UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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Syntel, Inc.
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CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
[SYNTEL LOGO]
April 29, 2004
Dear Shareholder:
It is my pleasure to invite you to attend Syntel's 2004 Annual Meeting of
Shareholders on Thursday, June 3, 2004, at 10:00 a.m. The meeting will be held
at the global headquarters of Syntel, Inc. located at 525 East Big Beaver Road,
Suite 300, Troy, Michigan. If you should need directions to Syntel's global
headquarters, please contact us at (248) 619-2800.
The following pages contain the formal Notice of the Annual Meeting and the
Proxy Statement. You will want to review this material for information
concerning the business to be conducted at the meeting, which will consist of
the election of directors.
Your vote is important. Whether or not you plan to attend the meeting, we
urge you to complete, sign, and return your proxy as soon as possible in the
envelope provided. This will ensure representation of your shares in the event
you are unable to attend. You may of course revoke your proxy and vote in person
at the meeting if you wish.
Sincerely,
/S/ BHARAT DESAI
Bharat Desai
Chairman, President, and Chief
Executive Officer
SYNTEL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 3, 2004
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The Annual Meeting of Shareholders of Syntel, Inc., a Michigan corporation,
will be held on Thursday, June 3, 2004, at 10:00 a.m., at Syntel's global
headquarters located at 525 East Big Beaver Road, Suite 300, Troy, Michigan. The
purposes of the Annual Meeting are to:
1. elect two directors for a term of three years; and
2. conduct any other business that is properly raised at the meeting or any
adjournment of the meeting.
Only shareholders of record at the close of business on April 8, 2004 may
receive notice of and vote at the meeting.
By Order of the Board
/s/ DANIEL M. MOORE
April 29, 2004 Daniel M. Moore
Chief Administrative Officer
and Secretary
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WE WOULD LIKE SHAREHOLDERS TO COME TO THE MEETING, BUT, EVEN IF YOU PLAN TO
ATTEND, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENVELOPE PROVIDED.
SYNTEL, INC.
525 EAST BIG BEAVER ROAD, SUITE 300
TROY, MICHIGAN 48083
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, JUNE 3, 2004
SOLICITATION OF PROXIES
This proxy statement and the accompanying proxy are being distributed to
shareholders of Syntel, Inc. ("Syntel") in connection with the solicitation of
proxies to be used at Syntel's 2004 Annual Meeting of Shareholders. The proxy is
your vote as a shareholder of Syntel on the matters presented at the Annual
Meeting. The Annual Meeting will be held at Syntel's global headquarters located
at 525 East Big Beaver Road, Suite 300, Troy, Michigan, on Thursday, June 3,
2004, at 10:00 a.m.
The enclosed proxy is solicited by Syntel's Board of Directors. This Proxy
Statement and the enclosed proxy were first mailed or given to shareholders
beginning on April 29, 2004. Syntel's 2003 Annual Report to Shareholders is also
enclosed with this Proxy Statement.
Syntel will pay the entire cost of soliciting proxies. Syntel will arrange
with brokerage houses, nominees, custodians, and other fiduciaries to send proxy
soliciting materials to beneficial owners of the Common Stock at Syntel's
expense.
REVOKING A PROXY
Any person giving a proxy has the power to revoke it at any time before it
is voted. There are three ways to revoke your proxy: (1) you may deliver a
written notice of revocation, dated after the date of your proxy, to the
inspectors of the election at or before the Annual Meeting; (2) you may deliver
a later-dated proxy to the inspectors of the election at or before the Annual
Meeting; or (3) you may attend the Annual Meeting in person and vote your shares
by ballot.
RECORD DATE
The record date for determining shareholders entitled to vote at the Annual
Meeting is April 8, 2004. Each of the 40,250,064 shares of Syntel's Common Stock
issued and outstanding on that date and not held in an account for Syntel's
benefit is entitled to one vote on any matter voted on at the Annual Meeting.
Abstentions and votes withheld by brokers on non-routine proposals in the
absence of instructions from beneficial owners ("broker non-votes") will be
counted as present at the Annual Meeting to determine whether a quorum exists.
MATTERS TO COME BEFORE THE MEETING
ELECTION OF DIRECTORS
The members of Syntel's Board of Directors are organized into three
classes, each class being as nearly equal in number as possible. One class of
directors is elected each year to hold office for a three-year term and until
their successors are duly elected and qualified. There are currently six members
of the Board. On January 1, 2004, Syntel's Board of Directors voted to expand
Syntel's Board of Directors from five members to six. Syntel's Board of
Directors voted to appoint Mr. Vasant Raval to the vacancy created by the
increase in the number of directors, also effective on January 1, 2004.
Two directors are to be elected at this year's Annual Meeting. They will
serve for a term ending at Syntel's 2007 Annual Meeting of Shareholders and upon
the election and qualification of their successors. The nominees named below
have been selected by the Board of Directors. Except where the authority to do
so has
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been withheld, it is the intention of the persons named in the proxy provided
with this proxy statement to vote to elect the nominees named below as
directors.
The two persons receiving a plurality of the votes cast at the Annual
Meeting in person or by proxy will be elected as directors. "Plurality" means
that the nominee who receives the largest number of votes cast is elected as a
director. Shares not voted (whether by abstention, broker non-votes or
otherwise) have no effect on the election. In case a nominee is unable or
declines to serve, proxies will be voted for another person designated by the
Board of Directors to replace the nominee. However, the Board of Directors does
not anticipate this will occur.
Information concerning the nominees for election and the directors
continuing in office, with respect to age and positions with Syntel or other
principal occupations for the past five years follows.
NOMINEES FOR ELECTION AS A DIRECTOR UNTIL THE 2007 ANNUAL MEETING
George R. Mrkonic, age 51, served as the Vice Chairman of Borders Group,
Inc., a retailer of books, music, and educational entertainment media products
headquartered in Ann Arbor, Michigan from December 1994 until January 2002, and
has served as a director of Borders Group, Inc. since August 1994. Mr. Mrkonic
is also a director of (i) Galyan's Trading Company, Inc., a specialty retailer
that offers a broad range of products that appeal to consumers with active
lifestyles, (ii) Nashua Corporation, a manufacturer of specialty imaging
products and services to industrial and commercial customers to meet various
print application needs, (iii) Guitar Center, Inc., the nation's leading
retailer of guitars, amplifiers, percussion instruments, keyboards and pro-audio
and recording equipment, and (iv) Brinker International, Inc., the parent
company of a diverse portfolio of casual dining restaurant concepts. Mr. Mrkonic
has been a director of Syntel since August 1997 and was recommended for
nomination for election at this annual meeting of Syntel's shareholders by the
full Board of Directors.
