SlideShare uma empresa Scribd logo
1 de 12
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

                Draft Guidelines on Employee Stock Option Plans/
                 Employee Stock Purchase Plans (ESOP/ ESPP)

1    Definitions

i)   Director

     Director is a person who holds the office of Director under the Companies Act.

ii) Employee

     Employee means:

     a) a permanent employee of the company working in India or abroad ; or

     b) a director of the company whether a whole time director or not

     c) an employee as defined in (a) or (b) above of a subsidiary, domestic or overseas, or of
        a holding company of the company.

i)   Employee Compensation

     Total employee compensation means the total cost incurred by the company towards
     employee compensation including basic salary, dearness allowance, other allowances,
     bonuses and commissions, and the value of all perquisites provided, but does not include

     a) the fair value of the options granted under an ESOP; and

     b) the price discount of shares issued under an ESPP.

i)   Employee Stock Option Plan (ESOP)

     Employee Stock Option Plan (ESOP) means a plan under which the company grants
     options to employees.

ii) Employee Stock Purchase Plan (ESPP)

     Employee Stock Purchase Plan (ESPP) means a plan under which the company offers
     shares to employees as part of a public issue or otherwise.

iii) Exercise

     The act of exercise implies an application being made by the employee to the company to
     have the options vested in him issued as shares upon payment of the option price.
     Exercise can take place as specified after vesting.




SECURITIES AND EXCHANGE BOARD OF INDIA                                                       10
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

iv) Exercise period

     Exercise period means the time period after vesting within which the employee should
     exercise his right to buy the shares by payment of the option price on the options vested in
     him. If the exercise period lapses the vested option lapses and no right shall accrue to the
     employee thereafter. The employee may exercise all the options vested in him in one
     stroke or choose to exercise a number of options within the exercise period. Unless shares
     are issued on exercise, the employee shall have no right to receive any dividend or to vote
     or in any manner enjoy the benefits of a shareholder.

v)   Grant

     Grant is a process by which an employee is given an option. It is the delivering of the
     options to the employee. The grant shall specify the number of options given, the time of
     vesting, etc.

vi) Independent Director

     A director of the company who is not a promoter or part of the promoter group and who
     is not a whole time director.

vii) Market Price

     Market Price of a share on a given date means the closing price on that date in the stock
     exchange on which it is listed. If the shares are listed on more than one stock exchange,
     but quoted only on one stock exchange on the given date, then the price on that stock
     exchange should be considered. If the share price is quoted on more than one stock
     exchange, then the stock exchange where there is highest trading volume during that date
     should be considered. If shares are not quoted on the given date, then the share price on
     the next trading day should be considered.

viii) Option

     An option is a right but not an obligation granted to an employee under the ESOP to
     apply for and be allotted shares of the company at a price determined earlier, during or
     within a specific period of time, subject to the requirements of vesting.

ix) Option price/ grant price/ exercise price

     An Option price/ grant price/ exercise price shall mean the price payable by the employee,
     determined by the Compensation Committee of the Board of the company for exercising
     the option granted to the him. In other words, this will be the price at which the employee
     will exercise his option.




SECURITIES AND EXCHANGE BOARD OF INDIA                                                          11
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

x)    Promoter and Promoter Group:

      Promoter and promoter group shall be as defined in Clarification XIII of the Disclosure
      and Investor Protection Guidelines. Where a promoter of a company is a body corporate,
      the promoters of that body corporate shall also deemed to be promoters of the company.

xi) Share

      Share means equity shares, non voting shares (as and when introduced) and securities
      convertible into equity shares or non voting shares and shall include ADRs, GDRs or
      other depository receipts representing underlying equity shares, non voting shares or
      securities convertible into equity shares or non voting shares.

xii) Subsidiary/ holding company:

      Subsidiary and holding company shall be as defined in Section 4 of Companies Act, 1956

xiii) Up- front payment

      Up-front payment means amount, if any, payable by the employee at the time of grant of
      option. This amount may be adjusted against the exercise price payable subsequently for
      acquiring the shares on exercising the options. This up-front amount payable for the
      options would stand forfeited if the options are not exercised and may be refunded to the
      employee if the options are not vested, due to severance of employment.

xiv) Vesting

      Vesting means the process by which the employee gets the right to apply for and be issued
      shares of the company under the options granted to him. Till the vesting takes place, the
      employee does not have a right to apply for the shares. Upon vesting, the employee gets
      an unfettered right to apply for the issue of shares upon fulfilment of the conditions. In
      the event of an employee resigning from the services of the company or his employment
      being terminated for whatever reasons, all unvested options shall expire as on that date,
      but the employee would, subject to 2.7.4 (a), retain all the vested options.

xv) Vesting period

      Vesting period means the period over which the vesting of the options of the employee
      takes place. Vesting period can be a single time period or a series of time periods. In
      other words, vesting can take place in one stroke or in staggered time periods. For
      example, an employee may become entitled to have 500 options vested in him at the end
      of three years or of the 500 options granted to him, have 100 options vested in him at
      intervals of 12 months each.

