise his right to apply for shares against the option vested
in him in pursuance of ASOP ‘B’. Such period shall be after 12 months from the
date of Grant of Options to the Associate but within 60 months from the date of
Vesting of Options in the Associate provided the Contract of Service between the
Associate and the Company has not ceased. Options not exercised by Associates
before the expiry of the Exercise period will lapse and become void for all
purposes.

 

 

	 	vii.	 	“Exercise Price” means the Exercise Price determined by the
Compensation Committee from time to time in accordance with the notifications,
guidelines and
clarifications issued by SEBI or any other statutory authority from time to time as
applicable, which shall be paid by the Associate at the time of Exercise.
	 
	 	viii.	 	“Grant” means the act of issue of option to Associates under
“ASOP’B’”.
	 
	 	ix.	 	“Fair Market Value” / “Market Price” of a share on a date means the
closing price of the shares on that date on the stock exchange on which the shares
of SATYAM are listed. Where the shares are quoted on more than one stock exchange,
then the stock exchange where there is highest trading volume on that date shall
be considered. In case the share price is not quoted on any given date, the share
price on the next trading day on the same parameters would be the Market price.
	 
	 	x.	 	“Option” means a right but not an obligation granted to an Associate
in pursuance of ASOP’B’ to apply for shares of the Company at a pre-determined
price on fulfillment of certain conditions.
	 
	 	xi.	 	“Option Agreement” means a written or typed or printed or electronic
agreement between SATYAM and the Optionee giving the terms and conditions of
ASOP’B’
	 
	 	xii.	 	“Optionee” means the holder of an outstanding Option granted pursuant
to ASOP’B’.
	 
	 	xiii.	 	“Plan” means “Associate Stock Option Plan ‘B’” for Associates.
	 
	 	xiv.	 	“SATYAM” means “Satyam Computer Services Limited”.
	 
	 	xv.	 	“Share” means equity share of SATYAM
	 
	 	xvi.	 	“Vesting” means the process by which the Associate is given the right
to apply for shares of SATYAM against the option granted to him in pursuance of
ASOP’B’.
	 
	 	xvii.	 	“Vesting period” means the period during which the vesting of the
option granted to the Associate in pursuance of ASOP’B’ takes place.

	3.	 	COMPENSATION COMMITTEE

	 	i.	 	A Compensation Committee shall be constituted by the Board of
Directors of SATYAM consisting of not more than 3 directors for administration and
superintendent of the ASOP’B’.
	 
	 	ii.	 	The majority of the members of the Compensation Committee formed by
the Board shall consist of independent directors of the Company.

	4.	 	FUNCTIONS OF THE COMPENSATION COMMITTEE

	 	i.	 	The Compensation Committee shall formulate the detailed terms and
conditions of the ASOP’B’ including:

	 	§	 	the Exercise Price from time to time
	 
	 	§	 	The date of grant for each or a group of cases
	 
	 	§	 	Selection of the Associates for the benefits of the ASOP’B’ among the
eligible Associates from time to time
	 
	 	§	 	Finalising the quantum of options to be granted to each Associate for
each such option
	 
	 	§	 	Determining the vesting and Exercise periods
	 
	 	§	 	Procedure for Exercise after vesting within Exercise Period
	 
	 	§	 	Approval of forms for use under the ASOP’B’
	 
	 	§	 	Prescribe, amend and rescind rules and regulations of the ASOP’B’
	 
	 	§	 	Clarify, interpret and advise on the terms of the ASOP’B’
	 
	 	§	 	Conditions under which Option vested in Associate may lapse in case of
cessation of service for misconduct, termination,

 

 

	 	 	 	resignation or
otherwise, non-exercise of option within the exercise period etc.
	 
	 	§	 	The procedure for making a fair and reasonable adjustment to the number
of options and to the Exercise Price in case of Rights Issue, Bonus Issues
and other corporate actions such as Consolidation or Split.
	 