Vasant Raval, age 64, has been a Professor and Chair of the Department of
Accounting at Creighton University since 2001. Mr. Raval joined the faculty of
Creighton University in 1981 and has served as Professor of Accounting and
Associate Dean and Director of Graduate Programs at the College of Business
Administration. Mr. Raval is also a director of InfoUSA, Inc., a provider of
business and consumer information products, database marketing services, data
processing services, and sales and marketing solutions. Mr. Raval has been a
director of Syntel since January 2004 when he was appointed by the Board of
Directors to fill a vacancy created by the expansion of Syntel's board from five
members to six and was recommended for nomination for election at this annual
meeting of Syntel's shareholders by the full Board of Directors.
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2005 ANNUAL MEETING
Neerja Sethi, age 49, is a co-founder of Syntel and has served as a Vice
President and a director since Syntel's formation in 1980. Ms. Sethi is the
spouse of Mr. Desai.
Douglas E. Van Houweling, age 60, has been Chief Executive Officer and
President of the University Corporation for Advanced Internet Development
(UCAID) since November 1997. UCAID is the not-for-profit organization created by
the higher education community to support continued development of the Internet
through the Internet2 project. Dr. Van Houweling is also a Professor of
Information at the University of Michigan. Dr. Van Houweling is also a director
of Adaptec, Inc., a provider of electronic data storage access solutions. Dr.
Van Houweling has been a director of Syntel since August 1997.
DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2006 ANNUAL MEETING
Bharat Desai, age 51, is a co-founder of Syntel and has served as its
President and Chief Executive Officer and as a director since its formation in
1980. He has also served as Chairman of the Board since February 1999. Mr. Desai
is the spouse of Ms. Sethi.
Paritosh K. Choksi, age 51, is Executive Vice President, Chief Operating
Officer, and Chief Financial Officer and a director of ATEL Capital Group, a
financial services management company, and has served in those capacities since
April 2001. From May 1999 to April 2001, Mr. Choksi was Chief Financial Officer,
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Senior Vice President, and a director of ATEL Capital Group. From December 1997
through April 1999, Mr. Choksi was Chief Financial Officer of Wink
Communications, a developer of interactive television. Mr. Choksi has been a
director of Syntel since August 1997.
COMPENSATION OF DIRECTORS
Directors who are also employees of Syntel do not receive any additional
compensation for their service as a Director. Directors who are not employees of
Syntel are paid a $25,000 annual retainer as well as $2,000 for attending each
Board meeting and $500 for attending each committee meeting which is not held on
the same day as a Board meeting. Committee chairpersons also receive annual
retainers in addition to those they receive as Board members. The Audit
Committee chairperson receives an annual retainer of $10,000 and all other
committee chairpersons receive an annual retainer of $5,000. In addition,
starting this year, each non-employee director will receive, under Syntel's 1997
Stock Option and Incentive Plan, 6,000 shares of restricted stock at the annual
shareholder meeting at which the director is elected to a three year term. The
restricted stock will vest over the term of the directors service, with one
third or 2,000 of the shares of restricted stock vesting on each of the first
three anniversaries of the grant date. At this year's Annual Meeting of
Shareholders only, the continuing directors will also receive restricted stock.
If they have one year remaining on their term in office, they will receive 2,000
shares of restricted stock which will vest on the first anniversary of the grant
date. If they have two years remaining on their term in office, they will
receive 4,000 shares of restricted stock, one half of which will vest on each of
the first two anniversaries of the grant date. All directors are also reimbursed
for travel expenses incurred in connection with attending Board and committee
meetings.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors meets regularly, at least once each quarter. During
2003, the Board of Directors held eight meetings. The standing committees
established by the Board of Directors are described below. The Board of
Directors has determined that each of Messrs. Choksi, Mrkonic, Raval, and Van
Houweling are independent under the listing standards of the National
Association of Securities Dealers ("NASD") in that such directors have no
relationships which would interfere with their exercise of independent judgment
in carrying out their responsibilities as a director.
Audit Committee. The Audit Committee is responsible for, among other
things, appointing an independent accounting firm to conduct the independent
audit of Syntel, periodically reviewing the qualifications of Syntel's
independent auditors, reviewing the scope and results of any audit, and
reviewing fees charged by the independent auditors for audit service, non-audit
service, and related matters. The Audit Committee met twelve times during 2003.
The members of the Audit Committee are Vasant Raval (Committee Chairperson),
Paritosh K. Choksi, and George R. Mrkonic, Jr. The Board has determined that
Vasant Raval is an "audit committee financial expert" and that each member of
the Audit Committee is independent and qualified to serve on the Committee under
the NASD listing standards. The Audit Committee charter is attached to this
proxy statement as Appendix A.
Compensation Committee. The Compensation Committee develops and monitors
the executive compensation policies of Syntel. The Compensation Committee is
responsible for the administration of all salary and incentive compensation
plans, including bonuses, for the chief executive officer, other officers, and
the key employees of Syntel. The Compensation Committee also administers
Syntel's 1997 Stock Option and Incentive Plan and the 1997 Employee Stock
Purchase Plan. The Compensation Committee met ten times during 2003. The members
of the Compensation Committee are Douglas E. Van Houweling (Committee
Chairperson), Paritosh K. Choksi, and George R. Mrkonic, Jr. The Board has
determined that each member of the Committee is independent under NASD listing
standard.
Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee was established in March 2004. The Nominating and
Corporate Governance Committee is responsible for identifying and recommending
to the Board of Directors nominees, including nominees submitted by
shareholders, who are qualified to serve on Syntel's Board of Directors, to
develop and periodically review corporate governance principles for Syntel, and
oversee the evaluation of board members
3
and management. As a recently established committee, the Nominating and
Corporate Governance Committee did not meet during 2003. The members of the
Nominating and Corporate Governance Committee are George R. Mrkonic, Jr.
(Committee Chairperson), Paritosh K. Choksi, and Douglas E. Van Houweling. The
Board of Directors has determined that each member of the Committee is
independent. The Nominating and Corporate Governance Committee charter is
attached to this proxy statement as Appendix B.
