EXHIBIT 10.1
INFOSYS TECHNOLOGIES LIMITED
1998 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Plan are to attract and
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retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, and to promote the success of
the Company's business through the grant of Options.
2. Definitions. As used herein, the following definitions shall apply:
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(a) "Administrator" means the Board or any of its Committees as shall
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be administering the Plan in accordance with Section 4 hereof.
(b) "Applicable Laws" means the legal requirements relating to stock
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option plans, 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
Options are, or will be, granted under the Plan.
(c) "ADR" shall mean an American Depositary Receipt evidencing
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American Depositary Share(s) corresponding to Share(s).
(d) "ADS" shall mean an American Depositary Share corresponding to
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Share(s).
(e) "Board" means the Board of Directors of the Company.
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(f) "Code" means the United States Internal Revenue Code of 1986, as
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amended.
(g) "Committee" means a committee of Directors appointed by the Board
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in accordance with Section 4 hereof.
(h) "Company" means Infosys Technologies Limited, a company
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incorporated under the laws of India.
(i) "Director" means a member of the Board.
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(j) "Disability" means total and permanent disability as defined in
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Section 22(e)(3) of the Code.
(k) "Employee" means any person, including officers and Directors,
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employed by the Company or any Parent or Subsidiary of the Company. An Employee
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(l) "Fair Market Value" means the value for one ADS, as reported on
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any established stock exchange or market system, on the day of determination.
(m) "Incentive Stock Option" means an Option intended to qualify as an
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incentive stock option within the meaning of Section 422 of the Code.
(n) "Nonstatutory Stock Option" means an Option not intended to
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qualify as an Incentive Stock Option.
(o) "Option" means a stock option granted pursuant to the Plan.
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(p) "Option Agreement" means a written or electronic agreement between
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the Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of
the Plan.
(q) "Optioned Stock" means the ADSs subject to an Option.
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(r) "Optionee" means the holder of an outstanding Option granted under
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the Plan.
(s) "Parent" means a "parent corporation," whether now or hereafter
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existing, as defined in Section 424(e) of the Code.
(t) "Plan" means this 1998 Stock Option Plan.
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(u) "Share" means an Equity Share of the Company, as adjusted in
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accordance with Section 11 of the Plan.
(v) "Subsidiary" means a "subsidiary corporation," whether now or
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hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
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the Plan, the maximum aggregate number of Shares which may be subject to option
and sold under the Plan (in the form of ADSs) is 800,000 Shares. The Shares may
be authorized but unissued, or reacquired.
If an Option 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
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under the Plan (unless the Plan has terminated). However, Shares that have
actually been issued under the Plan upon exercise of an Option, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.
4. Administration of the Plan.
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(a) Administrator. The Plan shall be administered by the Board or a
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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
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Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion:
(i) to determine Fair Market Value;
(ii) to select the Employees to whom Options may from time to
time be granted hereunder;
(iii) to determine the number of ADSs to be covered by each such
Option granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option granted hereunder;
(vi) to determine whether and under what circumstances an Option
may be settled in cash under subsection 9(d) instead of ADSs;
(vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws; and
(viii) to construe and interpret the terms of the Plan and Options
granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All decisions, determinations
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and interpretations of the Administrator shall be final and binding on all
Optionees.
5. Eligibility.
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(a) Options may be granted only to Employees.
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(b) Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option.
(c) Neither the Plan nor any Option shall confer upon any Optionee any
right with respect to continuing the Optionee's relationship as an Employee with
the Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate such relationship at any time, with or without
cause.
(d) The following limitations shall apply to grants of Options:
(i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 400,000 ADSs.
(ii) In connection with his or her initial service, an Employee
may be granted Options to purchase up to an additional 400,000 ADSs which
shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 11.
(iv) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 11), the canceled Option will be counted against the limits
set forth in subsections (i) and (ii) above. For this purpose, if the exercise
price of an Option is reduced, the transaction will be treated as a cancellation
of the Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon its adoption by
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the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be stated in the Option
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Agreement; provided, however, that the term shall be no more than ten (10) years
from the date of grant thereof.
