Sudarshan Chemical Industries : Draft of Amended ESOP 2018

Sudarshan Chemical Industries Limited (SCIL)

DraŌ of Amended Sudarshan Employee Stock OpƟon Plan 2018

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

	SUDARSHAN CHEMICAL INDUSTRIES LIMITED
	SUDARSHAN EMPLOYEE STOCK OPTION PLAN 2018
1	Name of the Plan	3
2	Purpose of the Plan	3
3	Definitions	3
4	Eligibility	7
5	Administration of this Plan	7
6	Share Pool	9
7	Grant of Options	9
8	Method of acceptance	10
9	Vesting of Options	10
10	Exercise Price	11
11	Exercise of Options/ Allotment of Shares	11
12	Termination of Employment	14
13	Notices and correspondence	15
14	Lock-in	15
15	Beneficiary/ Nominee designation	15
16	Non-transferability of Options	15
17	Transferability of Shares	16
18	Corporate Actions	16
19	Withholding Tax or any other Sums	16
20	Arbitration	16
21	Tenure	17
22	Governing Law	17
23	Regulatory approvals	17
24	Modification of Plan	18
25	Miscellaneous provisions	18
26	Set-off	19
27	Severability	20
29	Confidentiality	20
30	Covenants of the Grantee	20

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

1. Name of the Plan
   This Plan shall be termed as Sudarshan Chemical Industries Limited or Sudarshan Employee Stock Option Plan 2018 ("Plan or ESOP 2018"). The Plan has been approved by a special resolution passed on 9th August 2018 at the General Meeting of the Company. The Plan shall be effective from 9th August 2018 herein after referred to as the "Effective Date".
   Further, ESOP 2018 has been modified in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, and has been ratified by the shareholders of the Company on [●].
   This document sets out the terms and conditions of the Plan.
2. Purpose of the Plan
   Sudarshan Chemical Industries Limited ("Company" or "SCIL"), a company incorporated under the Companies Act, 1913 and validly existing under the Companies Act, 2013 and having its registered office at 7th Floor, Eleven West Panchshil, Survey No. 25, Near PAN Card Club Road, Baner, Pune - 411 069, Maharashtra India has structured this Plan for its Employees. The objectives of this Plan are as under:
3. 1. Drive performance and corporate strategy
   2. Retention of employees
   3. Employee ownership
   4. Hiring practice
   5. Sustainable implementation of strategy
   6. Wealth creation for employees
   7. Meritocracy
   8. Rewarding loyalty
4. Definitions

In this Plan, except where the context otherwise requires, the following expressions or terms shall have the meanings indicated there against:

1. "Abandonment" means discontinuation of employment by a Grantee without giving notice or without serving the notice period;
2. "Acceptance Form" shall mean the form that the Grantee has to submit indicating his acceptance of the offer made to him to participate in the Plan within the prescribed time limit specified in the respective Scheme(s);
3. "Applicable Laws" shall mean laws of India to the extent applicable and as amended, modified and substituted from time to time. Accordingly, any actions taken hereunder shall be governed by and construed in accordance with the laws of India, without regard to the application of the conflicts of laws' provisions thereof;
4. "Associate Company(ies)" means the present or future associate companies of the Company in accordance with the provisions of the Applicable Laws.
5. "Beneficiary" or "Nominee" means the person or persons, trust or trusts designated by the Participant, or in the absence of any designation by the Participant, a person or persons who is/are entitled by the will or probate of the Participant to receive the benefits specified in the Plan, the legal heirs of the Participant, if the Participant dies intestate and includes the Participant's executors or administrator, if no other Beneficiary is designated and able to act under the circumstances and

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

such other persons as may be added from time to time to the class of beneficiaries by notice in writing and by the Nomination Form in the exercise of any powers conferred under the Plan or any other agreements forming part thereof;