1.2    Applicability

1.2.1 These Guidelines shall apply to any company whose shares are listed on any stock
      exchange in India.

SECURITIES AND EXCHANGE BOARD OF INDIA                                                        12
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

1.2.2 These guidelines will come into force with immediate effect. The stock exchanges are
      being advised separately that the shares issued pursuant to an ESOP would be eligible
      for listing only if such instruments were in accordance with these Guidelines.

2     Operation of Employee Stock Option Plans

2.1    Scope of Stock Option Plans

2.1.1 An employee who is a promoter or a part of the promoter group shall not be eligible to
      participate in the Employee Stock Option Plan of the company.

2.1.2 A director who either by himself or through his family or through any investment
      company, directly or indirectly holds more than 10% of the outstanding equity shares
      of the company shall not be eligible to participate in the Employee Stock Option Plan.

2.2    Shareholder Approval

2.2.1 The ESOP shall be approved by the shareholders by a special resolution. The
      resolution shall contain terms and conditions of the Plan which inter-alia shall include
      the following:

        a. Identification of classes of beneficiaries entitled to participate In the ESOP.

        b. Vesting of the Stock Option

        c. Period of exercise and process of exercise.

        d. Exercise price or pricing formula.

        e. The appraisal process for determining the eligibility of employees to the
           Stock Option Plan.

        f. Upper limit on the quantum of stock options to be issued in the aggregate.

        The special resolution shall also state that the company shall conform to the
        accounting policies mandated in 3.2.1.

2.2.2 Specific shareholder approval shall be obtained in the case of grant of stock options to
      employees of subsidiary /holding company

2.2.3 Grant of stock options to specific employees, during any one year, equal to or
      exceeding 1% of the issued capital (excluding outstanding warrants and conversions)
      of the company at the time of grant shall be subject to approval by the shareholders by
      way of separate resolution.

2.2.4 In extra ordinary situations, the company in general meeting may by special resolution
      vary the terms of options granted but not yet exercised in a manner not prejudicial to
      the interests of the option holders. The notice for such resolution shall provide full
SECURITIES AND EXCHANGE BOARD OF INDIA                                                       13
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

       details of the beneficiaries of such variation of terms and the rationale therefor. The
       provisions of 2.2.2 and 2.2.3 shall apply to such variation of terms as they do to the
       original grant of options.

2.3   Pricing

2.3.1 The companies will have the freedom to fix the exercise price at any level provided
      they conform to the accounting policies mandated in 3.2.1.

2.4   Stock Options outstanding at Public Issue

2.4.1 The provisions of the SEBI guidelines prohibiting initial public offering by companies
      having outstanding options shall not apply to employee stock options.

2.4.2 If any employee stock options are outstanding at the time of an initial public issue by
      an unlisted company, the promoters’ contribution shall be calculated with reference to
      the enlarged capital that would arise if all vested options are exercised.

2.4.3 If any employee stock options are outstanding at the time of a public issue, the offer
      document shall disclose all the information enumerated in 3.1.1.

2.5   Lock-in period, vesting and exercise of options

2.5.1 There should be a minimum period of one year between the grant of options and
      vesting.

2.5.2 There should be a maximum period of eight years between the grant of options and
      vesting.

2.5.3 Employee options must be exercised within a maximum period of five years from the
      date of vesting.

2.5.4 Shares issued in exercise of options shall not be subject to any lock-in period.

2.6   Non transferability of stock options

2.6.1 Options shall not be transferable, and only the employee shall be entitled to exercise
      the options. They can not be pledged, hypothecated, mortgaged or otherwise alienated
      in any other respect. However, the company may allow cashless system of exercise
      under which empanelled stock brokers (or, subject to company law requirements, the
      company itself) may fund the exercise price of the options against the sale proceeds of
      part or whole of the shares arising out of the exercise.

