Exhibit 10.1
Azure Power Global Limited
Azure Power Global Limited Employee Stock Option Plan 2015
Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
PREAMBLE
The Compensation Committee of Azure Power Global Limited formed to assist the Board of Directors in recommending to the Board for approval and/ or evaluating the compensation plans, policies, and programs to ensure that the compensation programs are designed to encourage high performance, promote accountability and assure that employee interests are aligned with the interests of the Company’s shareholders.
In accordance with the above mentioned objective the Compensation Committee Charter, and by the powers conferred to the Compensation Committee, the Compensation Committee has discussed and drafted thisAzure Power Global Limited Employee Stock Option Plan 2015 with an object to encourage high performance, promote accountability and align employees interests with the interests of the Company’s shareholders, and to provide talented and critical executives with an opportunity to acquire an ownership interest in the Company and/or to provide incentive to such executive by granting, them an option to acquire the Shares in Company.
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
| Contents | ||
Article 1 | Name and objectives of the Plan | |
Article 2 | Definitions and interpretations | |
Article 3 | Implementation | |
Article 4 | Effective date and Plan duration | |
Article 5 | Administration and Compensation Committee | |
Article 6 | Grant of Options | |
Article 7 | Vesting of Options | |
Article 8 | Exercise of Options | |
Article 9 | Exit Options | |
Article 10 | Terminal Conditions | |
Article 11 | Non-Assignability | |
Article 12 | Right of an Employee in Stock | |
Article 13 | Terms and Conditions of Shares | |
Article 14 | Eligibility | |
Article 15 | Change in Capital Structure or Corporate Action | |
Article 16 | Amendment or Termination of the Plan | |
Article 17 | Others | |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 1
NAME AND OBJECTIVES OF THE PLAN
| 1.1 | The Plan shall be called the Azure Power Global Limited Employee Stock Option Plan 2015 (‘Azure Power ESOP’ or ‘the Plan’). |
| 1.2 | This Plan has been adopted by the Board pursuant to a resolution passed at its meeting held on20th July, 2015, read with the Special Resolution passed by the Company at the Shareholders Meeting held on20th July, 2015. |
| 1.3 | The objectives of the Plan are: |
| i) | To create a sense of ownership and participation amongst the employees; |
| ii) | To provide means to enable the Company to attract and retain high quality human talent in the employment of the Company,; |
| iii) | To enhance the compensation/reward and make it competitive. |
| iv) | To achieve sustained growth of the Company and creation of shareholder value by aligning the interests of the employees with the long term interests of the Company; |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 2
DEFINITIONS AND INTERPRETATIONS
| I) | Definitions: |
The terms defined in this Plan shall for the purposes of this Plan, have the meanings specified herein and terms not defined shall have the meanings as defined in the Companies Act 2001, or in any statute or re-enactments hereof, as the case may be.
| 2.1 | ‘Applicable Law’ means the legal statutes, to the extent applicable to stock options, as applicable in Mauritius including, but not limited to the Companies Act 2001 and the rules/ guidelines/ notifications issued there under, and any modifications or re-enactments thereof. |
| 2.2 | ‘Azure Power Global Limited Employee Stock Option Agreement’ (‘the Agreement’) means the agreement between the Company and the grantee containing the terms and conditions specific to an individual employee’s stock options. The Azure Power Global Limited Employee Stock Option Agreement’ will however be subject to the terms and conditions of the Plan. |
| 2.3 | ‘Board of Directors’ / ‘Board’ means the Board of Directors of the Company for the time being and re-constituted and/or re-structured from time to time during the existence of this Plan and where the context so requires include the Board of Directors of the Holding Company and/or its Subsidiary Company. |
| 2.4 | “Cashless Exercise”means an arrangement facilitated by the company with or without an arrangement with a brokerage firm, wherein the Exercise Price is given as a loan to the employee with a written commitment from an employee to sell the shares immediately to recover the Exercise Price, tax and other incidental charges. The employee retains the balance, if any” |
| 2.5 | ‘Change in Capital Structure’ means a change in the capital structure of the Company as a result of reclassification of shares, splitting up of the face value of shares, sub-division of shares, issue of bonus shares, issue of rights shares, conversion of shares into other shares or securities and any other change in the rights or obligations in respect of shares. |