The Nominating and Corporate Governance Committee's policy with respect to
the consideration of director candidates recommended by shareholders is that it
will consider such candidates on the same basis as it considers all director
candidates. In considering director candidates, the Nominating and Corporate
Governance Committee will consider such factors as it deems appropriate to
assist in developing a board and committees that are diverse in nature and
comprised of experienced and qualified advisors. These factors may include
judgment, skill, diversity (including factors such as race, gender or
experience), integrity, experience with businesses and other organizations of
comparable size, the interplay of the candidate's experience with the experience
of other board members, and the extent to which the candidate would be a
desirable addition to the board and any committees of the board.
The Nominating and Corporate Governance Committee considers candidates for
board membership suggested by its members and other board members and
management, as well as shareholders. Previously, the Board of Directors has
retained third party search firms from time to time to identify and evaluate
candidates, and the Nominating and Corporate Governance Committee is authorized
to continue that practice. The Nominating and Corporate Governance Committee is
authorized to engage or consult from time to time, as appropriate, at Syntel's
expense, consultants, independent legal counsel and other experts and advisors
it considers necessary, appropriate or advisable in the discharge of its
responsibilities.
Executive Committee. The Executive Committee was established in March
2004. The Executive Committee assists the Board of Directors in discharging its
duties relating to Syntel's strategic vision. As a recently established
Committee, the Executive Committee did not meet during 2003. The members of the
Executive Committee are Paritosh K. Choksi (Committee Chairperson), Bharat
Desai, and Neerja Sethi.
MEETING ATTENDANCE AND COMMUNICATIONS
During 2003, all current directors attended at least 75% of the meetings of
the board of directors and the committees on which they served. In 2003, two
directors attended the annual meeting of shareholders. Syntel does not have a
policy on individual director attendance at annual shareholder meetings.
Shareholders may send written communications to the board, committees of the
board, and individual directors by mailing those communications to our Corporate
Secretary at Syntel, Inc., 525 East Big Beaver Road, Suite 300, Troy, Michigan
48083, who will forward all such communications to the addressee(s).
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT
Compensation policies for executive officers are developed and monitored by
the Compensation Committee of the Board of Directors. The Committee recommends
to the Board of Directors the nature and amount of compensation for all
executive officers. This Committee consists of three independent directors who
are neither officers nor employees of Syntel.
COMPENSATION POLICIES
Syntel's executive compensation policies are designed to encourage and
reward executive efforts which create shareholder value through achievement of
corporate objectives and performance goals and, as a result, to align the
interests of executives with those of shareholders. More specifically, Syntel's
compensation policies can be summarized as:
(a) annual base salaries targeted to be competitive with other leading
information technology ("IT") services companies with which Syntel
competes for talent;
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(b) annual cash bonuses based on improved performance by Syntel; and
(c) long-term incentive-based compensation through Syntel's 1997 Stock
Option and Incentive Plan and Employee Stock Purchase Plan which
is used to link executive performance to shareholder interests,
encourage stock ownership in Syntel and provide an incentive to
create long-term shareholder value.
Each component of compensation (annual base salary, annual cash bonus, and
long-term performance incentives) is described more fully below.
ANNUAL BASE SALARIES
Executive salaries are intended to be competitive with other leading IT
services companies with which Syntel competes for personnel. Executive salary
levels are based on level of job responsibility, individual performance, and
published compensation data for comparable companies. These factors were used by
the Committee in determining the Executive Officers' 2003 annual base salary
compensation.
ANNUAL CASH BONUSES
Annual incentive-based compensation is provided primarily through cash
bonuses. Bonuses are based upon the achievement of specified individual and
corporate goals, as well as a review of personal performance, which is
determined at the discretion of the Committee. These factors were used by the
Committee in determining the Executive Officers' 2003 bonus compensation.
LONG-TERM PERFORMANCE INCENTIVES
The Committee grants stock options, with ten-year terms at an exercise
price equal to the fair market value on the date of grant, having a value based
on the level of stock price appreciation over the market price on the date of
grant. This provides an incentive for executives to develop shareholder value
and rewards them in proportion to the gain received by other shareholders. The
Committee considers the level of stock options granted by comparable IT services
companies and the number of Company stock options previously granted in reaching
its decision to make additional grants of stock options, but does not have a
specific weighting formula for each factor. The Committee did not grant any
long-term performance incentives to continuing executive officers in 2003.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the U.S. Internal Revenue Code limits to $1 million the
corporate tax deduction for compensation paid to certain executive officers
unless the compensation is based on non-discretionary, pre-established
performance goals. The Committee believes that both annual incentive bonuses and
stock options granted as long-term performance incentives meet the requirements
for fully deductible compensation under Section 162(m).
CHIEF EXECUTIVE OFFICER COMPENSATION
The Committee uses the same procedures described above for the other
executive officers in setting the annual salary and bonus for Bharat Desai,
Syntel's Chief Executive Officer. The Committee will evaluate the performance of
Mr. Desai at least annually based upon both Syntel's financial performance and
the extent to which the strategic and business goals established for Syntel are
met. The Committee does not assign relative weights or rankings to particular
factors, but makes its determination based upon a consideration of all such
factors. Mr. Desai's annual base salary for 2003 was based upon his historical
compensation as well as the
5
factors listed above. His 2003 annual bonus compensation was based upon goals
set with regard to Syntel's revenue and earnings per share.
COMPENSATION COMMITTEE
Douglas E. Van Houweling, Chairperson
Paritosh K. Choksi
George R. Mrkonic
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides certain summary information concerning the
compensation of Syntel's Chief Executive Officer and the other four most highly
compensated executive officers of Syntel for the last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ------------
----------------------------- SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
--------------------------- ------ --------- -------- ------------ ---------------
Bharat Desai,........................ 2003 $300,000 -0- -0- -0-
Chairman, President, and 2002 300,000 $500,000 -0- -0-
Chief Executive Officer 2001 300,000 -0- -0- -0-
Prakash Kenjale,..................... 2003 160,000 54,600 -0- $ 3,872(1)
Chief Technology Officer 2002 160,000 25,000 -0- 3,195(1)
2001 158,333 15,000 -0- 2,506(1)
Marlin Mackey,....................... 2003 220,000 100,295 -0- -0-
Senior Vice President, 2002 220,000 70,000 -0- -0-
Global Relationships 2001 213,333 75,000 60,000 -0-
Daniel M. Moore,..................... 2003 215,000 82,813 -0- 1,140(1)
Chief Administrative Officer 2002 215,000 88,595 -0- 1,050(1)
and Secretary 2001 214,167 50,000 15,000 970(1)
Rajiv Tandon,........................ 2003 230,000 82,013 -0- 12,000(2)
Senior Vice President, 2002 220,417 42,000 -0- 11,700(2)
North American Operations 2001 225,000 70,000 50,000 11,500(2)
---------------
(1) These amounts reflect payments by Syntel for life insurance upon the named
executive officer.