2.6.2 In the event of the death of the employee, while in employment, all the options granted
      to him as on the date of death shall pass along his estate and shall be fully vested in his
      estate as on that date and may be claimed by his legal heirs.



SECURITIES AND EXCHANGE BOARD OF INDIA                                                           14
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

2.6.3 In the event that the employee suffers a permanent incapacity while in employment, all
      the options granted to him as on the date of permanent incapacitation, shall fully vest
      in him on such date.

2.7    Compensation Committee of the Board

2.7.1 The Scheme would be administered under the superintendence and direction of a
      Compensation Committee of the Board of Directors. The Compensation Committee
      shall consist of a majority of independent directors.

2.7.2 The quantum of issue of options under an Employee Stock Option Plan to employees
      both in the aggregate and to any single employee shall be determined by the
      Compensation Committee subject to the limits laid down by the company in general
      meeting.

2.7.3 The Compensation Committee should put in place policies and systems to guard
      against violations of the SEBI (Insider Trading) Regulations, 1992 by employees in the
      course of the exercise of stock options.

2.7.4 The Compensation Committee shall formulate the detailed terms and conditions of the
      option scheme including

        a) the conditions under which options vested in employees may lapse in case of
           termination of employment for misconduct.

        b) the procedure for making a fair and reasonable adjustment to the number of
           options and to the exercise price in case of rights issues, bonus issues and
           other corporate actions

        c) the grant, vesting and exercise of options in case of employees who are on
           long leave or sabbatical

        d) the procedures for cashless exercise of options

2.7.5 The Compensation Committee may provide that in the event of an employee resigning
      from the services of the company or his employment being terminated for whatever
      reasons, the employee should exercise the vested options within a specified period after
      such resignation or termination.

3     Disclosure, accounting policies and audit

3.1    Directors’ Report

3.1.1 Board of Directors shall disclose either in the Directors Report or in the annexure to
      the Director’s Report, the following details of the Stock option plan:



SECURITIES AND EXCHANGE BOARD OF INDIA                                                         15
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

        a) The total number of shares covered by the Employee Stock Option scheme as
           approved by the shareholders

        b) The Pricing formula

        c) Options granted

        d) Options vested

        e) Options exercised

        f) Options forfeited

        g) Extinguishment or modification of options

        h) Money realised by exercise of options

        i) Total number of options in force

        j) Employee wise details of options granted to

             • Senior managerial personnel

             • any other employee who receives a grant in any one year of options
              amounting to 5% or more of options granted during that year.

        k) diluted Earnings Per Share (EPS) calculated in accordance with
          International Accounting Standard (IAS) 33

3.2   Accounting Policies

3.2.1 In respect of options granted during any accounting period, the accounting value of the
      options shall be treated as another form of employee compensation in the financial
      statements of the company. The accounting value of options shall be equal to the
      maximum of:

        a) the aggregate over all employee stock options granted during any
           accounting period of the excess of the fair value of the option over the
           specified percentage of the market value of the share on the date of grant of
           the option; or

        b) excess of the aggregate of the option discounts on all employee stock
           options granted during any accounting period over 20% of the total
           employee compensation as reported in the profit and loss account of that
           period.

        c) zero.



SECURITIES AND EXCHANGE BOARD OF INDIA                                                     16
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

          For this purpose:

          1. Fair value means the option discount, or, if the company so chooses, the
             value of the option using the Black Scholes formula or other similar
             valuation method.

          2. Option discount means the excess of the market price of the share at the
             time of grant of the option over the exercise price of the option (including
             up-front payment if any)

          3. Specified percentage means 25% in case of options granted within 12
             months of the effective date, 20% in case of options granted during the 13
             to 24 months after the effective date, and 15% in case of options granted
             after 24 months of the effective date. Effective date is the date on which
             these guidelines come into effect.

3.2.2 Where the accounting value is accounted for as employee compensation in accordance
      with 3.2.1, the amount shall be amortised on a straight-line basis over the vesting
      period.

3.2.3 When an unvested employee stock option lapses by virtue of the employee not
      conforming to the vesting conditions after the accounting value of the option has
      already been accounted for as employee compensation, this accounting treatment shall
      be reversed by a credit to employee compensation expense equal to the amortized
      portion of the accounting value of the lapsed options and a credit to deferred employee
      compensation expense equal to the unamortized portion.

3.2.4 When a vested employee stock option lapses on expiry of the exercise period, after the
      accounting value of the option has already been accounted for as employee
      compensation, this accounting treatment shall be reversed by a credit to employee
      compensation expense.