1. "Bad Leaver" shall have meaning as defined in the HR Policy of the Company which is reproduced below:
   Employee is considered to be Bad Leaver if employee leaves the company for any reason other than those set out in the definition of good leaver. So, for example, a bad leaver may be someone -
2. • Dismissed or otherwise terminated, due to breach of the employment agreement or contract
   • Leaving the company voluntarily (other than retiring) to work elsewhere before expiry of a pre- agreed period of time
   • Non - compliance with Company's Code of Conduct and corporate governance standards
   • Any circumstance where it's not a good leaver
3. "Board" means the Board of Directors of the Company and includes the Nomination and Remuneration Committee of the Board for the purpose of administration and superintendence of this Plan;
4. "Closing Date" means the last date on which the offer of Options by the Company to a Grantee can be accepted. In case the last date is a non-working day, then it shall be the immediately following working day;
5. "Company" shall mean Sudarshan Chemical Industries Limited, a company incorporated and registered under the Companies Act, 1913 and validly existing under the Companies Act, 2013 having its registered office at 7th Floor, Eleven West Panchshil, Survey No. 25, Near PAN Card Club Road, Baner, Pune, Maharashtra, India, 411069;
6. "Committee or Nomination and Remuneration Committee" means the Compensation Committee as constituted by the Board for administration and superintendence of the ESOP schemes and shall comprise of a majority of independent directors in accordance with Companies Act, 2013;
7. "Corporate Action" shall mean issuance of Equity Shares in dematerialized form with any of the Depositories as defined under Depositories Act, 1996, pursuant to any corporate event including but not limited to events prescribed under Clause 18;
8. "Director" means a director appointed to the Board of a Company;
9. "Eligible Employee" for the purpose of this Plan means the identified Employee(s) as per Clause 4;
10. "Employee" means

1. a permanent employee of the Company who has been working in India or outside India; or
2. a director of the Company, whether a whole-time director or not but excluding an independent director or
3. an employee as defined in clauses (a) or (b) of a subsidiary, in India or outside India, or of a Holding Company and / or Associate company of the company;

but does not include-

1. an employee who is a promoter or a person belonging to the promoter group; or
2. a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the Company;

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

1. "Exercise" means making of an application by the Participant/ Beneficiary to the Company for issue of Shares, against Vested Options in pursuance of the Plan on payment of Exercise Price;
2. "Exercise Date" means the date on which the Participant/ Beneficiary exercises his Vested Options and in case of partial Exercise, shall mean each date on which the Participant/ Beneficiary exercises part of the Vested Options;

3.17 "Exercise Period" means the time period after Vesting within which the Participant/Beneficiary should Exercise his right to apply for Shares against the Vested Option in pursuance of the Plan;

1. "Exercise Price" means the price, if any, payable by the Employee for exercising the Vested Options granted to him in pursuance of the Plan;
2. "General Meeting" means a General Meeting (including an Extraordinary General Meeting) of the Shareholders of the Company held in accordance with the Articles of Association of the Company and the Applicable Laws;
3. "Good Leaver" shall have meaning as defined in the HR Policy of the Company which is reproduced below:
   Employee is considered to be Good Leaver if the individual is ceased to be an employee of Sudarshan, at any time, as a result of:
4. • Death
   • Permanent incapacity
   • Retirement (Retirement age as per Sudarshan policy)
   • Voluntarily retires from employment after a pre-agreed period of time
   • Termination of his employment by the Sudarshan where there is no breach of the employment agreement or contract, wrongful or constructive dismissal by the company. The first 3 instances are considered as involuntary event that brings an end to contract of employment and triggers a Good Leaver event.

3.21 "Grant" means the process by which the Company/Committee issues Options under the Plan;

1. "Grant Date" means the date on which the Options are approved and granted to the Grantee by the Company/ Committee under the Plan;
2. "Grant Letter" means the letter by which Grant of an Option is communicated to the Grantee;
3. "Grantee" shall mean an Eligible Employee pursuant to Clause 4 below, who at the time of Grant of the Option is eligible to participate under the Plan;
4. Group"means two or more companies which, directly or indirectly, are in a position to -
5. 1. exercise twenty-six per cent or more of the voting rights in the other company; or
   2. appoint more than fifty per cent of the members of the board of directors in the other company; or
   3. control the management or affairs of the other company;
6. "Holding Company" shall have the meaning as defined under the Companies Act, 2013;
7. "Independent Director" means director designated as such and as defined under Section 2(47) of the Companies Act, 2013.