(2) These amounts are city allowances for working in a Syntel office located in
a metropolitan area with a high cost of living.
OPTION/SAR GRANTS IN LAST FISCAL PERIOD
Syntel did not grant any stock options or stock appreciation rights to the
persons named in the Summary Compensation Table during the last fiscal year.
6
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides information regarding the exercise of stock
options during the last fiscal year by the persons named in the Summary
Compensation Table and the value of each of those person's unexercised
in-the-money options held at the end of the last fiscal year.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES YEAR-END(#) FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ----------- ----------- ------------- ----------- -------------
Bharat Desai.......... -0- -0- -0- -0- -0- -0-
Prakash Kenjale....... 2,700 $ 31,293 16,050 10,000 $273,251 $197,010
Marlin Mackey......... 77,163 1,367,370 9,000 30,000 148,059 591,030
Daniel M. Moore....... 35,000 570,260 -0- 10,500 -0- 206,861
Rajiv Tandon.......... 64,595 972,691 30,905 25,000 509,390 492,525
---------------
(1) Assumes a market price of $24.701 per share, which was the last sale price
before the close of Syntel's fiscal year on December 31, 2003. At April 8,
2004 the last sale price was $27.82 per share.
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PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
Syntel's Common Stock to the cumulative total shareholder returns for the S&P
500 Stock Index and for an index of peer companies selected by Syntel. The
period for comparison is for five years from December 31, 1998, through December
31, 2003, the end of Syntel's last fiscal year. The peer group index is composed
of CIBER, Inc., Computer Horizons Corp., Computer Sciences Corporation,
Electronic Data Systems Corporation, Keane, Inc., and Sapient Corporation. These
companies were selected based on similarities in their service offerings and
their competitive position in the industry. In prior years, Cambridge Technology
Partners, Inc. was included in the index of peer companies selected by Syntel.
In 2001, Cambridge Technology Partners, Inc. was acquired by Novell, Inc. and
was no longer a separate publicly traded entity. For that reason, use of
information concerning the performance of Cambridge Technology Partners, Inc.
has been excluded from all calculations used in completing the performance
graph.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG SYNTEL, INC., S&P 500 STOCK INDEX
AND AN INDEX OF PEER COMPANIES*
[PERFORMANCE GRAPH]
12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
-------- -------- -------- -------- -------- --------
Syntel, Inc. ....................... $100 $143 $ 51 $114 $186 $231
S&P 500 Stock Index................. $100 $120 $107 $ 93 $ 72 $ 90
Peer Group Index.................... $100 $181 $106 $119 $ 42 $ 55
---------------
* Assumes that the value of an investment in Syntel's Common Stock and each
index was $100 on December 31, 1998 and that all dividends were reinvested.
ADDITIONAL INFORMATION
AUDIT COMMITTEE REPORT
The Audit Committee is responsible for, among other things, appointing an
independent accounting firm to conduct the independent audit of Syntel,
periodically reviewing the qualifications of Syntel's independent auditors,
reviewing the scope and results of any audit, and reviewing fees charged by the
independent auditors for audit services, non-audit services, and related
matters. Earlier this year, the Board of Directors adopted an amended Audit
Committee Charter, which is attached to this proxy statement as Appendix A.
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The Audit Committee's job is one of oversight as set forth in its Charter.
It is not the duty of the Audit Committee to prepare Syntel's financial
statements, to plan or conduct audits, or to determine that Syntel's financial
statements are complete and accurate and are in accordance with generally
accepted accounting principles. Syntel's management is responsible for preparing
Syntel's financial statements and for maintaining internal control. The
independent auditors are responsible for auditing the financial statements and
for expressing an opinion as to whether those audited financial statements
fairly present the financial position, results of operations, and cash flows of
Syntel in conformity with generally accepted accounting principles.
The Audit Committee has reviewed and discussed Syntel's audited
consolidated financial statements with management and with Ernst & Young LLP,
Syntel's independent auditors for 2003, both with and without management
present. The Audit Committee has discussed with Ernst & Young LLP the matters
required to be discussed by Statement on Auditing Standards No. 61. The Audit
Committee has received from Ernst & Young LLP the written statements and the
letter required by Independence Standards Board Standard No. 1, has discussed
Ernst & Young's independence with them, and has considered the compatibility of
non-audit services with the auditor's independence. Based on the review and
discussions referred to above, the Audit Committee has recommended to the Board
of Directors, and the Board of Directors has approved, inclusion of the audited
consolidated financial statements in Syntel's Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 filed with the Securities and Exchange
Commission.
AUDIT COMMITTEE
Vasant Raval, Chairperson
Paritosh K. Choksi
George R. Mrkonic, Jr.
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP was selected by the Audit Committee to serve as Syntel's
independent accountant for the first quarter of 2004. Ernst & Young also served
as Syntel's independent accountant for Syntel's 2003 quarterly and year end
financial statements and its 2002 year end financial statements. The Audit
Committee is still in the process of selecting the independent accountant for
the remainder of 2004. It is anticipated that a representative of Ernst & Young
will be present at the Annual Meeting, will have an opportunity to make a
statement, and will respond to appropriate questions. PricewaterhouseCoopers LLP
served as independent accountant for Syntel and reviewed its quarterly financial
statements during 2002.
Audit Fees. Syntel was billed a total of $239,725 by Ernst & Young for
professional services rendered in connection with the audit of Syntel's
financial statements for the 2003 fiscal year end and reviews of Syntel's
financial statements for quarterly reports and other statutory and regulatory
filings during 2003. Syntel was billed a total of (i) $97,150 by Ernst & Young
for professional services rendered in connection with the audit of Syntel's
financial statements for the 2002 fiscal year end and (ii) a total of $50,844 by
PricewaterhouseCoopers for reviews of Syntel's financial statements for
quarterly reports and other statutory and regulatory filings during 2002.