3.2.5 The accounting treatment prescribed above can be illustrated by the following
      numerical example. Suppose a company grants 500 options on 1/4/1999 at Rs 40 when
      the market price is Rs 160, the vesting period is two and a half years, the maximum
      exercise period is one year and the total employee compensation for the year 1999-
      2000 is Rs 900,000. Also supposed that 150 unvested options lapse on 1/5/2001, 300
      options are exercised on 30/6/2002 and 50 vested options lapse at the end of the
      exercise period. The accounting value of the option being the maximum of:

a) 500 x [(160-40) - 25% x 160] = 500 x [120 - 40] = 500 x 80 = 40,000

b) 500 x (160-40) - 10% x 900,000 = 60,000 - 90,000 = -30,000

c) zero

would be equal to Rs 40,000.


SECURITIES AND EXCHANGE BOARD OF INDIA                                                      17
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

The accounting entries would be as follows:

1/4/1999    Deferred Employee Compensation Expense              40,000
            Employee Stock Options Outstanding                           40,000
            (Grant of 500 options at an accounting value
            of Rs 80 each)
31/3/2000   Employee Compensation Expense                       16,000
            Deferred Employee Compensation Expense                       16,000
            (Amortisation of the deferred compensation
            over two and a half years on straight-line basis)
31/3/2001   Employee Compensation Expense                       16,000
            Deferred Employee Compensation Expense                       16,000
            (Amortisation of the deferred compensation
            over two and a half years on straight-line basis)
1/5/2001    Employee Stock Options Outstanding                  12,000
            Employee Compensation Expense                                 9,600
            Deferred Employee Compensation Expense                        2,400
            (Reversal of compensation accounting on lapse
            of 150 unvested options)
31/3/2002   Employee Compensation Expense                        5,600
            Deferred Employee Compensation Expense                        5,600
            (Amortisation of the deferred compensation
            over two and a half years on straight-line basis)
30/6/2002   Cash                                                12,000
            Employee Stock Options Outstanding                  24,000
            Paid Up Equity Capital                                        3,000
            Share Premium Account                                        33,000
            (Exercise of 300 options at an exercise price of
            Rs 40 each and an accounting value of Rs 80
            each)
1/10/2002   Employee Stock Options Outstanding                   4,000
            Employee Compensation Expense                                 4,000
            (Reversal of compensation accounting on lapse
            of 50 vested options at end of exercise period)


The T-Accounts for Employee Stock Options Outstanding and Deferred Employee
Compensation Expense would be as follows:




SECURITIES AND EXCHANGE BOARD OF INDIA                                            18
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

                     Employee Stock Options Outstanding Account
1/5/2001    Employee         12,000 1/4/1999       Deferred                     40,000
            Compensation/                          Compensation
            Deferred
            Compensation

30/6/2002 Paid Up Capital/        24,000
          Share Premium

1/10/2002 Employee                 4,000
          Compensation

                                  40,000                                        40,000



                  Deferred Employee Compensation Expense Account
1/4/1999   ESOP Outstanding 40,000 31/3/2000 Employee                           16,000
                                                 Compensation

                                           31/3/2001   Employee                 16,000
                                                       Compensation

                                           1/5/2001    ESOP Outstanding          2,400

                                           31/3/2002   Employee                  5,600
                                                       Compensation

                                  40,000                                        40,000



Employee Stock Options Outstanding will appear in the Balance Sheet as part of Net Worth
or Shareholders’ Equity. Deferred Employee Compensation will appear in the Balance Sheet
as a negative item as part of Net Worth or Shareholders’ Equity.

3.3   Certificate from Auditors

3.3.1 In the case of every company that has passed a resolution for an Employee Stock
      Option scheme under 2.2.1 of these guidelines, the Board of Directors shall at each
      annual general meeting place before the members a certificate from the auditors of the
      company that the scheme has been implemented in accordance with these guidelines
      and in accordance with the resolution of the company in general meeting.




SECURITIES AND EXCHANGE BOARD OF INDIA                                                    19
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

4     Employee Stock Purchase Plan (ESPP)

4.1    Scope of Employee Stock Purchase Plans

4.1.1 An employee who is a promoter or a part of the promoter group shall not be eligible to
      participate in the Employee Stock Purchase Plan of the company.

4.1.2 A director who either by himself or through his family or through any investment
      company, directly or indirectly holds more than 10% of the outstanding equity shares
      of the company shall not be eligible to participate in the Employee Stock Purchase
      Plan.