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

3.28 "Option" means the Option given to an Employee which gives him a right, but not an obligation to purchase or subscribe at a future date, the Shares offered by the Company, directly or indirectly, at a pre-determined price;

1. "Participant" means a Grantee who accepts the Grant from the Company/Committee to participate in this Plan pursuant to Clause 8 below;
2. "Permanent Disability" means any disability of whatsoever nature, be it physical, mental or otherwise, which incapacitates or prevents or handicaps an Employee from performing any specific job, work or task which the said Employee was capable of performing immediately before such disablement, as determined by the Board based on a certificate of a medical expert identified by the Board;
3. "Plan" shall mean the Sudarshan Chemical Industries Limited Employee Stock Option Plan 2018 under which the Company grants the Options to the Grantees, and shall include any alterations, amendments, additions, deletions, modifications, or variations thereof from time to time.;
4. "Promoter" means promoter as defined under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018;
5. "Promoter Group" means promoter group as defined under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018;
6. "Recognized Stock Exchange" means recognized stock exchange as defined under Securities Contracts (Regulation) Act, 1956;
7. "Relative" means relative defined under the Companies Act 2013;
8. "Retirement" means retirement as per the rules of the Company;
9. "SEBI Regulations" refers to Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 issued by the Securities and Exchange Board of India ('SEBI') under the SEBI Act, 1992 as amended from time to time;
10. "Share" means an equity share of the Company of face value of Rs 2 each;
11. "Shareholder" means the registered holder of a Share in the share capital of the Company;
12. "Subsidiary Company" shall have the meaning as defined under the Companies Act, 2013;
13. "Termination Date" means the date of termination of employment of the Participant/ Grantee with the Company;
14. "Unvested Option" means an Option, which is not a Vested Option but does not include Options which are unexercised on the expiration of the Vesting Period, or have been forfeited or have lapsed or been cancelled;
15. Vested Option" means an Option, which has Vested in pursuance of Clause 9 below with the Participant/ Beneficiary and has thereby become exercisable;
16. "Vesting" means the process by which the Participant/ Beneficiary is entitled to apply for Shares against the Option granted to him in pursuance of Clause 9 below;
17. "Vesting Date" means the respective dates on and from which the Option Vests with the Participant/ Beneficiary and thereby becomes exercisable under clause 11 of this Plan;
18. "Vesting Period" means the period during which the vesting of Option granted in pursuance of the Plan takes place ;

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

3.47 "Construction"

1. Clause reference is to the clauses of this Plan.
2. The headings/ subheadings/ titles/ subtitles are only for the sake of convenience and shall not be interpreted to restrict or otherwise affect the meaning or import of the clauses, which shall be interpreted solely in light of the contents thereof.
3. Where a word or phrase is defined, other parts of speech and grammatical forms of that word or phrase shall have the corresponding meanings.
4. Any reference to 'writing' includes printing, typing, lithography and other means of reproducing words in visible form.
5. The term 'including' shall mean 'including without limitation', unless otherwise specified.
6. Reference to any Act, Rules, Statute or Notification shall include any statutory modification, substitution or re-enactment thereof.
7. Unless the context otherwise requires, words denoting the masculine gender shall include the feminine gender and words denoting singularity shall include the plural and vice versa.

4 Eligibility

4.1 Subject to Clause 3.14, the eligibility to participate in the Plan is subject to such criteria as may be decided by the Board/ Committee at its own discretion, including, but not limited to the date of joining of the Employee with the Company, the Subsidiary Company(ies) or Associate Company (ies), grade of the Employee, performance evaluation, period of service with the Company, criticality or any other criteria, as the Committee determines.