| 2.6 | ‘Closing Date’ shall mean 10 years from date of approval of the Plan or finishing of all stocks allocated for employee stock options, whichever is earlier |
| 2.7 | ‘Common Stock’ means the equity shares of the Company and includes any securities convertible into equity shares |
| 2.8 | ‘Committee’ shall mean Compensation Committee as formed under the Company’s Compensation Committee Charter. |
| 2.9 | ‘Company’ means Azure Power Global Limited, a Company incorporated under the laws of the Republic of Mauritius (“Mauritius”) having its registered office at c/o AAA Global Services Ltd., 1st Floor, The Exchange 18 Cybercity, Ebene, Mauritius. |
| 2.10 | ‘Compensation Committee’ means the ‘Compensation Committee’ set up by the Company under Article 3. |
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Azure Power Global Limited ESOP Plan 2015
| 2.11 | ‘Corporate Action’ means and includes one of the following events: |
| i) | the merger, de-merger, spin-off, consolidation, amalgamation, sale of business, dissolution or other reorganization of the Company (except to a subsidiary) in which the shares are converted into or exchanged for: |
| a) | a different class of securities of the Company; or |
| b) | any securities of any other issuer; or |
| c) | cash; or |
| d) | other property. |
| ii) | the sale, lease or exchange of all or substantially whole of the assets or undertaking of the Company to any other Company/entity (except subsidiary). |
| iii) | the adoption by the shareholders of the Company of a Plan of liquidation, dissolution or winding up. |
| 2.12 | ‘Disability’ shall mean “Disability” as defined in any applicable Agreement between the grantee and the Company or if there is no such Agreement or Disability is not defined therein, then a grantee’s becoming physically or mentally incapacitated so that he is therefore reasonably expected to be unable for a period of three (3) consecutive months or for an aggregate of six (6) months in any twelve (12) month period to perform his duties to the Company. |
| 2.13 | ‘Employee’ means: |
| i) | Any person employed by the Company in permanent employment of the Company including any Director of the Company, whether whole time or not; or |
| ii) | Any employee in permanent employment of a holding or subsidiary including its Directors, whether whole time or not; or |
| iii) | Any person as may be determined by the Compensation Committee pursuant to Article 5.3.4. |
| 2.14 | ‘Employer’ means the Company, its Holding Company or any of its subsidiary companies. |
| 2.15 | ‘Exercise’ in relation to an option means, submission of an application by the employee for transfer/ allotment of shares, in respect of the options vested in him under the Plan, along with the Exercise Price payable for the shares. |
| 2.16 | ‘Exercise Period’ in relation to options means the period within which the option can be exercised i.e. the period commencing from the date of vesting of options and ending on the date after which options cannot be exercised. |
| 2.17 | ‘Exercise Price’ means the price payable by the employee on the exercise of the options offered under a grant. This price will be determined by the Compensation Committee at the time of grant of options. |
| 2.18 | ‘Fair Market Value’ (FMV) means: |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
Till the time shares of Azure Power Global Limited are not listed on a Recognized Stock Exchange, the value shall be:
| i) | based on the value as existing at the last round of funding/ capital raise done by the Company; or |
| ii) | as determined by the Independent appraisers, as appointed by the Compensation Committee, based upon the Company’s accounts for the previous three financial years, the current book value per share of the Company’s outstanding capital stock, the price at which shares of the Company’s outstanding capital stock have previously been issued by the Company, the liquidation rights and other preferences to which the holders of those shares are entitled, the lack of marketability of the shares, and other factors that the Independent appraisers considers appropriate in good faith. |
Once the shares of the Company are listed on a recognised stock exchange, FMV would refer to the average of the opening and the closing price of the share on the date of valuation on the recognized stock exchange on which shares of the Company are listed.
If the shares are listed on more than one Recognized Stock Exchanges, the FMV shall be the average of opening price and closing price of the share on the recognised stock exchange which records the highest volume of trading in the share.
