SATYAM COMPUTER SERVICES LIMITED SECUNDERABAD 500 003 Associate Stock Option Plan(ADS) 2000 EQUITY INCENTIVE ASOP (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 ofassociates 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 andgrowth of SATYAM.
 
  §   Providing them with a good and attractive motivational tool to improve theirperformance.
 
  §   Providing an opportunity for the professional partners to become financial partnersin the Equity of SATYAM.
 
  §   Retaining the talent and services of the associates who have contributed to thesuccess 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 generaladministration 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 stockexchange or quotation on which the ADSs are listed or quoted, or the applicable laws of anyother 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 toShare(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 successorstatute or statutes thereto. Reference to any particular Code section shall include anysuccessor 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 ofIndia.
(i) “Director” means a member of the Board.

 


 

(j) “Disability” means total and permanent disability as defined in Section 22(e)(3) of theCode.
(k) “Associate” means any person, including officers and Directors, employed by SATYAM or anyParent 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 orbetween SATYAM, its Parent, any Subsidiary, or any successor. Neither service as a Director norpayment 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 stockexchange 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 incentivestock Option(ADS) within the meaning of Section 422 of the Code and which is designated as anIncentive Stock Option(ADS) by the Administrator.
(n) “Nonstatutory Stock Option(ADS)” means an Option(ADS) (or portion thereof) that is notdesignated as an Incentive Stock Option(ADS) by the Administrator, or which is designated as anIncentive Stock Option(ADS) by the Administrator but fails to qualify as an Incentive StockOption(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 anOptionee evidencing the terms and conditions of an individual Option(ADS) grant. TheOption(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 inSection 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 theASOP (ADS).
(v) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, asdefined 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) andsold 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, theunpurchased Shares which were subject thereto shall become available for future grant or saleunder the ASOP (ADS) (unless the ASOP (ADS) has terminated). However, Shares that have actuallybeen issued under the ASOP (ADS) upon exercise of an Option(ADS), shall not be returned to theASOP (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 appointedby 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 caseof a Committee, the specific duties delegated by the Board to such Committee, and subject tothe approval of any relevant authorities, the Administrator shall have the authority in itsdiscretion:
(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 cashunder 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 ofqualifying for preferred tax treatment under foreign tax laws;
(viii) to construe and interpret the terms of the ASOP (ADS) and Option(ADS)s granted pursuantto the ASOP (ADS).
(c) Effect of Administrator’s Decision. All decisions, determinations and interpretations ofthe 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 IncentiveStock Option(ADS) or a Nonstatutory Stock Option(ADS).
(c) Neither the ASOP (ADS) nor any Option(ADS) shall confer upon any Optionee any right withrespect to continuing the Optionee’s relationship as an Associate with SATYAM, nor shall theyinterfere in any way with his or her right or SATYAM’s right to terminate such relationship atany 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. Itshall continue in effect for a term of ten (10) years unless sooner terminated under Section13 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 dateof 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) shallbe such price as is determined by the Administrator; provided, however, that in no case shallthe per ADS exercise price of an Option(ADS) be less than 90% of Fair Market Value on the dateof grant. Notwithstanding the foregoing, Option(ADS)s may be granted with a per ADS exerciseprice of less than 90% of Fair Market Value pursuant to a merger or other corporatetransaction.
(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 deemedacceptable by the Administrator in its sole discretion, (4) other ADSs which (x) in the case ofADSs acquired upon exercise of an Option(ADS), have been owned by the Optionee for more thansix months on the date of surrender, and (y) have a Fair Market Value on the date of surrenderequal to the aggregate exercise price of the ADSs as to which such Option(ADS) shall beexercised, (5) consideration received by SATYAM under a cashless exercise program implementedby SATYAM in connection with the ASOP (ADS), or (6) any combination of the foregoing methods ofpayment. In making its determination as to the type of consideration to accept, theAdministrator shall consider if acceptance of such consideration may be reasonably expected tobenefit SATYAM.
9.   Exercise of Option(ADS).
(a) Procedure for Exercise; Rights as a Shareholder. Any Option(ADS) granted hereunder shall beexercisable according to the terms hereof at such times and under such conditions as determinedby the Administrator and set forth in the Option(ADS) Agreement. Unless the Administratorprovides otherwise, the vesting of Option(ADS)s granted hereunder shall be tolled during anyunpaid 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 noticeof exercise (in accordance with the Option(ADS) Agreement) from the person entitled to exercisethe Option(ADS), and (ii) full payment for the ADSs with respect to which the Option(ADS) isexercised. Full payment may consist of any consideration and method of payment authorized bythe Administrator and permitted by the Option(ADS) Agreement and the ASOP (ADS). ADSs issuedupon exercise of an Option(ADS) shall be issued in the name of the Optionee until the ADSs areissued (as evidenced by the appropriate entry on the books of SATYAM or of a duly authorizedtransfer agent of SATYAM), no right to vote or receive dividends or any other rights as ashareholder shall exist with respect to the ADSs, notwithstanding the exercise of theOption(ADS). SATYAM shall issue (or cause to be issued) such ADSs