	 	§	 	The grant, vest and exercise of option in case of employees who are on
long leave
	 
	 	§	 	The procedure for cashless exercise of options

Notwithstanding anything contained above, the Compensation Committee shall have
power to alter, waive, modify, extend or change the vesting and/or Exercise period
at its sole discretion subject to 9.1 clause dealing with minimum vesting period.

	 	ii.	 	The Compensation Committee can delegate its function(s) to ASOP
Advisory Board which shall discharge those function(s) guided by the principles of
fairness, impartiality and natural justice and make its recommendations to
Compensation Committee.
	 
	 	iii.	 	The decisions, determinations, interpretations of the Compensation
Committee shall be final and binding on all Associates and are not subject to
review or appeal at the request/demand of Associates.

	5.	 	QUANTUM OF THE ASOP’B’

	 	i.	 	The maximum number of shares which will be subject to Options and
granted under ASOP’B” are 26,00,000 shares of face value of Rs.10 each. The shares
may be authorised but unissued or reacquired.
	 
	 	ii.	 	The Board will make allotment of shares at its meetings duly
convened, at periodic intervals, after the optionee exercises the conversion
option before the end of exercise period.
	 
	 	iii.	 	The quantum and the exercise price of the ASOP’B’ can be suitably
adjusted based on fair and reasonable grounds in case of rights, bonus or any
other corporate actions including consolidation or split.
	 
	 	iv.	 	In case of an Option expiring or becoming unexercisable for reasons
of non-fulfillment of conditions of ASOP’B’ without the right of purchase being
exercised, such options shall be available for future grant or sale under ASOP’B’
unless the plan has been terminated. The shares that are already issued on
exercise of right can not be returned to the ASOP’B’ and shall not be available
for future grant or sale.

	6.	 	FUNCTIONS OF ASOP ADVISORY BOARD

	 	i.	 	The Advisory Board will study and assess the eligible Associates,
based on the guidelines for assessment formulated as part of the plan from time to
time by the Compensation Committee and make recommendations of identified
Associates to the Compensation Committee.
	 
	 	ii.	 	The Advisory Board shall have the right to exclude any one from the
list of eligible Associates, from being identified for the benefits of ASOP ‘B’.
	 
	 	iii.	 	The recommendations of the ASOP Advisory Board shall be forwarded to
the Compensation Committee for its consideration and final decision.
	 
	 	iv.	 	The ASOP Advisory Board can exercise any other functions as and when
they are delegated to it by the Compensation Committee.

	7.	 	BASIS OF SELECTION BY ADVISORY BOARD

	 	i.	 	Basis of selection out of eligible Associates shall be as per the
guidelines framed and approved by the Compensation Committee from time to time.
	 
	 	ii.	 	The factors to be considered for assessment of Associates for selection shall be:

 

 

	 	§	 	Performance
	 
	 	§	 	Organisational Development
	 
	 	§	 	Customer Satisfaction

	 	iii.	 	The Compensation Committee shall have power to add or delete the
factors from time to time at its sole discretion.
	 
	 	iv.	 	The weightage to the factors mentioned in 7.2 and any addition or
deletion to the list of factors shall be decided by the Compensation Committee
initially and shall be reviewed periodically for implementation by the Advisory
Board.
	 
	 	v.	 	The Compensation committee shall also determine the minimum scoring
that an Associate in each category has to score to be considered for the benefits
of the scheme.
	 
	 	vi.	 	The Compensation Committee reserves the right to factor different
parameters and different weightages for different categories of the Associates.
	 
	 	vii.	 	The Advisory Board shall recommend the quantum of eligibility to
            shares for different categories of Associates on the basis of identified
parameters and in terms of the scoring of the Associates in the assessment.
	 
	 	viii.	 	The Advisory Board can also recommend Associates for awards for
exceptional performance and/or contribution for the organisational growth for
consideration by the Compensation committee.
	 
	 	ix.	 	The Advisory Board can also recommend new Associates joining Satyam
to the benefits of the scheme.
	 
	 	x.	 	The ASOP Advisory Board shall seek the guidance and clarifications if
any required, from the Compensation Committee in implementing the assessment
procedure.