5 Administration of this Plan

1. This Plan shall be administered by the Committee working under the powers delegated by the Board. The Board/ Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations that it deems necessary or desirable for the administration and implementation of the Plan. The Board/ Committee may correct any defect, omission or reconcile any inconsistency in the Plan in the manner and to the extent the Committee deems necessary or desirable and to resolve any difficulty in relation to implementation of the Plan and take any action which the Board is entitled to take. The acts of a majority of the members of the Committee present at any meeting (at which the quorum is present) or acts approved in writing by a majority of the entire Committee shall be the acts of the Committee for the purpose of the Plan. No member of the Committee may act upon matters under the Plan specifically relating to such member.
2. Any decision of the Board/ Committee in the interpretation and administration of this Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Employee, Grantee, Participant/ Nominee and their Beneficiaries and successors). The Company/ Board/ Committee shall not be liable for any action or determination made in good faith with respect to the Plan or any Option granted thereunder.
3. The Committee shall, interalia, formulate the detailed terms and conditions of the Plan which shall include the provisions to the extent it is not in violation of the Companies Act 2013 and SEBI Regulations.

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

1. The Committee shall frame suitable policies and procedures to ensure that there is no violation of securities laws, as amended from time to time, including Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to the Securities Market) Regulations, 2003 by the Company, the Trust and its Employees, as applicable.
2. Subject to the provisions of the Plan, the Board shall, inter alia, do the following:
3. 1. Identify the Employees eligible to participate under the Plan;
   2. Determine the quantum of the Options to be granted under the Plan per Eligible Employee and in aggregate;
   3. Identify the Employees eligible to participate under the Plan;
   4. Determine the conditions under which Options vested would lapse for the Participant (in case of termination of employment for Cause);
   5. Determine the Exercise Period within which the Participant should exercise the Option and the period within which the Option should lapse on the failure to exercise the Options within the Exercise Period;
   6. Determine the specified time period within which the Participant shall exercise / surrender the Vested Options in the event of termination or resignation of the Participant;
   7. Determine the right of a Participant to exercise all the Options vested in the Participant at one time or various points in time within the Exercise Period;
   8. Determine the procedure for buy-back of the specified Options if to be undertaken at any time by the Company and the applicable terms and conditions thereof, including:
   9. permissible sources of financing for buy-back,
   10. any minimum financial thresholds to be maintained by the Company as per its last financial statements, and
   11. limits upon quantum of Options that the Company may buy-back in a financial year;
   12. Determine the procedure for making a fair and reasonable adjustment to the number of Options and to the Exercise Price in case of Corporate Actions such as rights issues, bonus issues, merger, sale of division and others.
   13. Determine the Grant, Vesting and Exercise of Options in case of Participants who are on Long Leave;
   14. amend or revise the vesting conditions, schedule, Exercise Period and / or Exercise Price for options granted or other terms and conditions of the Plan.
   15. Determine the procedure for cash less exercise of Options, if decided by the Board.
   16. Decide to pay cash benefit / compensation to the Participant in lieu of the Options already granted to them, whether vested or not, and consequently surrender such respective options for which compensation is paid to the Participant.
   17. To create a trust to manage the Plan for all or any identified part of the options granted under the Plan, if needed
   18. Take any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof
   19. Decide all other matters that must be determined in connection with an Option under the Plan;

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

1. Construe and interpret the terms of the Plan, and the Options granted pursuant to the Plan and approve all forms and documents required to be issued to the Eligible Employees pursuant to the Plan;
2. Administer and reconcile any inconsistency in the Plan; and
3. Perform such other functions and duties as shall be required under the Applicable Laws, including intimation, filing of documents/ application at the requisite authorities, to authorise any director or Company Secretary of the Company perform functions and duties and listing of shares after exercise at Stock Exchanges.

6 Share Pool

1. Subject to Clause 7 below, the maximum number of Shares that may be issued pursuant to Exercise of Options granted to the Participants under this Plan shall not exceed 2% of the paid-up equity share capital of the Company as on the date of passing of the resolution by the shareholders i.e. 9th August, 2018. The Company reserves the right to increase or reduce such number of Shares as it deems fit.
2. The NRC shall decide the number of options / equity shares that may be granted / issued to any specific employee / director of the Company or its Subsidiary Company(ies) or its Associate Company (ies) under the ESOP 2018, in any financial year and in aggregate, but the same shall not exceed 1% of the issued capital in any one financial year.
3. Notwithstanding the foregoing provisions of Clause 6.1, Shares with respect to which an Option is granted under the Plan that remain unexercised at the expiration, or are not entitled for vesting or forfeited or lapsed or cancelled shall be added back to the number of Options that are pending to be granted. The Company may, at their discretion Grant such Options within the overall limit determined in accordance with the Plan.
4. In case of a share-split where the face value of the shares is reduced below Rs. 2.00/- or in case of consolidation of shares or bonus issue, the maximum number of Options available for being granted under the Plan as mentioned in Clause 6.1 shall stand modified accordingly, so as to ensure that the cumulative paid-up value (No. of shares X Face value per share) of the total Shares arising out of Exercise of Options that can be issued remains unchanged.