 


 

promptly after theOption(ADS) is exercised. No adjustment will be made for a dividend or other right for whichthe record date is prior to the date the ADSs are issued, except as provided in Section 11 ofthe ASOP (ADS).
(b) Termination of Relationship as an Associate. If an Optionee ceases to be anAssociate, such Optionee may exercise his or her Option(ADS) within such period of time as isspecified in the Option(ADS) Agreement to the extent that the Option(ADS) is vested on the dateof termination (but in no event later than the expiration of the term of the Option(ADS) as setforth 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 theOptionee’s termination. If, on the date of termination, the Optionee is not vested as to his orher entire Option(ADS), the Shares underlying the ADSs covered by the unvested portion of theOption(ADS) shall again become available for issuance under the ASOP (ADS). If, aftertermination, the Optionee does not exercise his or her Option(ADS) within the time specified bythe Administrator, the Option(ADS) shall terminate, and the Shares underlying the ADSs coveredby 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 theperiod 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 ornominee(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 oneyear from the date of grant. Options not exercised within such period become invalid in thehands 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 tobe an Associate as a result of the Optionee’s disability, the vesting and exercisability of theOption(ADS) shall accelerate in full and the Option(ADS) may be exercised within such period oftime as is specified in the Option(ADS) Agreement to the extent that the Option(ADS) is vestedon 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 personwho acquires the right to exercise the Option(ADS) by bequest or inheritance. In the absence ofa specified time in the Option(ADS) Agreement, the Option(ADS) shall remain exercisable fortwelve (12) months following the Optionee’s termination. If the Option(ADS) is not so exercisedwithin the time specified herein, the Option(ADS) shall terminate, and the Shares underlyingthe 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 cashor Shares, an Option(ADS) previously granted, based on such terms and conditions as theAdministrator shall establish and communicate to the Optionee at the time that such offer ismade.

 


 

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 bythe laws of descent or distribution and may be exercised, during the lifetime of theOptionee, 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 theform of ADSs) which have been authorized for issuance under the ASOP (ADS) but as to which noOption(ADS)s have yet been granted or which have been returned to the ASOP (ADS) uponcancellation or expiration of an Option(ADS), as well as the price per ADS covered by each suchoutstanding Option(ADS), shall be proportionately adjusted for any increase or decrease in thenumber of issued Shares resulting from a stock split, reverse stock split, Share-to-ADS ratiochange, stock dividend, combination or reclassification of the Shares, or any other increase ordecreasein the number of issued Shares effected without receipt of consideration by SATYAM. Theconversion of any convertible securities of SATYAM shall not be deemed to have been “effectedwithout receipt of consideration.” Such adjustment shall be made by the Board, whosedetermination in that respect shall be final, binding and conclusive. Except as expresslyprovided herein, no issuance by SATYAM of shares of stock of any class, or securitiesconvertible into shares of stock of any class, shall affect, and no adjustment by reasonthereof shall be made with respect to, the number or price of the ADSs subject to anOption(ADS).
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation ofSATYAM, the Administrator shall notify each Optionee as soon as practicable prior to theeffective date of such proposed transaction. The Administrator in its discretion may providefor an Optionee to have the right to exercise his or her Option(ADS) until fifteen (15) daysprior to such transaction as to all of the Optioned Stock covered thereby, including ADSs as towhich the Option(ADS) would not otherwise be exercisable. In addition, the Administrator mayprovide that any Company repurchase Option(ADS) applicable to any ADSs purchased upon exerciseof an Option(ADS) shall lapse as to all such ADSs, provided the proposed dissolution orliquidation takes place at the time and in the manner contemplated. To the extent it has notbeen previously exercised, an Option(ADS) will terminate immediately prior to the consummationof 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 beassumed or an equivalent Option(ADS) substituted by the successor corporation or a Parent orSubsidiary of the successor corporation. In the event that the successor corporation refuses toassume or substitute for the Option(ADS), the Optionee shall fully vest in and have the rightto exercise the Option(ADS) as to all of the Optioned Stock, including ADSs as to which itwould not otherwise be vested or exercisable. If an Option(ADS) becomes fully vested andexercisable 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, andthe Option(ADS) shall terminate upon the expiration of such period. For the purposes of thisparagraph, the Option(ADS) shall be considered assumed if, following the merger or sale ofassets, the Option(ADS) confers the right to purchase or receive, for each ADS subject to theOption(ADS) immediately prior to the merger or sale of assets, the consideration (whetherstock, cash, or other