	8.	 	GRANT OF OPTIONS

	 	i.	 	The Compensation Committee may, on such dates it shall determine,
grant to such Eligible Associates as it may, at its absolute discretion select,
such Options of SATYAM on such terms and conditions and for the consideration as
it may decide. The compensation Committee may consider the recommendations of the
Advisory Board, while it reserves its right to reject the recommendations of the
Advisory Board in part or in full.
	 
	 	ii.	 	The date of Grant of an Option, shall, for all purposes, be the date
on which the Compensation Committee makes the determinations of granting such
Option, or such other date as is determined by the Compensation Committee.
Intimation of determination shall be given to each Associate to whom an Option is
so granted within a reasonable time after the date of such grant.
	 
	 	iii.	 	The Intimation of Stock Options Grant shall indicate the Options
granted, name of the Associate who was granted the Options, Exercise price per
share, Vesting Schedule and the Exercise Period, along with main terms and
conditions of the Grant.
	 
	 	iv.	 	The intimation of Stock Options Grant shall also include the term of
each Option, subject to the condition that the term shall be no more than five (5)
years from the date of vesting thereof.
	 
	 	v.	 	No Associate shall be granted Options to purchase more than or
equaling 1% of the issued capital of the company (excluding outstanding warrants
and conversions), at the time of grant of option, during any one year.
	 
	 	vi.	 	The Plan shall become effective from the date of its adoption by the
Board of Directors of SATYAM. It shall continue in effect till all the

 

 

	 	 	 	Options
granted under the Plan are exercised or have been extinguished or unless the Plan
is terminated.

	9.	 	LOCK-IN PERIOD AND RIGHTS OF THE OPTION-HOLDER

	 	i.	 	There shall be a minimum period of one year between the grant of
options and vesting of option.
	 
	 	ii.	 	The vesting period and Exercise Period for different Options for
Different Associates shall be determined by the Compensation Committee
	 
	 	iii.	 	The Compensation Committee shall have the freedom to specify the
lock-in period for the shares issued pursuant to exercise of option.
	 
	 	iv.	 	The Associate shall not have right to receive any dividend or to vote
or in any manner enjoy the benefits of a shareholder in respect of option granted
to him, till shares are issued on exercise of option.

	10.	 	OPTION EXERCISE PRICE

	 	i.	 	The Exercise Price per share to be issued upon Exercise of an Option
shall be such prices as is determined by the Compensation Committee.
	 
	 	ii.	 	Such Exercise price can be different for each associate or each group
of associates at the sole discretion of the Compensation Committee.
	 
	 	iii.	 	The method and mode of payment of the Exercise Price for shares to be
issued on exercise of options will be decided by the Compensation Committee at the
time of grant. The mode of payment can be in (I) cash (ii) cheque (iii) Demand
Draft (iv) Electronic transfer of funds or (v) consideration received by the
Company under a cash less Exercise program implemented / to be implemented by the
Company in connection with the Plan or (vi) any combination of them.
	 
	 	iv.	 	The Exercise Price shall be subject to fair and reasonable adjustment
in case of rights issues, bonus issues and other corporate actions. The
Compensation Committee shall be the authority to take such decisions.

	11.	 	EXERCISE OPTION

	 	i.	 	Associates opting for Exercise can apply for conversion of Options
into shares in the form prescribed for the purpose, along with full payment for
the shares with respect to which the Option is being exercised.
	 
	 	ii.	 	Exercise of Options can not be for a fraction of a share.
	 
	 	iii.	 	Associates may at their discretion, opt for Exercise after the expiry
of vesting period, but within the Exercise Period of all or part of the Options
granted to him/her.
	 
	 	iv.	 	Associates who do not want to avail ASOP’B’, may opt out of the
scheme any time before Exercise Period and surrender the Options to SATYAM for
cancellation. Such options will be available for re-issuance under the ASOP’B’.

	12.	 	SHARES AFTER CONVERSION

	 	i.	 	After completion of the Exercise Process, shares will be issued in
the name of the Associate, after completion of the required formalities as
required by law
	 
	 	ii.	 	The shares transferred to the Associate after conversion from
warrants, shall be the absolute property of the Associate and will be held by the
Associate, subject to the lock-in period and subject to lien favouring SATYAM for
any statutory liability that may arise out of the ASOP.
	 
	 	iii.	 	As a registered shareholder, the Associate will be entitled to all
the benefits, which may accrue to him such as dividends, bonus, rights, etc.
	 
	 	iv.	 	Shares issued as bonus shares or rights shares after conversion into
shares, after lock in period, will not be subjected to any lock in period.
	 
	 	v.	 	The shares arising on conversion shall rank pari passu with all other
equity shares of SATYAM for the time being in force; from the date of allotment.