Audit-Related Fees. Syntel engaged Ernst & Young for assurance and related
services related to audits of employee benefit plans and statutory audit
services relative to two of Syntel's subsidiaries, Syntel India Ltd. and Syntel
Deutschland GmbH. The professional fees in connection with these services
amounted to $25,905 billed in 2003 and $15,651 billed in 2002. Syntel was not
billed by PricewaterhouseCoopers for audit-related fees during 2002.
Tax Fees. Syntel was billed a total of $329,152 by Ernst & Young for tax
compliance, tax advice, and tax planning services in 2003. Syntel was billed a
total of $64,355 by Ernst & Young for tax compliance, tax advice, and tax
planning services in 2002 and was billed nothing by PricewaterhouseCoopers for
tax compliance, tax advice, and tax planning services in 2002.
All Other Fees. Syntel was billed $10,207 by Ernst & Young for other
services during the 2003 fiscal year. Syntel was billed nothing by Ernst & Young
and $33,000 by PricewaterhouseCoopers for other services during the 2002 fiscal
year. During 2003, the other services provided by Ernst & Young consisted of
consulting
9
on transfer pricing, dividends, and other miscellaneous advisory services.
During 2002, the other services provided by PricewaterhouseCoopers consisted of
consulting on goodwill evaluation, stock warrants, and other miscellaneous
advisory services.
With regard to both Ernst & Young for fiscal year 2003 and fiscal year end
2002 and PricewaterhouseCoopers for fiscal year 2002, the Audit Committee
determined that their provision of non-audit services was not incompatible with
maintaining their independence as independent accountant to Syntel. It is the
Audit Committee's policy that all services to be performed by the independent
accountant be approved in advance by the Audit Committee. The Audit Committee
considers the impact of the fees for proposed non-audit services on the
independence of the independent accountant before determining whether to give
its approval.
CHANGE IN INDEPENDENT ACCOUNTANT
On November 11, 2002, Syntel's Audit Committee voted to engage the
independent accounting firm of Ernst & Young as Syntel's independent accountant
for the remainder of the 2002 fiscal year and for fiscal year 2003, and
dismissed PricewaterhouseCoopers.
The reports of PricewaterhouseCoopers on Syntel's financial statements for
the 2001 fiscal year did not contain an adverse opinion or a disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope, or
accounting principles. During the 2001 fiscal year and the subsequent period
through November 11, 2002, there were no disagreements between Syntel and
PricewaterhouseCoopers on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers,
would have caused it to make reference to the subject matter of the
disagreements in connection with its reports on the financial statements for
such years. In addition, during the 2001 fiscal year and the period through
November 11, 2002, there were no "reportable events" within the meaning of Item
304(a)(1)(v) of the Securities and Exchange Commission's Regulation S-K.
During the fiscal year ended December 31, 2001, and during the subsequent
interim period through November 11, 2002, Syntel did not consult with Ernst &
Young with respect to the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on Syntel's financial statements, or any other matters or
reportable events as set forth in Items 304(a)(2)(i) and (ii) of the Securities
and Exchange Commission's Regulation S-K, except for accounting principles
relating to Syntel's wholly-owned subsidiary, Syntel (India) Ltd., for which an
Ernst & Young affiliate was previously and continues to be engaged as the
independent accountant.
PRINCIPAL SHAREHOLDERS
The following table provides information about any person known by
management of Syntel to have been the beneficial owner of more than five percent
of Syntel's outstanding Common Stock as of April 8, 2004.
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OWNERSHIP OF CLASS
---------------- ------------ --------
Bharat Desai................................................ 22,288,242(1) 55.2%
Neerja Sethi................................................ 10,461,158(2) 25.9
---------------
(1) Includes 9,468,692 shares of Common Stock held in four trusts for the
benefit of Mr. Desai's descendants, of which trusts Mr. Desai is a trustee,
and 1,800 shares held in several educational trusts for the benefit of other
individuals, of which Mr. Desai is also the trustee. Mr. Desai disclaims
beneficial ownership of shares held by his spouse, Ms. Sethi. The business
address of Mr. Desai is 525 East Big Beaver Road, Suite 300, Troy, Michigan
48083.
(2) Includes 150,000 shares of Common Stock held in two trusts for the benefit
of Ms. Sethi's descendants, of which trusts Ms. Sethi is a trustee, and
9,000 shares held in several educational trusts for the benefit of
10
other individuals, of which Ms. Sethi is also the trustee. Ms. Sethi
disclaims beneficial ownership of shares held by her spouse, Mr. Desai. The
business address of Ms. Sethi is 525 East Big Beaver Road, Suite 300, Troy,
Michigan 48083.
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides information, as of April 8, 2004, about the
beneficial ownership of Syntel's Common Stock by the nominees, present directors
and named executive officers of Syntel, and by all directors and executive
officers as a group.
NUMBER OF
SHARES
BENEFICIALLY PERCENT OF
NAME OWNED(L) CLASS
---- ------------ ----------
Paritosh K. Choksi.......................................... 36,785 *
Bharat Desai................................................ 22,288,242(2) 55.2%
Prakash Kenjale............................................. 22,286 *
Marlin Mackey............................................... 63,637 *
Daniel M. Moore............................................. 8,748 *
George R. Mrkonic........................................... 21,240 *
Vasant Raval................................................ -0- *
Neerja Sethi................................................ 10,461,158(3) 25.9%
Rajiv Tandon................................................ 47,533 *
Douglas E. Van Houweling.................................... 2,500 *
All directors and executive officers as a group (13
persons).................................................. 33,005,034 81.8%
---------------
* Less than 1%
(1) The number of shares shown in the table includes the following number of
shares which the person specified may acquire within 60 days by exercising
options which were unexercised on April 8, 2004: Paritosh K. Choksi, 8,875;
Prakash Kenjale, 21,050; Marlin Mackey, 23,008; Rajiv Tandon, 30,905;
Douglas E. Van Houweling, 2,500; and all directors and executive officers as
a group, 108,338.
(2) Includes 9,468,692 shares of Common Stock held in four trusts for the
benefit of Mr. Desai's descendants, of which trusts Mr. Desai is a trustee,
and 1,800 shares held in several educational trusts for the benefit of other
individuals, of which Mr. Desai is also the trustee. Mr. Desai disclaims
beneficial ownership of shares held by his spouse, Ms. Sethi.