4.2    Shareholder Approval

4.2.1 The ESPP shall be approved by the shareholders by a special resolution which shall
      specify the price of the shares and also the number of shares to be offered to each
      employee. The number of shares offered may be different for different categories of
      employees. The special resolution shall state that the company shall conform to the
      accounting policies mandated in 4.4.2.

4.3    Pricing and Lock-in

4.3.1 Companies shall have full freedom to price the shares under an ESPP at any level
      provided they conform to the provisions of 4.4.2.

4.3.2 Shares issued under an ESPP shall be locked in for a period of one year. However if
      the ESPP is part of a public issue and the shares are issued to employees at the same
      price as in the public issue, the shares shall not be subject to any lock-in

4.4    Disclosure and Accounting Policies

4.4.1 The details of the shares issued under the ESPP and the terms and conditions thereof
      shall be disclosed in the Directors’ report or in an annexure thereto.

4.4.2 In respect of shares issued under an ESPP during any accounting period, the
      accounting value of the shares so issued shall be treated as another form of employee
      compensation in the financial statements of the company. The accounting value of
      shares issued under ESPP shall be equal to the maximum of:

         a) the aggregate over all shares issued under ESPP during any accounting
            period of the excess of the price discount over the specified percentage of
            the market value of the shares on the date of issue;

         b) the excess of the aggregate of the price discounts on all shares issued under
            ESPP during any accounting period over 20% of the total employee
            compensation as reported in the profit and loss account of that period;


SECURITIES AND EXCHANGE BOARD OF INDIA                                                        20
REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION

           c) zero.

           For this purpose:

           1. Price discount means the excess of the market price of the shares at the
              date of issue over the price at which they are issued under the ESPP.

           2. Specified percentage means 25% in case of shares issued within 12 months
              of the effective date, 20% in case of shares issued during the 13 to 24
              months after the effective date, and 15% in case of shares issued after 24
              months of the effective date. Effective date is the date on which these
              guidelines come into effect.

4.4.3 The accounting treatment prescribed above can be illustrated by the following
      numerical example. Suppose a company issues 500 shares on 1/4/1999 under an ESPP
      at Rs 40 when the market price is Rs 160 and the total employee compensation for the
      year 1999-2000 is Rs 900,000. The accounting value of the shares being the maximum
      of:

       a) 500 x [(160-40) - 25% x 160] = 500 x [120 - 40] = 500 x 80 = 40,000

       b) 500 x (160-40) - 10% x 900,000 = 60,000 - 90,000 = -30,000

       c) zero

       would be equal to Rs 40,000.

The accounting entry would be as follows

1/4/1999      Cash                                              20,000
              Employee Compensation Expense                     40,000
              Paid Up Equity Capital                                              5,000
              Share Premium Account                                              55,000
              (Issue of 500 shares under ESPP at a price of
              Rs 20 each when market price is Rs 100)


4.5   Preferential Allotment

Nothing in these guidelines shall apply to shares issued to employees in full compliance
with the SEBI Guidelines on Preferential Allotment.




SECURITIES AND EXCHANGE BOARD OF INDIA                                                     21

Mais conteúdo relacionado

Mais procurados

ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)Legal Buddy
 
Corporate accounting
Corporate accounting Corporate accounting
Corporate accounting Raman Dhiman
 
[DIY] Employee Stock Options the right way
[DIY] Employee Stock Options the right way[DIY] Employee Stock Options the right way
[DIY] Employee Stock Options the right wayPrequate Advisory
 
Esop As Long Term Incentive
Esop As Long Term IncentiveEsop As Long Term Incentive
Esop As Long Term Incentivejayminkansara
 
ESOPs: A new genes under Companies Act 2013
ESOPs: A new genes under Companies Act 2013ESOPs: A new genes under Companies Act 2013
ESOPs: A new genes under Companies Act 2013Corporate Professionals
 
Employee stock option plan
Employee stock option planEmployee stock option plan
Employee stock option planAltacit Global
 
ESOP under New Companies Act
ESOP under New Companies ActESOP under New Companies Act
ESOP under New Companies ActSudhir Chandi
 
Key Benefits of Employee Stock Option Plan India
Key Benefits of Employee Stock Option Plan IndiaKey Benefits of Employee Stock Option Plan India
Key Benefits of Employee Stock Option Plan IndiaWilliam Daniels
 