 

 

	13.	 	CONSEQUENCE OF FAILURE TO EXERCISE OPTION

	 	i.	 	The amount paid by the Associate, if any, at the time of grant of
option, may be refunded to the employee if the options are not vested due to non-
fulfillment of condition(s) relating to vesting of option as per the ASOP’B’ at
the sole discretion of the Compensation Committee.

	14.	 	NON TRANSFERABILITY OF OPTION

	 	i.	 	Option granted to an Associate shall not be transferable to any
person.
	 
	 	ii.	 	No person other than the Associate to whom the option is granted
shall be entitled to exercise the option.
	 
	 	iii.	 	Under the cashless system of exercise, SATYAM may itself fund or
permit the empanelled stock brokers to fund the payment of exercise price which
shall be adjusted against the sale proceeds of some or all the shares, subject to
the provisions of the Companies Act, 1956 as amended from time to time.
	 
	 	iv.	 	The option granted to the Associate shall not be pledged
hypothecated, mortgaged or otherwise alienated in any other manner.
	 
	 	v.	 	In the event of the Associate dying in harness while in employment,
all the options granted to him till such date shall vest in the legal heirs or
nominees of the deceased Associate on the date of death. Such vested Options shall
be exercisable within twelve (12) months from the date of death of the Associate,
but not earlier to ONE YEAR from the date of grant. Options not exercised within
such period will become invalid in the hands of the legal heirs or nominees and
shall be available for re-issuance under the Plan.
	 
	 	vi.	 	In case the Associate suffers a permanent incapacity while in
employment, all the option granted to him as on the date of permanent
incapacitation, shall vest in him on that day. Such vested Options shall be
exercisable within twelve (12) months from the date of Disability of the
Associate, but not earlier to ONE YEAR
from the date of grant.. Options not exercised within such period will become
invalid and shall be available for re-issuance under the Plan.
	 
	 	vii.	 	In the event of resignation or termination of the Associate, all
options not vested as on that day shall expire. However, the Associate shall be
entitled to retain all the vested options as on the date of such resignation,
termination. Such vested options shall be exercisable within three (3) months from
the last working day Options not exercised within such period will become invalid
and shall be available for re-issuance under the Plan.
	 
	 	viii.	 	In the event of superannuation/retirement, the vesting schedule for
the options granted during the period of employment shall continue. In case of
death of a superannuated or retired Associate, all the outstanding options as on
that date shall vest immediately in the legal heirs or nominee(s) of the deceased
and such vested options shall be exercisable within twelve (12) months from the
date of death of the superannuated or retired Associate, but not earlier to one
year from the date of grant. Options not exercised within such period become
invalid in the hands of legal heirs or nominees and shall be available for
reissuance under the plan.

	15.	 	LISTING OF SHARES

	 	i.	 	The shares allotted to Associates on conversion shall be listed on
the stock exchanges subject to the terms and conditions of this scheme

 

 

	 	 	 	and terms and conditions of the listing agreement.

	16.	 	TAX LIABILITY

	 	i.	 	Any tax liability on account of Grant of Options / Vesting / Exercise
of Options/ allotment of shares/ transfer of shares shall be that of the Associate
alone.

	17.	 	MODIFICATIONS TO THE SCHEME

	 	i.	 	The Compensation Committee reserves the right to change the terms and
conditions of the scheme, at any time, at its discretion.
	 
	 	ii.	 	Such changes in terms and conditions as per clause 18.1 can also be
due to any change in the law applicable to the scheme or any mutual agreement
between SATYAM and its Associates.

	18.	 	CONTRACT OF EMPLOYMENT

	 	i.	 	This scheme shall not form part of any contract of employment between
SATYAM and the Associate. The rights and obligations of any individual under the
contract of employment shall not be affected by his participation in this scheme
or any right, which he may have to participate in it.
	 
	 	ii.	 	Nothing in this scheme shall afford any Associate any additional
right(s) as to compensation or damages in consequence of the termination of such
office or employment for any reason.
	 
	 	iii.	 	This scheme shall not confer any Associate any legal or equitable
right against SATYAM either directly or indirectly or give rise to any cause of
action in law or equity against SATYAM.

