Executive Employment Agreement - Satyam Infoway Ltd. and Rahul Swarup
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is entered into in Chennai
India on 20th February, 2002 between:
1. Satyam Infoway Limited ("Sify") a company incorporated in India and having
its principal office at Tidel Park 2nd floor, 4 Canal Bank road, Taramani,
Chennai 600 113 India and
2. Mr. Rahul Swarup ("Executive") residing at B-305, DBS Atrium, 49,
Kalakshetra Road, Thiruvanmiyur, Chennai -- 600 041.
The operations of Sify and its affiliates are a complex matter requiring
direction and leadership in a variety of areas including strategic planning,
financial, regulatory, community relations and others. Executive is currently
employed as Sify's President -- Enterprise Solutions. Considering the current
status of Sify's operation, Sify desires that the Executive should continue in
the employment of Sify and has requested the Executive to continue as its
President -- Enterprise Solutions and the Executive has agreed to do so subject
to the terms and conditions contained herein .
Sify and the Executive agree as follows:
1. Sify would continue to employ the Executive as its President -- Enterprise
Solutions. Executive agrees to continue such employment. The position is
based in Chennai, India. This agreement shall be valid for an initial
period of Three (3) years from 20.02.2002 till 20.02.2005.
2. During the term of employment the Executive shall:
a. Observe and comply with the policies of Sify
b. Serve Sify faithfully, diligently and competently to the best of his
ability.
c. Report to the President & COO
d. Serve, without further compensation, as Director of one or more of
Sify's affiliates as desired by Sify
3. During the term of employment the Executive shall not, without prior
written consent of Sify's Board of Directors:
a. Accept any other employment with a third party
b. Serve on the Board of Directors or any similar body of any other
business entity
c. Engage directly or indirectly in any other business activity that
competes with the business of Sify and its affiliates. (Affiliates
mean and include businesses in which Sify has an equity or debt stake
in excess of 5% of the capital of such business).
4. During the term of employment the Executive shall be entitled to following
"compensation and benefits" (all subject to deduction of tax as per
applicable law):
a. "Base salary" as set out in Annexure A which includes Salary,
allowances, benefits and perquisites or as amended with mutual consent
from time to time
b. "Performance bonus" as set out in Annexure B which is a variable pay
linked to performance or as amended with mutual consent from time to
time
c. Vacation/leave as per Sify's policy for Employees
d. Reimbursement of business expenses incurred on Sify's behalf as per
Sify's policy for business expenses incurred by Employees
5. Executive acknowledges that because of his employment, he is in a
confidential relationship with Sify and has access to confidential
information and trade secrets of Sify. Confidential information or trade
secrets include all information relating to customers, business
strategies/plans, business investments, marketing plans/techniques,
business operation methods/practices etc. Executive agrees that such
confidential information or trade secrets shall not be disclosed by him to
any third party except when mandated by law and shall not be used by him
for any purpose except in the performance of his work for Sify.
<PAGE>
6. Executive agrees that all work of a copyrightable or patentable nature
done in the course of work for Sify belong to Sify and undertakes to help
in every way to get Sify's ownership of such copyrights/patents duly
registered.
7. This agreement terminates on the expiry of the term of this agreement
unless both parties agree to renew it three months before the expiry of
this agreement. This agreement may be terminated before the expiry of the
agreement only as under and subject to the consequences provided
hereunder:
a. Termination of the Agreement by the Executive for following "Good
reasons":
i. Sify breaching its obligations in paying compensation
ii. Sify changing the location of the office of the Executive from
Chennai
iii. Within six months after Occurrence of a Change of control
except if joining Satyam Computer Services Limited
b. Termination of the Agreement by Executive without assigning any
reason.
c. Termination by Sify
d. Death of the Executive
The parties agree that "Change of Control" means and includes:
a. Change in ownership structure of Sify from that prevalent on the date
Executive commenced services with Sify or any date thereafter whereby
any person or group of persons or entity or group of entities acquire
in one or more transactions (i) beneficial ownership in Sify, directly
or indirectly, in excess of 25% of the outstanding equity shares and
becomes the largest group owning stock/shares in Sify or (ii) ability
to command majority voting rights in Sify's Board of Directors
b. Sale or divestment (including through mergers, demergers,
consolidations, acquisitions) of a substantial part of the assets or
business of Sify whereby the majority owners of Sify prior to such
sale/divestment don't receive majority ownership in the acquiring
entity.
8. In the event of death of the Executive, termination is effective on the
date of death. In all other instances of termination before expiry of the
agreement, both parties agree to give a written notice to the other of
intent to terminate the Agreement and the termination is effective three
(3) months after the notice is received.
9. Executive is entitled to full compensation and benefits (excluding the
performance bonus) up to the date of termination of the Agreement.
Executive is entitled to pro rated performance bonus up to the date of
termination of the Agreement in the event termination notice is served by
Executive for "Good reasons" or served by Sify within one year after
Change of Control.
10. Executive is entitled following additional terminal compensation of Base
salary (as referred to in Clause 4a) in the event of termination by Sify
for any reason or by Executive for Good Reasons:
a. If notice of termination is served within 1 year from the date of this
agreement or 1 year after a change of Control, 6 months Base salary
b. In all other circumstances, 3 months Base salary
<PAGE>
11. Executive has been provided by Sify a loan of Rs. 50 lakhs which is
repayable by the Executive with interest on 31st December, 2002. In
consideration of the Executive agreeing to continue in the employment of
Sify as aforesaid, Sify agrees to pay the Executive an Additional
Compensation sufficient to repay the loan (income tax to Executive's
account) and an Additional Compensation sufficient to pay the interest
(income tax to Sify's account), at the earliest of the following
circumstances:
a. On the loan falling due for repayment
b. On the occurrence of a Change of Control
c. On the death of the Executive
(such Additional Compensation referred above shall be reduced by the
value as on the date of such Additional Compensation of specified
market liquid stock options granted before 31.12.2000, vested until
that date).
12. This Agreement is subject to the laws of India.
13. It is the intent of both the parties to render this agreement enforceable
to the fullest extent permitted by law. Any clause that turns out to be
invalid should not render the entire agreement invalid.
For Satyam Infoway Limited
Mr. R. Ramaraj Mr. Rahul Swarup
Managing Director & CEO President -- Enterprise Solutions
<PAGE>
EXECUTIVE EMPLOYMENT AGREEMENT
ANNEXURE A BASE SALARY
<TABLE>
<S> <C> <C>
Salary:
Basic salary Rs. per annum 15,00,000.00
Special allowance 16,66,824.00
House Rent allowance Company Leased
Perquisites/benefits:
Provision of Company car Yes
Conveyance expenses 72,000.00
Driver's salary 42,000.00
Vehicle maintenance expenses 24,000.00
Medical expenses 15,000.00
Leave travel expenses 1,25,000.00
Provident fund contribution 1,80,000.00
Gratuity 60,000.00
Total Base Salary Rs. per annum 36,84,825.00
ANNEXURE B PERFORMANCE BONUS
Bonus payable on accomplishment of
KRA/KPI Rs. per annum 15,00,000.00
</TABLE>