EMPLOYEE STOCK OPTION PLAN (ESOP)
EMPLOYEE STOCK OPTION PLAN (ESOP)EMPLOYEE STOCK OPTION PLAN (ESOP)
EMPLOYEE STOCK OPTION PLAN (ESOP)Dr. Abzal Basha H S
 
COMPENSATION SYSTEM MANAGEMENT :Esop and Eva
COMPENSATION SYSTEM MANAGEMENT :Esop and EvaCOMPENSATION SYSTEM MANAGEMENT :Esop and Eva
COMPENSATION SYSTEM MANAGEMENT :Esop and EvaVishakha Choudhary
 
ESOPS for Startups by Ms. Neela Badami
ESOPS for Startups by Ms. Neela Badami ESOPS for Startups by Ms. Neela Badami
ESOPS for Startups by Ms. Neela Badami Kesava Reddy
 
Dividing Stock Options In Divorce
Dividing Stock Options In DivorceDividing Stock Options In Divorce
Dividing Stock Options In Divorcetheaglazer
 
Phantom stock options start up
Phantom stock options  start upPhantom stock options  start up
Phantom stock options start upIndoAsia Partners
 
ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)LEGAL BUDDY
 
Understanding Esop & Its Importance.
Understanding Esop & Its Importance.Understanding Esop & Its Importance.
Understanding Esop & Its Importance.LetsComply
 

Mais procurados (20)

ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)
 
STARTUP-ESOPs
STARTUP-ESOPsSTARTUP-ESOPs
STARTUP-ESOPs
 
Corporate accounting
Corporate accounting Corporate accounting
Corporate accounting
 
[DIY] Employee Stock Options the right way
[DIY] Employee Stock Options the right way[DIY] Employee Stock Options the right way
[DIY] Employee Stock Options the right way
 
Esop
EsopEsop
Esop
 
Esop As Long Term Incentive
Esop As Long Term IncentiveEsop As Long Term Incentive
Esop As Long Term Incentive
 
Esop benefits
Esop benefitsEsop benefits
Esop benefits
 
ESOPs: A new genes under Companies Act 2013
ESOPs: A new genes under Companies Act 2013ESOPs: A new genes under Companies Act 2013
ESOPs: A new genes under Companies Act 2013
 
Employee stock option plan
Employee stock option planEmployee stock option plan
Employee stock option plan
 
ESOP under New Companies Act
ESOP under New Companies ActESOP under New Companies Act
ESOP under New Companies Act
 
Employee stock option plan (esop)
Employee stock option plan (esop)Employee stock option plan (esop)
Employee stock option plan (esop)
 
Notes on esop
Notes on esopNotes on esop
Notes on esop
 
Key Benefits of Employee Stock Option Plan India
Key Benefits of Employee Stock Option Plan IndiaKey Benefits of Employee Stock Option Plan India
Key Benefits of Employee Stock Option Plan India
 
EMPLOYEE STOCK OPTION PLAN (ESOP)
EMPLOYEE STOCK OPTION PLAN (ESOP)EMPLOYEE STOCK OPTION PLAN (ESOP)
EMPLOYEE STOCK OPTION PLAN (ESOP)
 
COMPENSATION SYSTEM MANAGEMENT :Esop and Eva
COMPENSATION SYSTEM MANAGEMENT :Esop and EvaCOMPENSATION SYSTEM MANAGEMENT :Esop and Eva
COMPENSATION SYSTEM MANAGEMENT :Esop and Eva
 
ESOPS for Startups by Ms. Neela Badami
ESOPS for Startups by Ms. Neela Badami ESOPS for Startups by Ms. Neela Badami
ESOPS for Startups by Ms. Neela Badami
 
Dividing Stock Options In Divorce
Dividing Stock Options In DivorceDividing Stock Options In Divorce
Dividing Stock Options In Divorce
 
Phantom stock options start up
Phantom stock options  start upPhantom stock options  start up
Phantom stock options start up
 
ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)ESOP for young entrepreneur(s)
ESOP for young entrepreneur(s)
 
Understanding Esop & Its Importance.
Understanding Esop & Its Importance.Understanding Esop & Its Importance.
Understanding Esop & Its Importance.
 