(3) Includes 150,000 shares of Common Stock held in two trusts for the benefit
of Ms. Sethi's descendants, of which trusts Ms. Sethi is a trustee, and
9,000 shares held in several educational trusts for the benefit of other
individuals, of which Ms. Sethi is also the trustee. Ms. Sethi disclaims
beneficial ownership of shares held by her spouse, Mr. Desai.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires Syntel's
executive officers and directors, and persons who own more than ten percent of a
registered class of Syntel's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission (the "SEC").
Officers, directors and greater than ten percent shareholders are required by
regulations of the SEC to furnish Syntel copies of all Section 16(a) forms they
file.
Based solely on Syntel's review of copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, Syntel believes that, except for the following, its
officers, directors and greater than ten percent beneficial owners met all
applicable filing requirements during the last year. The following persons filed
the listed reports after their due dates: Prakash
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Kenjale, one Form 4 Statement of Changes in Beneficial Ownership reporting one
transaction and Marlin Mackey, one Form 4 Statement of Changes in Beneficial
Ownership reporting one transaction.
SHAREHOLDER PROPOSALS FOR 2005 ANNUAL MEETING
Shareholder proposals to be presented at the 2005 Annual Meeting of
Shareholders must be received by Syntel not later than December 23, 2004 if they
are to be included in Syntel's Proxy Statement for the 2005 Annual Meeting of
Shareholders. Such proposals should be addressed to the Secretary at Syntel's
executive offices.
Shareholder proposals to be presented at the 2005 Annual Meeting of
Shareholders which are not to be included in Syntel's Proxy Statement for that
meeting must be received by Syntel not before March 4, 2005 and not later than
April 5, 2005; or, for any special meeting of shareholders, no later than 10
days after the day of the public announcement of the date of the special meeting
in accordance with the procedures contained in Syntel's Bylaws. Such proposals
should be addressed to the Secretary at Syntel's executive offices.
OTHER MATTERS
At the date of this Proxy Statement, management is not aware of any matters
to be presented for action at the 2004 Annual Meeting of Shareholders other than
the matters described in this Proxy Statement. However, if any other matters
should come before the meeting, the persons named in the proxy card intend to
vote the proxy in accordance with their judgment on those matters.
By Order of the Board of Directors,
/s/ DANIEL M. MOORE
Daniel M. Moore
Secretary
April 29, 2004
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APPENDIX A
AUDIT COMMITTEE CHARTER
(APPROVED AND EFFECTIVE AS OF MARCH 15, 2004)
PURPOSE
Syntel, Inc. (the "Corporation") shall maintain an Audit Committee (the
"Committee") which will assist the Board of Directors (the "Board") in
fulfilling its oversight responsibilities with respect to (i) the financial
reporting process of the Corporation and the audits of the Corporation's
financial statements, (ii) the system of internal controls that management has
established; (iii) the internal and independent audit process; (iv) compliance
with legal and regulatory requirements; (v) preparation of the reports required
by the rules of the Securities and Exchange Commission (the "SEC") to be
included in the Corporation's annual proxy statement; and (vi) the independent
auditor's qualifications and independence.
While the Committee has the duties and responsibilities set forth in this
Charter, the role of the Committee is oversight. The Committee is not
responsible for planning or conducting the audit or determining whether the
Corporation's financial statements are complete and accurate and in accordance
with applicable accounting rules. Such activities are the responsibility of
management and the Corporation's independent auditors. The Committee does not
itself prepare financial statements or perform audits or auditing services, and
its members are not auditors, certifiers of the Corporation's financial
statements or guarantors of the Corporation's independent auditors' reports. It
is not the duty or responsibility of the Committee to ensure that the
Corporation complies with all laws and regulations. The Committee and each of
its members shall be entitled to rely on (a) the integrity of those persons and
organizations within and outside of the Corporation from which it receives
information, (b) the accuracy of the financial and other information provided to
the Committee by such persons or organizations absent actual knowledge to the
contrary (which shall be promptly reported to the Board), and (c)
representations made by management as to any audit and non-audit services
provided by the independent auditors to the Corporation.
MEMBERSHIP
The Committee shall consist of at least three members of the Board.
Committee members and the Chairperson of the Committee shall be recommended by
the Corporation's Nominating and Corporate Governance Committee and appointed by
the Board and may be removed by the Board, with or without cause. The members of
the Committee shall meet the independence and experience requirements of the
NASDAQ Stock Market.
Simultaneous service on the audit committees of more than three public
companies will be reviewed by the Board for a determination of whether such
service impairs the effective service of the Committee member. This
determination will be reported in the Corporation's annual proxy statement.
MEETINGS
The Committee shall hold meetings once a quarter, or more frequently as
determined by the Chairman of the Committee, and special meetings as necessary.
An agenda listing matters to be considered shall be prepared and circulated to
the Committee prior to each meeting along with any materials related to agenda
items. Minutes of each meeting shall be prepared afterwards. The Committee may
retain special independent counsel or special accounting or other expert
assistance to advise the Committee at the Committee's discretion. The Committee
may request any officer or employee of the Corporation or the Corporation's
outside counsel or independent auditor to attend a meeting of the Committee or
to meet with any members of, or consultants to, the Committee. The Chairperson
of the Committee may represent the entire Committee for required quarterly
discussions with the independent auditor.
A majority of the members of the Committee constitutes a quorum for the
transaction of business at any meeting. The vote of a majority of the members of
the Committee present at any meeting at which there is a quorum shall be
necessary to approve the acts of the Committee. A member of the Committee may
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participate in a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can communicate with each other. Participation in a meeting in this
manner constitutes presence in person at the meeting.
RESPONSIBILITIES
The Committee shall make regular reports to the Board concerning its
activities and findings. The Committee should have a clear understanding with
the independent auditor that they must maintain an open and transparent
relationship with the Committee, and that the ultimate accountability of the
independent auditors is to the Committee.
The Committee's responsibilities include the following:
INTERNAL COMMITTEE PROCESSES/PROCEDURES:
1. Annually review and reassess the adequacy of this charter and submit it
to the Board for approval.
2. Annually review the performance of the Committee and report to the Board
the results of such evaluation.
3. Periodically, at the discretion of the Committee, review and recommend
to the Board for approval the adequacy of insurance coverage.