If, on the date of valuation of the option, there is no trading in the share on any recognized stock exchange, the FMV shall be -
| i) | the closing price of the share on any recognised stock exchange on a date closest to the date of valuation of the option and immediately preceding such date; or |
| ii) | the closing price of the share on a recognised stock exchange, which records the highest volume of trading in such share, if the closing price, as on the date closest to the date of vesting of the option and immediately preceding such date, is recorded on more than one recognized stock exchange. |
| 2.19 | ‘Grant’ means, any options granted pursuant to the Plan. |
| 2.20 | ‘Grantee’ means the eligible employee to whom options are offered under the Plan by the employer in consultation with the Compensation Committee. |
| 2.21 | ‘Grant Date’ means the date specified in the Azure Power Global Limited Option Agreement on which a grant is made to an employee by the Company. |
| 2.22 | ‘Holding Company’ means a Holding Company of Azure Power Global Limited, as defined inthe Companies Act 2001. |
| 2.23 | ‘IPO’ means Initial Public Offer of the Company’s shares resulting in a listing of the Shares on any Recognised Stock Exchange. |
| 2.24 | ‘Option’ means the right, without any obligation, granted to an Employee to subscribe to shares or any resultant shares upon such terms and conditions as may be specified in the Plan. |
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Azure Power Global Limited ESOP Plan 2015
| 2.25 | ‘Promoter’ means: |
| i) | The person or persons who are instrumental in the formation of the Company or programme pursuant to which the Shares were offered to the public; |
| ii) | The person or persons named in the offer document as promoter(s). Provided that a director or officer of the Company if he is acting as such only in the professional capacity will not be deemed to be a promoter. |
Explanation: Where the Promoter of a Company is a body corporate, the Promoter of that body corporate shall also be deemed to be a Promoter of the Company
| 2.26 | ‘Resultant Shares’ means the Shares or other securities issued in lieu of the Shares of the Company, on any change in capital structure or on any Corporate Action as mentioned in this Plan. |
| 2.27 | ‘Shares’ means the equity shares of the Company and securities convertible into equity shares and shall include American Depository Receipts (ADRs), Global Depository Receipts (GDRs) or other depository receipts representing underlying equity shares or securities convertible into equity shares and where the context so requires shall include the Resultant Shares also. |
| 2.28 | ‘Recognised Stock Exchange/Stock exchange’ means, a stock exchange which is notified / recognized by any government authority as a stock exchange, for the purpose of trading in shares. |
| 2.29 | ‘Shareholder’ means a person who is registered as a shareholder in the Company’s register of shareholder. |
| 2.30 | ‘Strategic Sale’ refers to the sale of hundred percent of the equity of the Company in it’s entirely and / or any event resulting from Corporate Action undertaken by the Company. |
| 2.31 | ‘Subsidiary’ means a subsidiary Company of Azure Power Global Limited, as defined in the Mauritius Companies Act 2001. |
| 2.32 | ‘Vesting’ means the process by which an employee becomes eligible to exercise his rights to apply for shares of the Company pursuant to the options granted to him under the Plan. |
| 2.33 | ‘Vesting Date’ in relation to an option means the earliest date on which the rights under the options may be exercised by grantee. |
| 2.34 | ‘Vested Options’ means an option in respect of which the relevant vesting conditions have been satisfied and as such, the eligible Employee has become eligible to exercise the option. |
| 2.35 | ‘Unvested Options’ means an option in respect of which the relevant vesting conditions have been satisfied and as such, the eligible employee has not become eligible to exercise the option. |
The definitions as given in this section are for the purposes of interpretations of this Plan and should not be used for any other purposes.
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Azure Power Global Limited ESOP Plan 2015
| II) | Interpretations |
In this document, unless the contrary intention appears:
| i) | the singular includes the plural and vice versa; |
| ii) | the word ‘person’ includes an individual, a firm, a Company, an association of persons or a body of individuals whether incorporated or not, or local authority; and |
| iii) | any word or expression importing the masculine, feminine or neuter genders only, shall be taken to include all three genders. |
| III) | Article Headings |
Article headings are for information only and shall not affect the construction of this document.
| IV) | References |
| i) | A reference to an Article or schedule is respectively a reference to an Article or schedule of this document. The schedules to this document shall for all purposes form part of this document. |
| ii) | Reference to any Act, Rules, Statute or Notification shall include any statutory modification, substitution or re-enactment thereof. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 3
IMPLEMENTATION
| 3.1 | This Plan shall be implemented by the Compensation Committee under the policy and framework laid down by the Committee and/or Board of the Company, in accordance with the authority delegated to the Compensation Committee in this regard from time to time and subject to the amendments, modifications and alterations to the Plan made by the Committee and/or Board in this connection. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 4
EFFECTIVE DATE AND PLAN DURATION
| 4.1 | This Plan shall be deemed to have come into force on 20th July, 2015 or on such date other date as may be decided by the Committee. |
| 4.2 | The Plan shall expire and no grants will be made after 10 years, or such other date as may be decided by the Committee. |