 


 

securities or property) received in the merger or sale of assets byholders of ADSs for each ADS held on the effective date of the transaction (and if the holderswere offered a choice of consideration, the type of consideration chosen by the holders of amajority of the outstanding ADSs); provided, however, that if such consideration received inthe merger or sale of assets is not solely equity shares (or their equivalent) of the successorcorporation or its Parent, the Administrator may, with the consent of the successorcorporation, 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) ofthe successor corporation or its Parent equal in fair market value to the per ADS considerationreceived 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 allpurposes, be the date on which the Administrator makes the determination granting suchOption(ADS), or such other date as is determined by the Administrator. Notice of thedetermination shall be given to each Associate to whom an Option(ADS) is so granted withina 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 theASOP (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 ofthe ASOP (ADS) shall impair the rights of any Optionee, unless mutually agreed otherwisebetween the Optionee and the Administrator, which agreement must be in writing and signed bythe Optionee and SATYAM. Termination of the ASOP (ADS) shall not affect the Administrator’sability to exercise the powers granted to it hereunder with respect to Option(ADS)s grantedunder 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 complywith Applicable Laws and can be further subject to the approval of counsel for SATYAM withrespect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Option(ADS), theAdministrator may require the person exercising such Option(ADS) to represent and warrant atthe time of any such exercise that the ADSs are being purchased only for investment and withoutany 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 anyregulatory body having jurisdiction, which authority is deemed by SATYAM’s counsel to benecessary to the lawful issuance and sale of any ADSs hereunder, shall relieve SATYAM ofany liability in respect of the failure to issue or sell such Shares as to which suchrequisite authority shall not have been obtained.
16.   Reservation of Shares. SATYAM, during the term of this ASOP (ADS), shall at all timesreserve and keep available such number of Shares as shall be sufficient to satisfy therequirements of the ASOP (ADS).

 


 

17.   Shareholder Approval. The ASOP (ADS) shall be subject to approval by shareholders ofSATYAM within twelve (12) months after the date the ASOP (ADS) is adopted. Suchshareholder approval shall be obtained in the degree and manner required by ApplicableLaws.
I hereby certify that the ASOP (ADS) was duly adopted by the Board of Directors of SatyamComputer 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 ComputerServices 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 anIncentive Stock Option(ADS) granted to an Optionee who, at the time the Option(ADS) isgranted, owns stock representing more than ten percent (10%) of the voting power of allclasses of stock of SATYAM or any Parent or Subsidiary, the term of the Option(ADS) shallbe five (5) years from the date of grant or such shorter term as may be provided in theOption(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 stockrepresenting more than ten percent (10%) of the voting power of all classes of stock ofSATYAM or any Parent or Subsidiary, the exercise price shall be no less than 110% ofthe 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 than100% 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 determinedby 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 ADSexercise price shall be no less than 100% of the Fair Market Value per ADS on the date of grant.