4. Establish hiring policies for employees or former employees of the
independent auditors.
5. Establish procedures for the receipt, retention and treatment of
complaints received by the Corporation regarding accounting, internal
accounting controls, or auditing matters and for the confidential and
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.
6. The Committee shall engage, and determine funding for independent
counsel and other advisors, such as accountants, outside advisors,
consultants or others, without Board approval, to assist in the conduct
or an investigations or as the Committee determines appropriate to
advise or assist in the performance of its duties.
DISCUSSIONS WITH AUDITORS:
1. Annually review with the independent auditors the scope and results of
the independent audit and the opinions and recommendations of the
independent auditors, including major issues regarding accounting and
auditing principles and practices as well as the adequacy of internal
controls that could significantly affect the Corporation's financial
statements.
2. Ensure that the independent auditors prepare and deliver annually to the
Audit Committee a formal written statement delineating all relationships
between such independent auditors and the Corporation, consistent with
Independent Standards Board Standard No. 1; actively engage in a
dialogue with the independent auditors with respect to all relationships
or services disclosed in the Statement that may impact the auditors'
objectivity and independence; and take, or recommend that the full board
take, appropriate action to satisfy itself of the independent auditors'
independence.
3. Discuss quarterly with the independent auditor the matters required to
be discussed by Statement on Auditing Standards No. 61 relating to the
conduct of their annual audit or quarterly reviews and any problems or
difficulties the auditor may have encountered and any management letter
provided by the auditor and the Corporation's response to the letter.
4. Review major changes to the Corporation's accounting principles and
practices as suggested by management and discuss periodically with the
independent auditor its judgments about the quality of the Corporation's
accounting principles and financial reporting practices.
A-2
5. Receive periodic reports from the independent auditor regarding the
auditors' independence, discuss such reports with the independent
auditors, review the non-audit services performed by the independent
auditors and the fees charged therefor to ensure that performance of
those services does not impair the independence of the auditors, and, if
in the Committee's opinion necessary, recommend that the Board of
Directors take appropriate action to insure the independence of the
auditor.
6. Review with independent accountants any audit problems or difficulties
with management's response.
DISCUSSIONS WITH MANAGEMENT:
1. Meet at least annually with the chief financial officer, the internal
auditor and the independent auditor in separate executive sessions to
discuss any matters that the Committee or these persons believe should
be discussed privately.
2. Periodically review the status of any legal matters, including inquiries
received from regulators or government agencies, which may have a
material financial impact on the Corporation or seriously affect the
reputation of the Corporation.
3. Periodically review with management the programs and procedures to
assure compliance with laws, regulations and corporate policy.
4. The Committee shall seek any information it requires from employees or
external parties.
5. Employees and external parties will be directed to cooperate and comply
with the Committee's requests.
6. Review summaries of reports to management prepared by the internal
auditors and management's responses.
7. Meet periodically with management to review the Corporation's major
financial risk exposures and the steps management has taken to monitor
and control such risks.
INTERNAL CONTROL:
1. Review on a continuing basis the adequacy of internal controls,
including meeting periodically with management and the independent
auditors to review the adequacy of such controls and to review before
release the disclosure regarding such system of internal controls
required under SEC rules to be contained in the Company's periodic
filings and the attestations or reports by the independent auditors
relating to such disclosure.
2. At least annually, obtain and review a report by the independent
auditors describing: the accounting firm's internal quality-control
procedures; any material issues raised by the most recent internal
quality-control review, or peer review, of the accounting firm, or by
any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more
independent audits carried out by the firm, and any steps taken to deal
with any such issues; and all relationships between the independent
auditors and the Company in order to assess the auditors' independence.
3. Obtain reports from management, the Corporation's internal auditor, and
the independent auditor that the Corporation's subsidiaries and
affiliated entities are in conformity with applicable legal requirements
and the Corporation's code of ethical conduct.
4. At the discretion of the Committee, review executive officer travel and
entertainment expenses, including executive perquisites, to assess the
reasonableness and appropriate documentation of the expenses.
A-3
AUDITOR QUALIFICATION AND RETENTION:
1. Annually review the qualifications and fees of candidates and then
recommend to the Board the independent accounting firm to conduct the
independent audit of the Corporation, which firm shall be ultimately
accountable to the Committee, and periodically review the performance of
the independent auditor and, if so determined by the Committee,
recommend that the Board of Directors replace the independent auditor.
2. Approve guidelines for the retention of the independent auditors for
audit and non-audit services and pre-approval of such services, as
required by applicable laws or listing standards. Pre-approval authority
may be delegated to one or more members of the Committee.
3. Approve in advance all audit and permissible non-audit services (other
than de minimus non-audit services as defined under SEC rules) to be
provided by the independent auditors.
4. Approve the appointment or dismissal of the internal auditor and
periodically review with management the role and scope of the work
performed by the internal auditor.
5. The Committee shall have the sole authority for the appointment,
compensation, retention and oversight of the Corporation's independent
auditors.
FINANCIAL REPORTING, SEC, MEDIA:
1. Review analyses prepared by management and the independent auditor of
significant financial reporting issues and judgments made in connection
with the preparation of the Corporation's financial statements.
2. Review with management and the independent auditor the financial
statements to be included in the Form 10-Q and Form 10-K before filing
them with the SEC.
3. Review and discuss the Corporation's earnings press releases as well as
financial information and earnings guidance provided to analysts and
rating agencies.
4. Review and approve any related-party transactions required to be
disclosed in the Company's annual proxy statement pursuant to Item 404
of Regulation S-K promulgated under the Securities Exchange Act of 1934.
5. Confirm with the independent auditor that no illegal acts have been
reported by the independent auditor as required by Section 10A of the
Securities Exchange Act of 1934.
6. After preparation by management and review by the internal auditor and
the independent auditor, approve the Committee report to be included in
the Corporation's annual proxy statement, with the Committee's charter
published as an appendix to the proxy statement at least every three
years.