| 4.3 | The tenure of the Plan shall be 10 years from date of Plan approval. Any stock Options, which remain un-granted after Closing Date, would automatically deemed to be lapsed and/or ineffective. |
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Azure Power Global Limited ESOP Plan 2015
ARTICLE 5
ADMINISTRATION AND COMPENSATION COMMITTEE
| 5.1 | This Plan shall be administered by the Compensation Committee, as outlined in Article 3 above and will be in compliance with the terms of the Plan and Applicable Law, as would be prevailing from time to time and in addition to other express powers and authorizations conferred by the Plan and the Compensation Committee which shall be comprised of two or more nominee director(s) & independent director(s). |
| 5.2 | The Compensation Committee shall consist of such number of persons, as the Committee shall deem fit. The Compensation Committee, in exercise of its powers, may require any information from the Committee and/or seek any select, or receive advice from any Employee as it may deem fit to, fully and effectively discharge its duties and responsibilities. The Committee shall constitute a Compensation Committee for administration, implementation and superintendence of the Plan. The Compensation Committee shall be a committee consisting directors who are also members of the Board. |
| 5.3 | The powers of the Compensation Committee, inter alia, include the power to: |
| 5.3.1 | determine the number of Options to be Granted, to each Employee and in the aggregate, and the time at which such Grant shall be made; |
| 5.3.2 | determine the vesting and/or lock-in-period of the Grant made to any Employee and/or any conditions subject to which such vesting may take place; |
| 5.3.3 | determine the Employees eligible for participation in the Plan in compliance of this Plan; |
| 5.3.4 | determine any person (who has entered into, or works under an Agreement with the Company) eligible for participation in the Plan; |
| 5.3.5 | determine the performance parameters for Grant and/or Vesting of Options granted to an Employee, under the Plan; |
| 5.3.6 | assess the performance of an Employee for granting/determining the Vesting of the Options; |
| 5.3.7 | lay down the conditions under which Options vested in Employees may lapse in case of termination of employment for fraud, misconduct or where an Employee joins competition etc; |
| 5.3.8 | determine the Exercise Period within which the Employee should Exercise the Options and that Options would lapse on failure to Exercise the Option with in the Exercise Period; |
| 5.3.9 | specify time period within which the Employee shall Exercise the Vested Options in the event of termination or resignation of an Employee; |
| 5.3.10 | lay down the procedure for making a fair and reasonable adjustment to the number of Options and to the Exercise Price in case of Change in the Capital Structure and/or Corporate Action; |
| 5.3.11 | provide for the right of an Employee to Exercise all the Options Vested in him at one time or at various points of time within the Exercise Period; |
| 5.3.12 | decide the number of Shares of Common Stock which may be issued under each Option; |
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| 5.3.13 | lay down the method for satisfaction of any tax obligation arising in connection with the Options or such Shares; |
| 5.3.14 | lay down the procedure for Cashless Exercise of Options, if any; |
| 5.3.15 | provide for the Grant, Vesting and Exercise of Options in case of Employees who are on long leave or whose services have been seconded to any other Company or who have joined Holding Company or a Subsidiary or an Associate Company at the instance of the Employer; |
| 5.3.16 | And generally exercise such powers as may be necessary or expedient in connection of the implementation or administration of the Plan. |
The members of the Compensation Committee and their powers and functions can be specified, varied, altered or modified from time to time by the Committee subject to such rules and regulations as may be in force. The Committee may further provide that the Compensation Committee shall exercise certain powers only after consulting the Committee.
| 5.4 | The meetings of the Compensation Committee may be held by conference call. A simple majority of the Compensation Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, or in lieu of a meeting, acts approved in writing by a majority of the members, shall be deemed to be the acts of the Compensation Committee. |
| 5.5 | The decision of the Compensation Committee will be final and binding in respect of the Plan. If the members of the Compensation Committee are evenly divided on any issue, then the Chair of the Compensation Committee (or in his or her absence, a member designated by the Compensation Committee members present at such meeting) will have the second or casting vote. |
| 5.6 | No member of the Compensation Committee shall be personally liable for any decision or action taken in good faith with respect to the Plan. |
| 5.7 | A member of the Compensation Committee shall abstain from participating in and deciding any matter relating to granting of any Option to him. |
| 5.8 | The members of the Committee may attend and observe meetings of the Compensation Committee, but shall not participate in any discussion or deliberation unless invited to do so by the Compensation Committee and in any event shall not be entitled to vote. |
| 5.9 | The Compensation Committee shall keep regular minutes of any meetings where actions are taken. Any such minutes kept by the Compensation Committee shall be distributed to each member of the Compensation Committee and other members of the Committee. The Chair of the Compensation Committee shall maintain the original signed minutes. The Chair shall report to the Committee at appropriate times and as otherwise requested by the Committee. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 6