8. Option Exercise Price and Consideration.
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(a) The per ADS exercise price for the ADSs to be issued upon exercise
of an Option 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
be less than 90% of Fair Market Value on the date of grant. Notwithstanding the
foregoing, Options 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, including the method of payment, shall be determined by
the Administrator at the time of
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grant. Such consideration may consist of (1) cash, (2) check, (3) promissory
note, (4) other ADSs which (x) in the case of ADSs acquired upon exercise of an
Option, 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 shall be
exercised, (5) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan, 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 the
Company.
9. Exercise of Option.
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(a) Procedure for Exercise; Rights as a Shareholder. Any Option
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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 Agreement. Unless the Administrator provides otherwise, the
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of an ADS.
An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the ADSs with respect to which the Option is exercised. Full payment
may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. ADSs issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the ADSs are issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), 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. The Company
shall issue (or cause to be issued) such ADSs promptly after the Option 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 Plan.
(b) Termination of Relationship as an Employee. If an Optionee ceases
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to be an Employee, such Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of the Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option 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, the Shares underlying the ADSs covered by the unvested portion of the
Option shall again become available for issuance under the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
underlying the ADSs covered by such Option shall again become available for
issuance under the Plan.
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(c) Death or Disability of Optionee. If an Optionee dies while an
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Employee, or ceases to be an Employee as a result of the Optionee's disability,
the vesting and exercisability of the Option shall accelerate in full and the
Option may be exercised within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of death (but in
no event later than the expiration of the term of such Option as set forth in
the Option Agreement) by the Optionee or Optionee's estate or by a person who
acquires the right to exercise the Option by bequest or inheritance. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares underlying the ADSs covered by such Option shall again
become available for issuance under the Plan.
(d) Buyout Provisions. The Administrator may at any time offer to buy
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out for a payment in cash or Shares, an Option 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 Options. The Options may not be sold, pledged,
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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.
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(a) Changes in Capitalization. Subject to any required action by the
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shareholders of the Company, the number of ADSs covered by each outstanding
Option, and the number of Shares (in the form of ADSs) which have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per ADS covered by each such outstanding
Option, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, 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 the Company. The conversion of any convertible securities of
the Company 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 the Company 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.
(b) Dissolution or Liquidation. In the event of the proposed
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dissolution or liquidation of the Company, 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 until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including ADSs
as to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company
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repurchase option applicable to any ADSs purchased upon exercise of an Option
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 will terminate
immediately prior to the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company
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with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
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, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including ADSs
as to which it would not otherwise be vested or exercisable. If an Option
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 shall be fully exercisable
for a period of fifteen (15) days from the date of such notice, and the Option
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger or
sale of assets, the option confers the right to purchase or receive, for each
ADS subject to the Option 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, for each ADS subject to the Option, 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 Options. The date of grant of an Option shall, for
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all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee to whom an Option is
so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
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(a) Amendment and Termination. The Board may at any time amend,
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alter, suspend or terminate the Plan.
(b) Shareholder Approval. The Board shall obtain shareholder approval
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of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
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suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise
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between the Optionee and the Administrator, which agreement must be in writing
and signed by the Optionee and the Company. Termination of the Plan shall not
affect the Administrator's ability to exercise the powers granted to it
hereunder with respect to Options granted under the Plan prior to the date of
such termination.
14. Conditions Upon Issuance of ADSs.
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(a) Legal Compliance. ADSs shall not be issued pursuant to the
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exercise of an Option unless the exercise of such Option and the issuance and
delivery of such ADSs shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of an
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Option, the Administrator may require the person exercising such Option 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 the Company, such a
representation is required.
15. Inability to Obtain Authority. The inability of the Company to obtain
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authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any ADSs hereunder, shall relieve the Company 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. The Company, during the term of this Plan,
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shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
17. Shareholder Approval. The Plan shall be subject to approval by the
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shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the degree and manner
required by Applicable Laws.
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APPENDIX A
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Rules for U.S. Option Grants
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The following additional rules shall apply in the case of Option grants to
U.S. residents.
1. $100,000 Rule Limitation. Notwithstanding a designation of Options as
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an Incentive Stock Options, to the extent that the aggregate Fair Market Value
of the ADSs with respect to which Incentive Stock Options are exercisable for
the first time by an Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds U.S. $100,000, such Options shall
be treated as Nonstatutory Stock Options. For these purposes, Incentive Stock
Options shall be taken into account in the order in which they were granted.