	19.	 	GOVERNMENT REGULATIONS

	 	i.	 	This scheme is subject to all applicable laws, rules, regulations,
guidelines and to such approvals from any governmental agencies as may be
required. In case of any contradiction between the provisions of this Scheme and
any provisions, rules, regulations, guidelines issued by any governmental
agencies, the provisions of law shall override the provisions of this scheme.
	 
	 	ii.	 	The Associates who are granted warrants/ shares under the scheme
shall comply with such requirements of law as may be necessary.

	20.	 	GENERAL RISKS

	 	i.	 	SATYAM does not guarantee any return on the equity investment made by
Associates as part of the scheme. Any loss due to fluctuations in the market price
of the equity including the shortfall in the expectations or projections and the
risks associated with the investment are that of the Associate alone.Ex-4.3 Associate Stock Option Plan ADS

 

Exhibit 4.3

SATYAM COMPUTER SERVICES LIMITED

SECUNDERABAD 500 003

Associate Stock Option Plan(ADS)

2000 EQUITY INCENTIVE ASOP (ADS)

	1.	 	Purposes of the ASOP (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 ASOP (ADS), (ASOP (ADS)).

1.2 The ASOP (ADS) is aimed at the following :

	 	§	 	Rewarding the associates for their performance and contribution to the success and
growth of SATYAM.
	 
	 	§	 	Providing them with a good and attractive motivational tool to improve their
performance.
	 
	 	§	 	Providing an opportunity for the professional partners to become financial partners
in the Equity of SATYAM.
	 
	 	§	 	Retaining the talent and services of the associates who have contributed to the
success of SATYAM.
	 
	 	§	 	Attracting the right talent for right roles

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

(a) “Administrator” means the Board or any of its Committees responsible for the general
administration of the ASOP (ADS) in accordance with Section 4 hereof.

(b) “Applicable Laws” means the legal requirements relating to stock Option ASOP (ADS),
including, without limitation, the tax, securities or corporate laws of India, any stock
exchange or quotation on which the ADSs are listed or quoted, or the applicable laws of any
other country or jurisdiction where Option (ADS)s are, or will be, granted under the ASOP
(ADS).

(c) “ADR” shall mean an American Depositary Receipt evidencing ADS(s) corresponding to
Share(s).

(d) “ADS” shall mean an American Depositary Share corresponding to Share(s).

(e) “Board” means the Board of Directors of SATYAM.

(f) “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.

(g) “Committee” means a committee appointed by the Board in accordance with Section 4 hereof.

(h) “SATYAM” means Satyam Computer Services Limited, a company organized under the laws of
India.

(i) “Director” means a member of the Board.

 

 

(j) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the
Code.

(k) “Associate” means any person, including officers and Directors, employed by SATYAM or any
Parent or Subsidiary of SATYAM. An Associate shall not cease to be an Associate in the case of
(i) any leave of absence approved by SATYAM or (ii) transfers between locations of SATYAM or
between SATYAM, its Parent, any Subsidiary, or any successor. Neither service as a Director nor
payment of a director’s fee by SATYAM shall be sufficient to constitute “employment” by SATYAM.

(l) “Fair Market Value” means the value for one ADS, as reported on any established stock
exchange or market system where SATYAM’s ADSs are listed, on the day of determination.

(m) “Incentive Stock Option(ADS)” means an Option(ADS) intended to qualify as an incentive
stock Option(ADS) within the meaning of Section 422 of the Code and which is designated as an
Incentive Stock Option(ADS) by the Administrator.

(n) “Nonstatutory Stock Option(ADS)” means an Option(ADS) (or portion thereof) that is not
designated as an Incentive Stock Option(ADS) by the Administrator, or which is designated as an
Incentive Stock Option(ADS) by the Administrator but fails to qualify as an Incentive Stock
Option(ADS) within the meaning of Section 422 of the Code.

(o) “Option(ADS)” means a stock Option(ADS) granted pursuant to the ASOP (ADS).

(p) “Option(ADS) Agreement” means a written or electronic agreement between SATYAM and an
Optionee evidencing the terms and conditions of an individual Option(ADS) grant. The
Option(ADS) Agreement is subject to the terms and conditions of the ASOP (ADS).