GRANT OF OPTIONS
| 6.1 | Compensation Committee may from time to time (for existing employees annually and for new Employees at the time of joining) make Grants to one or more Employees, determined by it to be eligible for participation in the Plan in accordance with the provisions of Article 14 of the Plan. The sum of all grants made under this Plans shall not at any time exceed 10% of the total issued and subscribed equity capital of the Company. Options shall be deemed to have been issued under the Plan only to the extent actually issued and delivered pursuant to a Grant. To the extent that a Grant lapses or the rights of its Grantee terminate, any shares of Common Stock subject to such Grant shall again be available for the making of a Grant. The aggregate number of shares which may be issued under the Plan shall be subject to adjustment in the same manner as provided in this Plan with respect to shares of Common Stock subject to Options then outstanding. |
| 6.2 | The Grant shall be at such price as may be determined by the Compensation Committee and shall be specified in the Grant letter. |
| 6.3 | The Grant shall be in writing and shall specify the number of options granted, the price payable for exercising the options, the date/s on which some or all of the Options shall be eligible for vesting, fulfillment of the performance and other conditions, etc, if any, subject to which vesting shall take place and other terms and conditions thereto. |
| 6.4 | The option shall not be transferable and can be exercised only by the employees of the Company. |
| 6.5 | The Company shall issue fresh shares to meet the exercise obligation of the options. |
| 6.6 | The Company has set aside 10% of the paid up equity capital for the purpose of this Plan. Each Option entitles the Grantee thereof to apply for and be allotted one equity share of the Company at the Exercise Price. |
| 6.7 | All Employees who are eligible and are selected by the Compensation Committee for the grant shall be granted options the date they become eligible under the Plan. However, the Compensation Committee has the sole discretion in granting options prior to the employees meeting all the eligibility criteria. |
| 6.8 | All eligible Employees will be granted options by the Compensation Committee on the basis of any or all of the following criteria, as and when they apply: |
| • | Level, role and performance of the Employee; |
| • | Tenure in Company; |
| • | Such other factors as Compensation Committee may decide from time to time. |
| 6.9 | Each Option shall be evidenced by an Agreement between the Company and the Grantee, which shall contain such terms, and conditions as may be approved by the Compensation Committee. Each Agreement shall specify including but not limited to, (i) the effect of termination of employment, (ii) Disability, retirement or death on the exercise ability of the |
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| Option and such other terms and conditions as the Compensation Committee may deem necessary. |
| 6.10 | Under each Agreement, Grantee shall have the right to appoint any individual or legal entity in writing as his nominee under the Plan in the event of his death / Disability. Such nomination may be revoked in writing by the Grantee at any time during the time of employment and a new nominee may be appointed in writing on the form provided by the Compensation Committee for such purpose. Such nominee shall be the only legal representative recognised by the Company/ Compensation Committee as the inheritor of the Grantees option to the exclusion of all others. |
| 6.11 | The term of each Option shall be as specified by the Compensation Committee at the Grant Date and shall be stated in the Agreement; provided, however, that an Option may not be exercised after the end of the tenure of the Plan. |
| 6.12 | Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Compensation Committee and as shall be permissible under the Applicable Law and the terms of the Plan, which shall be specified in the Agreement evidencing the Option. An Option shall not, however, be exercised for fractional shares. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 7
VESTING OF OPTIONS
| 7.1 | The Vesting period will be decided by the Compensation Committee as and when any Grant takes place. |
| 7.2 | The Vesting period for all the Grant of options under this Plan shall be as mentioned below: |
Vesting period from the date of Grant | Percentage of vesting | |||
At the end of year 1 | 25 | % | ||
At the end of year 2 | 25 | % | ||
At the end of year 3 | 25 | % | ||
At the end of year 4 | 25 | % | ||
Notwithstanding anything to the contrary in this Plan, the Compensation Committee shall be entitled, in its absolute discretion, to vary or alter the Vesting Date from Employee to Employee or class thereof, as it may deem fit. Provided, however, that such variation shall not be to the disadvantage of the Employees.
| 7.3 | The Compensation Committee, in its absolute discretion may permit the Options granted, including Options, which have not vested, to be exercised, within such time, subject to such terms and conditions as it may determine. |
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Azure Power Global Limited ESOP Plan 2015
ARTICLE 8
EXERCISE OF OPTIONS
| 8.1 | There shall be no lock-in after the Options have Vested. The Vested options shall be eligible to be exercised on the Vesting Date itself. Notwithstanding anything to the contrary in this Plan, the Compensation Committee shall be entitled, in its absolute discretion, provide for any lock-in period after the Options have Vested from Employee to Employee or class thereof, as it may deem fit. |
| 8.2 | Notwithstanding any provisions to the contrary in this Plan, the Options must be Exercised before the end of the tenure of the Plan. |
| 8.3 | The Exercise Price would be decided at the Compensation Committee’s discretion. Such Exercise price will be intimated to the eligible Employees at the time of Grant of Options to them. |