The Fair Market Value of the ADSs shall be determined as of the time the Option
with respect to such ADSs is granted.
2. Term of Option. Notwithstanding Section 7 of the Plan, in the case of
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an Incentive Stock Option granted to an Optionee who, at the time the Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Option shall be five (5) years from the date of grant or such shorter term
as may be provided in the Option Agreement.
3. Option Exercise Price.
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(a) In the case of an Incentive Stock Option
(i) granted to an Employee who, at the time of grant of such
Option, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company 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 Employee, 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, the per ADS exercise
price shall be determined by the Administrator; provided, however, that in the
case of an Option 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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1998 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.
I. NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to purchase ADSs of the Company, subject to
the terms and conditions of the Plan and this Option Agreement, as follows:
Grant Number ____________________________________
Date of Grant ____________________________________
Vesting Commencement Date ____________________________________
Exercise Price per ADS $___________________________________
Total Number of ADSs Granted ____________________________________
Total Exercise Price $___________________________________
Type of Option: ___ Incentive Stock Option
___ Nonstatutory Stock Option
Term/Expiration Date: ____________________________________
Vesting Schedule:
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This Option may be exercised, in whole or in part, in accordance with the
following schedule:
[___% of the ADSs subject to the Option shall vest __________ months after
the Vesting Commencement Date, and ______% of the ADSs subject to the Option
shall vest each _______ thereafter, subject to the Optionee continuing to be an
Employee on such dates].
Termination Period:
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Subject to Applicable Laws, this Option may be exercised for _____
[days/months] after Optionee ceases to be a service provider. Subject to
Applicable Laws, upon the death or Disability of the Optionee, this Option may
be exercised for one year after Optionee ceases to be a service provider. In no
event shall this Option be exercised later than the Term/Expiration Date as
provided above.
II. AGREEMENT
A. Grant of Option.
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The Plan Administrator of the Company hereby grants to the Optionee named
in the Notice of Grant attached as Part I of this Agreement (the "Optionee") an
option (the "Option") to purchase the number of ADSs, as set forth in the Notice
of Grant, at the exercise price per share set forth in the Notice of Grant (the
"Exercise Price"), subject to the terms and conditions of the Plan, which is
incorporated herein by reference. Subject to Section 13(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms
and conditions of this Option Agreement, the terms and conditions of the Plan
shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
this Option is intended to qualify as an Incentive Stock Option under Section
422 of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d)
it shall be treated as a Nonstatutory Stock Option ("NSO").
B. Exercise of Option.
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(a) Right to Exercise. This Option is exercisable during its term in
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accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of
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an exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of ADSs in
respect of which the Option is being exercised (the "Exercised ADSs"), and
such other representations and agreements as may be required by the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the Chief Financial Officer of the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised ADSs. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.
No ADSs shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised ADSs shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised ADSs.
C. Method of Payment.
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Payment of the aggregate Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Optionee:
1. cash; or
2. check; or
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3. consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan; or
4. surrender of other ADSs which (i) in the case of ADSs acquired
upon exercise of an option, have been owned by the Optionee for more than six
(6) months on the date of surrender, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised ADSs.
D. Non-Transferability of Option.
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This Option may not be transferred in any manner otherwise than by will or
by the laws of descent or distribution and may be exercised during the lifetime
of Optionee only by the Optionee. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
E. Term of Option.
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This Option may be exercised only within the term set out in the Notice of
Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option Agreement.
F. U.S. Federal Tax Consequences.
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Some of the U.S. federal tax consequences relating to this Option, as of
the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE ADSs.
G. Exercising the Option.
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1. Nonstatutory Stock Option. The Optionee may incur regular U.S.
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federal income tax liability upon exercise of a NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
ADSs on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver ADSs if such withholding amounts are not
delivered at the time of exercise.