7 Grant of Options

7.1 The Company/ Committee/ Board may offer the Options to a Grantee who is an Eligible Employee in accordance with the terms and conditions under the Plan for the time being in force. The Committee will decide the number of Options to be granted to each Eligible Employee.

During any one year, no Employee shall be granted Options equal to or exceeding 1% of the issued share capital excluding outstanding warrants and conversions (as understood under SEBI Regulations) of the Company at the time of Grant of Options unless an approval from the Shareholders is taken by way of special resolution in a General Meeting or by postal ballot, as the case may be.

1. Subject to the overall limit prescribed in Clause 6.1 above, the Options may be granted in one or more tranches.
2. Subject to Clause 9, each Option will entitle the Participant to one Share of the Company.

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Sudarshan Chemical Industries Limited

Sudarshan Employee Stock OpƟon Plan 2018

1. The Grant of the Options by the Company/ Committee/ Board to the Grantee shall be made in writing and communicated to the Grantee by a Grant Letter. Such a Grant shall state the number of Options Granted, the Exercise Price and the Closing date of accepting the Grant Offer
2. The Closing Date shall not be more than 30 days from the Grant Date.
3. Exercise Price shall be payable by the Participant at the time of exercise of Options in accordance with this Plan.
4. An offer made under this Clause is personal to the Grantee and cannot be transferred in any manner whatsoever.

8 Method of acceptance

1. Any Grantee who wishes to accept the Grant made pursuant to Clause 7 above, must deliver an Acceptance Form, prescribed by the Board/ Committee from time to time, duly completed as required therein to the Board/ Committee on or before the Closing date.
2. Upon receipt of a duly completed Acceptance Form from the Grantee in respect of the Grant, the Grantee will become a Participant. The Committee may then issue to the Participant a statement, in such form as it deems appropriate, showing the number of Options to which the Participant is entitled pursuant to the acceptance of such Grant and the number of Shares for which the Participant will be entitled to subscribe pursuant to such Grant.
3. Subject to the terms contained herein, the acceptance in accordance with this Clause, of a Grant made to a Grantee, shall conclude a contract between the Grantee and the Company, pursuant to which each Option shall, on such acceptance, be an Unvested Option.
4. The Grant of Options to any Grantee who fails to return the Acceptance Form or any Acceptance Form received by the Company/ Board/ Committee after the Closing date shall not be valid and the Options granted will stand cancelled, unless the Board/ Committee determines otherwise.

9 Vesting of Options

1. Subject to the terms contained herein, the acceptance in accordance with Clause 8 of the Plan of a Grant made to a Participant, shall conclude a contract between the Participant and the Company, pursuant to which each Option shall, on such acceptance, be an Unvested Option.
2. There should be a minimum period of one year between the grant of options and vesting of options and such maximum period as may be determined by the Board, but not exceeding 8 (eight) years.
   Provided further that in the event of death or Permanent Disability, the minimum vesting period of 1 (One) year shall not be applicable and in such instances, the Unvested Options shall vest on the date of death or Permanent Disability.
3. The Vesting of Options shall be subject to any additional conditions at the time of grant of options as may be prescribed by the NRC pertaining to achievement of employee performance metrics and Company performance target threshold or on the basis of the continuity of employment in the Company.
4. Subject to Clause 11 of the Plan, for a valid vesting, a Participant is required to be in service on the Vesting Date and not be serving his notice upon resignation / termination of service on the Vesting Date.

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