| 8.4 | The eligible Employee can Exercise rights to convert the options into Shares either in full or in stages by addressing a communication to the Compensation Committee as per the Form that may be prescribed by the Compensation Committee from time to time. Eligible Employee shall mention the number of Options that he is willing to Exercise under the Plan. The eligible Employee, shall, at the time of Exercise of options send the prescribed form, together with payment for an amount equal to the aggregate Exercise Price payable in respect of the options exercised. |
| 8.5 | Under a Cashless Exercise, a holder who exercises the Options will have to simultaneously sell the Shares acquired on Exercise of Options and will only be entitled to receive the difference between the selling price and the Exercise Price for the Options exercised by him after deducting applicable taxes payable on exercise/sale, if any, and other amounts, expenses and charges due from him (including that in connection with the sale). |
| 8.6 | For the purpose of implementing the ‘Cashless Exercise’ the Compensation Committee shall be entitled to specify such procedures and/or mechanisms for the Shares issued on Exercise of the Options as may be necessary and the same shall be binding on the Employees . |
For the purpose of this Article, unless otherwise stated, Selling Price means:
| a. | Where the shares are listed on a Recognized Stock Exchange—the actual price realized. |
| b. | Where the Shares of the Company are not listed—the Fair Market Value as defined in Articles 2.17 of this Plan. |
| 8.7 | Notwithstanding anything contained herein or elsewhere in this Plan, it is hereby clarified that the Company is under no obligation to either buy the Shares or pay any compensation to any holder under this Article as a result of the inability or unwillingness of the holder to acquire any Shares, whether due to lack of funds, any restriction under law or otherwise. |
| 8.8 | Notwithstanding anything contained elsewhere in the Plan, the Compensation Committee and/or the Committee may, if the Exercise of Options within the Exercise Period, is prevented by any law or regulation in force, defer or refuse to permit the Exercise of Options till such time as it is prohibited by the applicable laws or regulations and in such an |
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| event. The Company shall not be liable to pay any compensation or similar payment to the Employee for any loss suffered due to such refusal. |
Provided further, that the Committee shall have the power and be and is hereby authorized to cancel all or any of the Options granted under the Plan if so required under any law or guideline for the time being in force
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Azure Power Global Limited ESOP Plan 2015
ARTICLE 9
EXIT OPTIONS
| 9.1 | Whilst in employment: |
| • | Until IPO or a Strategic Sale of the Company, the Employee who has Exercised his Options shall not, other than as expressly provided for herein or as may be amended in the Plan, sell, pledge, mortgage, charge, encumber or otherwise dispose off or create any lien or interest in the underlying Common Stock, whether express or implied in any manner whatsoever. |
| • | In event of an IPO, the Employee will be free to sell his Shares in the open market, subject to any holding restrictions by any regulatory body prevalent at that time. In event of a Strategic Sale prior to the IPO, all Vested Options of the Employee will be exited in the currency of the transaction (cash or equity swap, as the case may be). With respect to Unvested Options, they will be traded with Options under the new entity or they will be deemed as Vested and will be treated in the same manner as all other Vested Options. |
| 9.2 | Whilst not in employment: |
| • | Until IPO, or a Strategic Sale of the Company prior to the IPO, the ex-employee who has exercised his Options shall be free to sell his Shares to a third party subject to the right of first refusal lying with the Promoters and/or any other Employee of the Company at the price offered by the third party and exercise of right for first refusal shall not exceed a period of 30 days. |
| • | In event of an IPO, the ex-employee will be free to sell his Shares in the open market, subject to any restrictions under the Applicable Law, if any, at the time. In event of a Strategic Sale prior to the IPO, all exercised options of the ex-employee will be eligible for exit in the currency of the transaction (cash or equity swap) as for existing Employees of the Company. |
| 9.3 | If there is no IPO in 10 years, a market mechanism shall be provided to Employees to exit. This may be either: |
| • | An employee welfare trust funded by the Company which undertakes buying and selling of shares; or |
| • | Promoter(s) or other Shareholder(s) buy shares from any Employee wanting to exit. |
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ARTICLE 10
TERMINAL CONDITIONS
| 10.1 | If a Grantee’s employment (or other service) with the Company terminates: |
| • | For Cause, then the Options, all Vested but not Exercised as well as Unvested Options get cancelled immediately. |
“Cause” shall mean as per labor law , (i) the failure of the Employee, as judged by the Committee, to achieve assigned performance targets and objectives, (other than any such failure resulting from retirement, death or Disability as defined below), (ii) the engaging by the Employee in willful, reckless or grossly negligent misconduct which is not as per the code of conduct framed by the Company., or (iii) the Employee’s pleading guilty to or conviction of a felony (iv) fraud, misfeasance, breach of trust or wrongful disclosure of any secret or confidential information about the Company to any third party, or (v) employment of the Employee in any other organization or provision of services by the Employee for any other organization.