Destaque

Experimentar y aprender: las claves del nuevo emprendimiento
Experimentar y aprender: las claves del nuevo emprendimientoExperimentar y aprender: las claves del nuevo emprendimiento
Experimentar y aprender: las claves del nuevo emprendimientoAramis Rodriguez
 
Start ups, Investors and Finance a brief
Start ups, Investors and Finance a brief Start ups, Investors and Finance a brief
Start ups, Investors and Finance a brief Prashant Sinha
 
Request For Training Multiple Attendees 144
Request For Training   Multiple Attendees 144Request For Training   Multiple Attendees 144
Request For Training Multiple Attendees 144swati18
 
Praxis Tea IL Leadership Feb09
Praxis Tea IL Leadership Feb09Praxis Tea IL Leadership Feb09
Praxis Tea IL Leadership Feb09Alex Moss
 
ESOP and Employee Commitment
ESOP and Employee CommitmentESOP and Employee Commitment
ESOP and Employee CommitmentAlka Dwivedi, PhD
 
Business Succession: The ESOP Model
Business Succession: The ESOP ModelBusiness Succession: The ESOP Model
Business Succession: The ESOP ModelPeter E. Jones
 
Norbert Sluzewski capabilities presentation
Norbert Sluzewski capabilities presentationNorbert Sluzewski capabilities presentation
Norbert Sluzewski capabilities presentationNorbert Sluzewski
 
Finance for Start-ups
Finance for Start-upsFinance for Start-ups
Finance for Start-upsAnjana Vivek
 
Employee Stock Option Plan
Employee Stock Option PlanEmployee Stock Option Plan
Employee Stock Option PlanAnurag Dua
 

Destaque (13)

Experimentar y aprender: las claves del nuevo emprendimiento
Experimentar y aprender: las claves del nuevo emprendimientoExperimentar y aprender: las claves del nuevo emprendimiento
Experimentar y aprender: las claves del nuevo emprendimiento
 
Start ups, Investors and Finance a brief
Start ups, Investors and Finance a brief Start ups, Investors and Finance a brief
Start ups, Investors and Finance a brief
 
Request For Training Multiple Attendees 144
Request For Training   Multiple Attendees 144Request For Training   Multiple Attendees 144
Request For Training Multiple Attendees 144
 
Praxis Tea IL Leadership Feb09
Praxis Tea IL Leadership Feb09Praxis Tea IL Leadership Feb09
Praxis Tea IL Leadership Feb09
 
ESOP and Employee Commitment
ESOP and Employee CommitmentESOP and Employee Commitment
ESOP and Employee Commitment
 
Business Succession: The ESOP Model
Business Succession: The ESOP ModelBusiness Succession: The ESOP Model
Business Succession: The ESOP Model
 
Norbert Sluzewski capabilities presentation
Norbert Sluzewski capabilities presentationNorbert Sluzewski capabilities presentation
Norbert Sluzewski capabilities presentation
 
Global Start-Ups Exchange Program
Global Start-Ups Exchange ProgramGlobal Start-Ups Exchange Program
Global Start-Ups Exchange Program
 
Exploratory data analysis coursera
Exploratory data analysis courseraExploratory data analysis coursera
Exploratory data analysis coursera
 
ESOP Guardian
ESOP GuardianESOP Guardian
ESOP Guardian
 
Finance for Start-ups
Finance for Start-upsFinance for Start-ups
Finance for Start-ups
 
Employee Stock Option Plan
Employee Stock Option PlanEmployee Stock Option Plan
Employee Stock Option Plan
 
Organizational change-model
Organizational change-modelOrganizational change-model
Organizational change-model
 

Semelhante a Esop Guidline 349

Esop final
Esop finalEsop final
Esop finaldey1010
 
PPT Template_Name of Intern.pptx
PPT Template_Name of Intern.pptxPPT Template_Name of Intern.pptx
PPT Template_Name of Intern.pptxvishu447762
 
SEBI (Share Based Employee Benefits) Regulations, 2014
SEBI (Share Based Employee Benefits) Regulations, 2014SEBI (Share Based Employee Benefits) Regulations, 2014
SEBI (Share Based Employee Benefits) Regulations, 2014Mmjc Advisory
 
Employee Stock Option Scheme (ESOP) and Sweat Equity Shares
Employee Stock Option Scheme (ESOP) and Sweat Equity SharesEmployee Stock Option Scheme (ESOP) and Sweat Equity Shares
Employee Stock Option Scheme (ESOP) and Sweat Equity SharesDVSResearchFoundatio
 
Bonus shares and_esop
Bonus shares and_esopBonus shares and_esop
Bonus shares and_esopASIF KHAN
 
Bonus shares and_esop
Bonus shares and_esopBonus shares and_esop
Bonus shares and_esopASIF KHAN
 