(q) “Optioned Stock” means the ADSs subject to an Option(ADS).

(r) “Optionee” means the holder of an outstanding Option(ADS)granted under the ASOP (ADS).

(s) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

(t) “ASOP (ADS)” means this 2000 Equity Incentive ASOP (ADS).

(u) “Share” means an Equity Share of SATYAM, as adjusted in accordance with Section 11 of the
ASOP (ADS).

(v) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code.

	3.	 	Stock Subject to the ASOP (ADS). Subject to the provisions of Section 11 of the ASOP (ADS),
the maximum aggregate number of Shares which may be issued upon exercise of Option(ADS) and
sold under the ASOP (ADS) (in the form of ADSs) is [$25 million/initial ADS offering price]
Shares. The Shares may be authorized but unissued, or reacquired Shares.

If an Option(ADS) expires or becomes unexercisable without having been

 

 

exercised in full, the
unpurchased Shares which were subject thereto shall become available for future grant or sale
under the ASOP (ADS) (unless the ASOP (ADS) has terminated). However, Shares that have actually
been issued under the ASOP (ADS) upon exercise of an Option(ADS), shall not be returned to the
ASOP (ADS) and shall not become available for future distribution under the ASOP (ADS).

	4.	 	Administration of the ASOP (ADS).

(a) Administrator. The ASOP (ADS) shall be administered by the Board or a Committee appointed
by the Board, which Committee shall be constituted to comply with Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the ASOP (ADS) 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 Option(ADS) may from time to time be granted hereunder;

(iii) to determine the number of ADSs to be covered by each such Option(ADS) granted hereunder;

(iv) to approve forms of agreement for use under the ASOP (ADS);

(v) to determine the terms and conditions, not inconsistent with the terms of the ASOP (ADS),
of any Option(ADS) granted hereunder;

(vi) to determine whether and under what circumstances an Option(ADS) may be settled in cash
under subsection 9(d) instead of ADSs;

(vii) to prescribe, amend and rescind rules and regulations relating to the ASOP (ADS),
including rules and regulations relating to sub-ASOP (ADS)s established for the purpose of
qualifying for preferred tax treatment under foreign tax laws;

(viii) to construe and interpret the terms of the ASOP (ADS) and Option(ADS)s granted pursuant
to the ASOP (ADS).

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

	5.	 	Eligibility.

(a) Option(ADS)s may be granted only to Associates.

(b) Each Option(ADS) shall be designated in the Option(ADS) Agreement as either an Incentive
Stock Option(ADS) or a Nonstatutory Stock Option(ADS).

(c) Neither the ASOP (ADS) nor any Option(ADS) shall confer upon any Optionee any right with
respect to continuing the Optionee’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.

 

 

The provisions of Appendix A shall apply to grants of Option(ADS)s to Associate who are U.S.
residents.

	6.	 	Term of ASOP (ADS). The ASOP (ADS) shall become effective upon its adoption by the Board. It
shall continue in effect for a term of ten (10) years unless sooner terminated under Section
13 of the ASOP (ADS).
	 
	7.	 	Term of Option(ADS). The term of each Option(ADS) shall be stated in the Option(ADS)
Agreement; provided, however, that the term shall be no more than ten (10) years from the date
of grant thereof.
	 
	8.	 	Option(ADS) Exercise Price and Consideration.

(a) The per ADS exercise price for the ADSs to be issued upon exercise of an Option(ADS) shall
be such price as is determined by the Administrator; provided, however, that in no case shall
the per ADS exercise price of an Option(ADS) be less than 90% of Fair Market Value on the date
of grant. Notwithstanding the foregoing, Option(ADS)s may be granted with a per ADS exercise
price of less than 90% of Fair Market Value pursuant to a merger or other corporate
transaction.

(b) The consideration to be paid for the ADSs to be issued upon exercise of an Option(ADS),
including the method of payment, shall be determined by the Administrator at the time of grant.
Such consideration may consist of (1) cash, (2) check, (3) promissory note in a form deemed
acceptable by the Administrator in its sole discretion, (4) other ADSs which (x) in the case of
ADSs acquired upon exercise of an Option(ADS), have been owned by the Optionee for more than
six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the ADSs as to which such Option(ADS) shall be
exercised, (5) consideration received by SATYAM under a cashless exercise program implemented
by SATYAM in connection with the ASOP (ADS), or (6) any combination of the foregoing methods of
payment. In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be reasonably expected to
benefit SATYAM.