| 10.2 | Due to voluntary resignation on the part of the Grantee or on completion of the period of contract of his employment (or other service), then the Grantee shall have right to Exercise the Options that have vested upto the date of resignation or the date of completion of the period of contract of his employment (or other service) (as the case may be) and such Options shall be exercised within sixty days from the date of the voluntary resignation or completion of the period of contract of employment (or other service). The Unvested Options shall lapse on the date of resignation or completion of the period of contract of employment (or other service). |
| 10.3 | If a Grantee dies or becomes totally and permanently disabled while an employee of the Company; the granted stock options shall vest with the Employee (vested or unvested) or the beneficiary designated by the Grantee pursuant to Article 6.10 and the options must be exercised as below: - |
| • | In case of death within twelve months from the date of death or such extended time provided by the Compensation Committee; |
| • | In case of total and Disability a period of sixty days or such extended time provided by the Compensation Committee |
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ARTICLE 11
NON-ASSIGNABILITY
| 11.1 | The Option shall not be transferable or assignable by the Employee, otherwise than by will or the laws of descent and distribution and the Option shall be exercisable, during the Employee’s lifetime, only by him or, during periods of legal disability, by his legal representative. No Option shall be subject to execution, attachment or similar process. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 12
RIGHTS OF AN EMPLOYEE IN STOCK
| 12.1 | Neither Employee, nor his successor in interest, shall have any of the rights of a Shareholder of the Company with respect to the Shares for which the Option is granted until options are exercised and Shares are issued by the Company. |
| 12.2 | Except as may be otherwise provided in this Plan, the Option granted hereunder shall not be affected by any change of employment so long as employee continues to be employed by the Company or any Company within the Azure Power group. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 13
TERMS AND CONDITIONS OF SHARES
| 13.1 | All Shares acquired under the Plan shall be listed on the Stock Exchanges on which the Company’s shares are listed and will rank pari passu with all other Shares of the Company for the time being in issue, save as regards any right attached to any such Shares by reference to a record date prior to the date of allotment. Dividend in respect of Shares allotted on Exercise of the Options shall be payable pro-rata from the date of allotment. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 14
ELIGIBILITY
| 14.1 | A Stock Option Grant pursuant to the Plan may be made only to an individual who, at the time of Grant, is an Employee of the Company. |
| 14.2 | The Compensation Committee however is authorized to change the eligibility criteria from time to time. |
| 14.3 | Each Grant shall be evidenced by a written instrument duly executed by or on behalf of the Company. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 15
CHANGE IN CAPITAL STRUCTURE OR CORPORATE ACTION
| 15.1 | Except as hereinafter provided, a Grant made shall be subject to adjustment, by the Compensation Committee, at its discretion as to number and price of Options or Shares, as the case may be, in the event of ‘Change in Capital Structure’ or a ‘Corporate Action’ as defined in this Plan. |
| 15.2 | The existence of the Plan and the Grants made hereunder shall not in any way affect the right or the power of the Board or the Shareholders or the Company to make or authorize any ‘Change in Capital Structure’ or any ‘Corporate Action’ including any issue of shares, debt or other securities having any priority or preference with respect to the Shares or the rights thereof. |
| 15.3 | If there is a ‘Change in the Capital Structure of the Company’ before the Options granted under this Plan are exercised, the Employee shall be entitled to Exercise of the Options, to such number of Resultant Shares to which he would have been entitled as if all the Options not exercised by him had been exercised by him before such ‘Change in the Capital Structure’ of the Company had taken place and the rights under the Options shall stand corresponding adjusted. |
| 15.4 | The Shares in respect of which the Options are granted, are Shares as presently constituted. But if and when, prior to the expiry of the Exercise Period there is a ‘Change in the Capital Structure’ of the Company, the number of Shares with respect to which the Options may thereafter be exercised shall, in the event of: |
| i. | an increase in the number or Resultant Shares, be proportionately increased, and the Exercise Price, be proportionately reduced. |
| ii. | a reduction in the number of Resultant Shares, be proportionately reduced, and the Exercise Price, be proportionately increased. |
Provided further that in case the provisions of applicable law restrict/prohibit the issue of shares at a discount to its par value, the Exercise Price shall not be less than the amount as prescribed under such law.