A-4
APPENDIX B
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE CHARTER
(APPROVED AND EFFECTIVE AS OF MARCH 15, 2004)
PURPOSE
Syntel, Inc. (the "Corporation") shall maintain a Nominating and Corporate
Governance Committee (the "Committee") of the Board of Directors (the "Board")
of which shall serve in an advisory capacity to the Board. The primary purpose
of the Committee is to:
- Identify and recommend to the Board nominees qualified to serve on the
Board and Board committees;
- Develop and recommend to the Board for its approval a set of Corporate
Governance Principles applicable to the Corporation and, after their
adoption, to review and assess their adequacy;
- Oversee the evaluation of the Board and Corporation management; and
- Make recommendations regarding director nominees submitted by
shareholders of the Corporation and develop procedures for reviewing and
handling shareholder proposals.
Whenever the Corporation is legally required by law, contract or otherwise
to provide third parties with the ability to nominate directors, the selection
and nomination of such directors shall not be subject to the provisions of this
Charter.
MEMBERSHIP
The Committee shall consist of at least three members, each of whom shall
satisfy the independence and experience requirements of applicable law and the
Nasdaq Stock Market ("Nasdaq"). The Committee members and the Chairperson of the
Committee shall be recommended by the committee and appointed by the Board and
may be removed by the Board, with or without cause.
MEETINGS
The Committee shall meet as often as it determines is appropriate to carry
out its responsibilities under this Charter. The Committee will meet from time
to time in executive sessions without management participation. A majority of
the members of the Committee shall constitute a quorum for the transaction of
business.
RESPONSIBILITIES
The Committee has the authority to retain and terminate, and shall have
sole authority over any independent legal, financial or other advisors as it may
consider necessary to carry out its responsibilities under this Charter, without
conferring with or obtaining the approval of management or the full Board. This
authority shall include the sole authority to retain and terminate any search
firm used to identify director candidates and sole authority to approve the
search firm's fees and other retention terms. Except to the extent prohibited by
NASDAQ rules and state law, the Committee may delegate its authority to
subcommittees when it deems appropriate and in the best interests of the
Corporation.
The Committee's responsibilities include the following:
1. Annually review and evaluate its own performance and report to the Board
on such evaluation.
2. Develop and establish criteria, which the Board shall approve, for Board
membership and oversee searches to identify qualified individuals. The
Committee shall recommend that the Board select at
B-1
each annual meeting or as vacancies are otherwise required to be filled,
nominees for Board membership. In making its recommendations, the Committee
shall:
- Review candidates' qualifications for membership on the Board based on
criteria approved by the Board. Criteria may include judgment, skill,
diversity (including factors such as race, gender or experience),
integrity, experience with businesses and other organizations of
comparable size, the interplay of the candidate's experience with the
experience of other Board members, and the extent to which the
candidate would be a desirable addition to the Board or any Board
committee;
- Review the independence of candidates as required under any applicable
law and NASDAQ rules;
- Review any director candidates submitted by shareholders;
- In evaluating incumbent Board members, the Committee shall also
consider the incumbent Board member's past performance in making its
evaluation; and
- Consider any other factors that are set forth in the Corporation's
Corporate Governance Principles or are deemed appropriate by the
Committee.
3. Develop and recommend to the Board the Corporate Governance Principles
for the Corporation. Periodically the Committee shall review and
reassess the adequacy of such Corporate Governance Principles and
recommend any proposed changes to the Board. The Committee shall also
periodically review and reassess the adequacy of the Corporation's Code
of Ethical Conduct as it relates to directors, and shall oversee
compliance with the Code of Ethical Conduct by directors. The Committee
shall generally advise the Board on the corporate governance structure
and conduct of the Board.
4. Oversee the annual self-evaluation of the Board and its committees and
assist and report on such process and the results of the evaluations,
including any recommendations for proposed changes to the Board. The
Committee shall periodically review the size and responsibilities of the
Board and its committees and recommend any proposed changes to the
Board. The Committee shall evaluate the independence of each director on
an annual basis, and shall report such evaluation to the Board.
5. Oversee the annual evaluations of Corporation management.
6. Annually review and assess the adequacy of this Charter and recommend
any proposed changes to the Board for approval.
7. Certify to Nasdaq that it has adopted this Charter and that this Charter
properly addresses the nominations process as required under the federal
securities laws.
8. Review any conflicts of interest that may affect the Corporation or any
of its executive officers or Board members. Reports to the Board should
be made to address any conflict of interest issue as deemed necessary by
the Committee.
9. The Committee shall develop orientation and continuing education
guidelines for Board and Board committee members. The Committee shall
periodically review these guidelines and monitor and evaluate, at least
annually, each Board or committee member's cooperation in fulfilling
such guidelines.
10. The Committee shall make recommendations to the Board regarding
meetings involving non-management directors. Recommendations should
include frequency of such meetings, who should preside over such
meetings and any other matter deemed important by the Committee.
11. Review and make recommendations to the Board regarding proposals of
shareholders that relate to corporate governance and establish
procedures for handling such proposals.
The Committee shall keep minutes of each meeting held and report to the
Board periodically. This report shall include a review of any recommendations or
issues that arise with respect to Board or committee nominees or membership,
Board performance, corporate governance and any other matters that the Committee
deems appropriate or is requested to be included by the Board. When presenting
any recommendation or advice to the Board, the Committee will provide such
background and supporting information as may be necessary for the Board to make
an informed decision.
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[SYNTEL LOGO]
[ ] Mark this box with an X if you have made
changes to your name or address details
above.
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ANNUAL MEETING PROXY CARD
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[A] ELECTION OF DIRECTORS
1. The Board of Directors recommends a vote FOR the listed nominees.
FOR WITHHOLD
01 - George R. Mrkonic [ ] [ ]
02 - Vasant Raval [ ] [ ]
[B] AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR INSTRUCTIONS TO BE EXECUTED.
Please date this proxy and sign exactly as your name appears hereon. If you sign as attorney, executor, administrator, trustee,
guardian, custodian, or corporate official, please give your full title in such capacity.
Signature 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
/ /
-------------------------------------------------- -------------------------------------------------- ----------------
--------------------------------------------------------------------------------
PROXY - SYNTEL, INC.
--------------------------------------------------------------------------------
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS - JUNE 3, 2004
The undersigned appoints Bharat Desai and Daniel M. Moore, and each of them, as
proxies with full power of substitution and revocation to vote, as designated on
the reverse side hereof, all the Common Stock of Syntel, Inc. which the
undersigned has power to vote, with all powers which the undersigned would
possess if personally present, at the annual meeting of stockholders thereof to
be held on June 3, 2004, or at any adjournment thereof.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NAMED
NOMINEES. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH THE PROXIES' JUDGMENT.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)