	9.	 	Exercise of Option(ADS).

(a) Procedure for Exercise; Rights as a Shareholder. Any Option(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 Option(ADS) Agreement. Unless the Administrator
provides otherwise, the vesting of Option(ADS)s granted hereunder shall be tolled during any
unpaid leave of absence. An Option(ADS) SHALL not be exercised for a fraction of an ADS.

An Option(ADS) shall be deemed exercised when SATYAM receives: (i) written or electronic notice
of exercise (in accordance with the Option(ADS) Agreement) from the person entitled to exercise
the Option(ADS), and (ii) full payment for the ADSs with respect to which the Option(ADS) is
exercised. Full payment may consist of any consideration and method of payment authorized by
the Administrator and permitted by the Option(ADS) Agreement and the ASOP (ADS). ADSs issued
upon exercise of an Option(ADS) shall be issued in the name of the Optionee 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
Option(ADS). SATYAM shall issue (or cause to be issued) such ADSs

 

 

promptly after the
Option(ADS) is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the ADSs are issued, except as provided in Section 11 of
the ASOP (ADS).

(b) Termination of Relationship as an Associate. If an Optionee ceases to be an
Associate, such Optionee may exercise his or her Option(ADS) within such period of time as is
specified in the Option(ADS) Agreement to the extent that the Option(ADS) is vested on the date
of termination (but in no event later than the expiration of the term of the Option(ADS) as set
forth in the Option(ADS) Agreement). In the absence of a specified time in the Option(ADS)
Agreement, the Option(ADS) shall remain exercisable for three (3) months following the
Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or
her entire Option(ADS), the Shares underlying the ADSs covered by the unvested portion of the
Option(ADS) shall again become available for issuance under the ASOP (ADS). If, after
termination, the Optionee does not exercise his or her Option(ADS) within the time specified by
the Administrator, the Option(ADS) shall terminate, and the Shares underlying the ADSs covered
by such Option(ADS) shall again become available for issuance under the ASOP (ADS).

In the event of superannuation/retirement, the vesting schedule for options granted during the
period of employment shall continue. In case of death of a superannuated or retired Associate,
all the outstanding options as on that date shall vest immediately in the legal heirs or
nominee(s) of the deceased and such vested options shall be exercisable within twelve (12)
months from the date of death ofthe superannuated or retired Associate, but not earlier to one
year from the date of grant. Options not exercised within such period become invalid in the
hands of legal heirs or nominees and shall be available for reissuance under the plan.

The above clause is effective from October 20, 2005 and is applicable for the stock options
(ADS) granted thereafter (i.e. after October 20, 2005).

(c) Death or Disability of Optionee. If an Optionee dies while an Associate, or ceases to
be an Associate as a result of the Optionee’s disability, the vesting and exercisability of the
Option(ADS) shall accelerate in full and the Option(ADS) may be exercised within such period of
time as is specified in the Option(ADS) Agreement to the extent that the Option(ADS) is vested
on the date of death (but in no event later than the expiration of the term of such Option(ADS)
as set forth in the Option(ADS) Agreement) by the Optionee or Optionee’s estate or by a person
who acquires the right to exercise the Option(ADS) by bequest or inheritance. In the absence of
a specified time in the Option(ADS) Agreement, the Option(ADS) shall remain exercisable for
twelve (12) months following the Optionee’s termination. If the Option(ADS) is not so exercised
within the time specified herein, the Option(ADS) shall terminate, and the Shares underlying
the ADSs covered by such Option(ADS) shall again become available for issuance under the ASOP
(ADS).

(d) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash
or Shares, an Option(ADS) previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that such offer is
made.

 

 

	10.	 	Non-Transferability of Option(ADS)s. The Option(ADS)s 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
Optionee, only by the Optionee.
	 