| 15.5 | In the event of ‘Corporate Action’, the Compensation Committee, at least seven days prior to any ‘Corporate Action’ or thirty days thereafter, acting in its absolute discretion with or without the consent or approval of the Employee, as it may deem fit, shall in respect of the outstanding Options act on any of the following alternatives: |
| i. | Provide that on any Exercise of Options hereafter, the Employee shall be entitled to the Shares and / or Resultant Shares as if the Employee had been a Holder of the Shares on Exercise of the Options. |
| ii. | Make such adjustments to the Options outstanding to reflect the ‘Corporate Action’, as may be necessary, |
| iii. | Require the mandatory surrender to the Company, by all or some of the Employees, of all or Some of the outstanding Options, irrespective of whether, the Options, have vested or not, as on that date, and in such an event the Compensation Committee |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
| shall pay such Employees an amount in cash or otherwise, per Option, as the case may be, of the ‘Change in Control Value’ after deducting the balance Exercise Price payable, if any. |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 16
AMENDMENT OR TERMINATION OF THE PLAN
| 16.1 | The Committee in its absolute discretion may from time to time amend, alter or terminate the Plan or any Grant or the terms and conditions thereof provided, that no amendment, alteration or termination in any Grant previously made may be carried out, to the extent possible, which would impair or prejudice the rights of the Employee without the consent of the concerned Employee. |
Provided further, that the Committee may not, without the approval of the Shareholders, amend the Plan:
| • | To increase the aggregate number of Shares which may be issued pursuant to the provisions of the Plan on Exercise or surrender of Options or upon Grants; |
| • | To change the Option Exercise Price; |
| • | To extend the maximum period during which Grants may be made under the Plan; |
| 16.2 | Without prejudice to the above, the Board, without any reference to or consent of the Employee concerned, amend the Plan or Grant or any Agreement to comply with any laws, regulations or guidelines, which is or may hereinafter, become applicable to this |
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
ARTICLE 17
OTHERS
| 17.1 | No Right to a grant |
Neither the adoption of the Plan nor any action of the Compensation Committee shall be deemed to give an Employee any right to be granted an Option to purchase Common Stock, to receive a Grant or to any other rights hereunder except as may be evidenced by an Option Agreement duly executed on behalf of the Company, and then only to the extent of and on the terms and conditions expressly set forth therein
| 17.2 | No Employment Rights Conferred |
Nothing contained in the Plan or in any grant made hereunder shall:
| i. | confer upon any employee any right with respect to continuation of employment with the Company, or |
| ii. | interfere in any way with the right of the Company or its subsidiary to terminate employment or services of any employee at any time. |
| 17.3 | No Restriction on Change in Capital Structure or Corporate Action |
Nothing contained in the Plan shall be construed to prevent the Company from taking any Corporate Action which is deemed by the Company to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any future Grant under the Plan. No Employee, beneficiary or other person shall have any claim against the Company as a result of such action.
| 17.4 | Taxation |
All taxation will be to the employee’s account. The Company shall have the right to deduct, in connection with all Grants, any taxes, required by law to be deducted at source and to require any payments necessary to enable it to satisfy such obligations.
The holder of Shares will authorize the Company to sell such number of Shares as would be necessary to discharge the obligation in the respect of tax deduction at source and appropriate the proceeds thereof on behalf of the employee.
| 17.5 | Confidentiality |
The Employee shall ensure complete confidentiality in respect of all documents, matters and discussions in relation to the Plan, Grant, the Option Agreement or any connected matter. Any violation may result in cancellation of Grant or compulsory retransfer of Shares to a nominee as the Compensation Committee may deem fit without prejudice to the other action which may be taken in this regard.
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
| 17.6 | Insider Trading |
The Employee shall ensure that there is no violation of:
| i. | Insider Trading Regulations of the country and/ or the recognised Stock Exchange on which the shares of the Company are listed or any local laws, rules or regulations applicable to the Company. |
| ii. | Other applicable restrictions for prevention of Fraudulent and/ or Unfair Trade Practices relating to the securities market. |
The Compensation Committee shall be entitled to frame such rules and regulations as may be necessary to ensure that there is no violation of the above referred regulations.
The employee shall keep the Company, the Board, and the Compensation Committee, fully indemnified in respect of any liability arising for violation of the above provisions.
| 17.7 | New Plans |
Nothing contained in the Plan shall be construed to prevent the Company directly or through any trust settled by Company, from implementing any other new Employee Ownership Plan which is deemed by the Company to be appropriate or in its best interest, whether or not such other action would have any adverse impact on the Plan or any Grant made under the Plan. No Employee or other person shall have any claim against the Company and/or trust as a result of such action.
| 17.8 | Notice and Correspondences |
Any notice required to be given by, or any correspondence from, an employee to the Company / Compensation Committee, may be given at the Company’s principal office, or such other address as may be notified in writing.
| 17.9 | Disputes/Issues |
Any disputes or differences of any nature arising hereunder shall be referred to the Compensation Committee and its decision shall be final and binding in all respects. If the members of the Compensation Committee are evenly divided on any issue, then the Chairman of the Compensation Committee shall have a second or casting vote.
| 17.10 | Information to Employees |
Grantees under the Plan shall be informed about the value of share, as and when carried out by the Company / Compensation Committee, at the sole discretion of the Company / Compensation Committee.
| 17.11 | Governing Laws |
The Plan shall by construed in accordance with the laws of Mauritius and other applicable laws. The shares issued pursuant to this Plan shall be governed by the Corporate and Securities Laws of the Mauritius and in a case where the Shares are listed on a stock exchange in a country other than Mauritius, the laws of the country / stock exchange in which the Shares are listed shall also apply.
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Azure Power Global Limited
Azure Power Global Limited ESOP Plan 2015
SIGNED BY THE WITHINNAMED
Directors of Azure Power Global Limited
1) Inderpreet Singh Wadhwa, Director
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