2. Incentive Stock Option. If this Option qualifies as an ISO, the
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Optionee will have no regular U.S. federal income tax liability upon its
exercise, although the excess, if any, of the Fair Market Value of the
Exercised ADSs on the date of exercise over their aggregate Exercise Price
will be treated as an adjustment to alternative minimum taxable income for
federal tax purposes and may subject the Optionee to alternative minimum tax
in the year of exercise. In the event that the Optionee ceases to be an
Employee but remains a service provider, any Incentive Stock Option of the
Optionee that remains unexercised shall cease to qualify as an Incentive Stock
Option and will be
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treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.
3. Disposition of ADSs.
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(a) NSO. If the Optionee holds NSO ADSs for at least one year,
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any gain realized on disposition of the ADSs will be treated as long-term
capital gain for U.S. federal income tax purposes.
(b) ISO. If the Optionee holds ISO ADSs for at least one year
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after exercise and two years after the grant date, any gain realized on
disposition of the ADSs will be treated as long-term capital gain for federal
income tax purposes. If the Optionee disposes of ISO ADSs within one year
after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the lesser of (A) the
difference between the Fair Market Value of the ADSs acquired on the date of
exercise and the aggregate Exercise Price, or (B) the difference between the
sale price of such ADSs and the aggregate Exercise Price. Any additional gain
will be taxed as capital gain, short-term or long-term depending on the period
that the ISO ADSs were held.
(c) Notice of Disqualifying Disposition of ISO ADSs. If the
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Optionee sells or otherwise disposes of any of the ADSs acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii)
one year after the exercise date, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she may
be subject to U.S. income tax withholding by the Company on the compensation
income recognized from such early disposition of ISO ADSs by payment in cash
or out of the current earnings paid to the Optionee.
H. Entire Agreement; Governing Law.
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The Plan is incorporated herein by reference. The Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
California, United States.
I. NO GUARANTEE OF CONTINUED SERVICE.
---------------------------------
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF ADSs PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT
THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
AN OPTION OR PURCHASING ADSs HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
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OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP
AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.
By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.
OPTIONEE: INFOSYS TECHNOLOGIES LIMITED
______________________________ ________________________________
Signature By
______________________________ ________________________________
Print Name Title
______________________________ ________________________________
Residence Address
______________________________
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EXHIBIT A
---------
1998 STOCK OPTION PLAN
EXERCISE NOTICE
INFOSYS TECHNOLOGIES LIMITED
Electronics City, Hosur Road
Bangalore, Karnataka
India 561 229
Attention: Chief Financial Officer
1. Exercise of Option. Effective as of today, ________________, _____,
------------------
the undersigned ("Purchaser") hereby elects to purchase ______________ ADSs
(the "ADSs") of Infosys Technologies Limited (the "Company") under and
pursuant to the 1998 Stock Option Plan (the "Plan") and the Stock Option
Agreement dated, _____ (the "Option Agreement"). The purchase price for the
ADSs shall be $____________, as required by the Option Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
-------------------
full purchase price for the ADSs.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
----------------------------
has received, read and understood the Plan and the Option Agreement and agrees
to abide by and be bound by their terms and conditions.
4. Rights as Shareholder. Until the issuance (as evidenced by the
---------------------
appropriate entry on the books of the Company or of a duly authorized transfer
agent or depositary of the Company) of the ADSs, no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned ADSs, notwithstanding the exercise of the Option. The ADSs so
acquired shall be issued to the Optionee as soon as practicable after exercise
of the Option. No adjustment will be made for a dividend or other right for
which the record date is prior to the date of issuance, except as provided in
Section 11 of the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
----------------
adverse tax consequences as a result of Purchaser's purchase or disposition of
the ADSs. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the ADSs and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Option Agreement are
-------------------------------
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except
by means of a writing
signed by the Company and Purchaser. This agreement is governed by the
internal substantive laws, but not the choice of law rules, of California,
United States.
Submitted by: Accepted by:
PURCHASER: INFOSYS TECHNOLOGIES LIMITED
_________________________________ _________________________________
Signature By
_________________________________ _________________________________
Print Name Its
Address: Address:
- ------- -------
_____________________________ Infosys Technologies Limited
_____________________________ Electronics City, Hosur Road
_____________________________ Bangalore, Karnataka
_____________________________ India 561 229
_____________________________
Date Received
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