	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 Option(ADS), and the number of Shares (in the
form of ADSs) which have been authorized for issuance under the ASOP (ADS) but as to which no
Option(ADS)s have yet been granted or which have been returned to the ASOP (ADS) upon
cancellation or expiration of an Option(ADS), as well as the price per ADS covered by each such
outstanding Option(ADS), shall be proportionately adjusted for any increase or decrease in the
number of issued Shares 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 shares 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
Option(ADS).

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
SATYAM, the Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion may provide
for an Optionee to have the right to exercise his or her Option(ADS) until fifteen (15) days
prior to such transaction as to all of the Optioned Stock covered thereby, including ADSs as to
which the Option(ADS) would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase Option(ADS) applicable to any ADSs purchased upon exercise
of an Option(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
been previously exercised, an Option(ADS) will terminate immediately prior to the consummation
of such proposed action.

(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 Option(ADS) shall be
assumed or an equivalent Option(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 Option(ADS), the Optionee shall fully vest in and have the right
to exercise the Option(ADS) as to all of the Optioned Stock, including ADSs as to which it
would not otherwise be vested or exercisable. If an Option(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 Optionee in writing or electronically that the Option(ADS)
shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and
the Option(ADS) shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option(ADS) shall be considered assumed if, following the merger or sale of
assets, the Option(ADS) confers the right to purchase or receive, for each ADS subject to the
Option(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 Option(ADS),
for each ADS subject to the Option(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 Option(ADS)s. The date of grant of an Option(ADS) shall, for all
purposes, be the date on which the Administrator makes the determination granting such
Option(ADS), or such other date as is determined by the Administrator. Notice of the
determination shall be given to each Associate to whom an Option(ADS) is so granted within
a reasonable time after the date of such grant.

	13.	 	Amendment and Termination of the ASOP (ADS).

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the
ASOP (ADS).

(b) Shareholder Approval. The Board shall obtain shareholder approval of any ASOP (ADS)
amendment 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 ASOP (ADS) shall impair the rights of any Optionee, unless mutually agreed otherwise
between the Optionee and the Administrator, which agreement must be in writing and signed by
the Optionee and SATYAM. Termination of the ASOP (ADS) shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect to Option(ADS)s granted
under the ASOP (ADS) 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 Option(ADS)
unless the exercise of such Option(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 Option(ADS), the
Administrator may require the person exercising such Option(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.

	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 (ADS), shall at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the ASOP (ADS).

 

 

	17.	 	Shareholder Approval. The ASOP (ADS) shall be subject to approval by shareholders of
SATYAM within twelve (12) months after the date the ASOP (ADS) is adopted. Such
shareholder approval shall be obtained in the degree and manner required by Applicable
Laws.

I hereby certify that the ASOP (ADS) was duly adopted by the Board of Directors of Satyam
Computer Services Limited on May 26, 2000.

Executed at Hyderabad, India on this 27th day of July, 2001.

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

I hereby certify that the foregoing is as approved by the shareholders of Satyam Computer
Services Limited on May 28, 1999.

Executed at Hyderabad, India on this 27th day of July, 2001.

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

APPENDIX A

RULES FOR U.S. OPTION(ADS) GRANTS

The following additional rules shall apply in the case of Option(ADS) grants to U.S. residents.

	1.	 	Term of Option(ADS). Notwithstanding Section 7 of the ASOP (ADS), in the case of an
Incentive Stock Option(ADS) granted to an Optionee who, at the time the Option(ADS) is
granted, owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of SATYAM or any Parent or Subsidiary, the term of the Option(ADS) shall
be five (5) years from the date of grant or such shorter term as may be provided in the
Option(ADS) Agreement.
	 
	2.	 	Option(ADS) Exercise Price.

(a) In the case of an Incentive Stock Option(ADS)

(i) granted to an Associate who, at the time of grant of such Option(ADS), owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of
SATYAM or any Parent or Subsidiary, the exercise price shall be no less than 110% of
the Fair Market Value per ADS on the date of grant.

(ii) granted to any other Associate, the per ADS exercise price shall be no less than
100% of the Fair Market Value per ADS on the date of grant.

(b) In the case of a Nonstatutory Stock Option(ADS), the per ADS exercise price shall be determined
by the Administrator; provided, however, that in the case of an Option(ADS) intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the Code, the per ADS
exercise price shall be no less than 100% of the Fair Market Value per ADS on the date of grant.

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