25325cajournal jan2012 21
25325cajournal jan2012 2125325cajournal jan2012 21
25325cajournal jan2012 21Ankit Kumar
 
Shares and Debentures - Financial Management
Shares and Debentures - Financial ManagementShares and Debentures - Financial Management
Shares and Debentures - Financial ManagementGargi Kapadia
 
Share nd share capital
Share nd share capitalShare nd share capital
Share nd share capitalM shafiq
 
Bonus issue checklist
Bonus issue checklistBonus issue checklist
Bonus issue checklistmanoj4474
 
Equity Incentives and Bonus Plans for Employees, Consultants & Advisors
Equity Incentives and Bonus Plans for Employees, Consultants & AdvisorsEquity Incentives and Bonus Plans for Employees, Consultants & Advisors
Equity Incentives and Bonus Plans for Employees, Consultants & AdvisorsChirag Charlie Patel, PMP
 
Sebi corporate governance circular_17apr2014
Sebi corporate governance circular_17apr2014Sebi corporate governance circular_17apr2014
Sebi corporate governance circular_17apr2014usacharya
 
Rights issue - bonus shares- sweat equity shares - employee stock option scheme
Rights issue - bonus shares- sweat equity shares - employee stock option schemeRights issue - bonus shares- sweat equity shares - employee stock option scheme
Rights issue - bonus shares- sweat equity shares - employee stock option schemesuriya prabha
 
Sebi(icdr)regulations and rights issue
Sebi(icdr)regulations and rights issueSebi(icdr)regulations and rights issue
Sebi(icdr)regulations and rights issueSuresh Sundar
 
Corporate restructuring
Corporate restructuringCorporate restructuring
Corporate restructuringRahul Vaghela
 
Mock Term Sheet Negotiation w/ Daniel Zimmermann and John Demeter
Mock Term Sheet Negotiation w/ Daniel Zimmermann and John DemeterMock Term Sheet Negotiation w/ Daniel Zimmermann and John Demeter
Mock Term Sheet Negotiation w/ Daniel Zimmermann and John DemeterStanford Venture Studio
 

Semelhante a Esop Guidline 349 (20)

Esop final
Esop finalEsop final
Esop final
 
PPT Template_Name of Intern.pptx
PPT Template_Name of Intern.pptxPPT Template_Name of Intern.pptx
PPT Template_Name of Intern.pptx
 
SEBI (Share Based Employee Benefits) Regulations, 2014
SEBI (Share Based Employee Benefits) Regulations, 2014SEBI (Share Based Employee Benefits) Regulations, 2014
SEBI (Share Based Employee Benefits) Regulations, 2014
 
Employee Stock Option Scheme (ESOP) and Sweat Equity Shares
Employee Stock Option Scheme (ESOP) and Sweat Equity SharesEmployee Stock Option Scheme (ESOP) and Sweat Equity Shares
Employee Stock Option Scheme (ESOP) and Sweat Equity Shares
 
Bonus shares and_esop
Bonus shares and_esopBonus shares and_esop
Bonus shares and_esop
 
Bonus shares and_esop
Bonus shares and_esopBonus shares and_esop
Bonus shares and_esop
 
25325cajournal jan2012 21
25325cajournal jan2012 2125325cajournal jan2012 21
25325cajournal jan2012 21
 
Shares and Debentures - Financial Management
Shares and Debentures - Financial ManagementShares and Debentures - Financial Management
Shares and Debentures - Financial Management
 
Share nd share capital
Share nd share capitalShare nd share capital
Share nd share capital
 
Bonus issue checklist
Bonus issue checklistBonus issue checklist
Bonus issue checklist
 
Equity Incentives and Bonus Plans for Employees, Consultants & Advisors
Equity Incentives and Bonus Plans for Employees, Consultants & AdvisorsEquity Incentives and Bonus Plans for Employees, Consultants & Advisors
Equity Incentives and Bonus Plans for Employees, Consultants & Advisors
 
Share Based Payments
Share Based PaymentsShare Based Payments
Share Based Payments
 
Sebi corporate governance circular_17apr2014
Sebi corporate governance circular_17apr2014Sebi corporate governance circular_17apr2014
Sebi corporate governance circular_17apr2014
 
Rights issue - bonus shares- sweat equity shares - employee stock option scheme
Rights issue - bonus shares- sweat equity shares - employee stock option schemeRights issue - bonus shares- sweat equity shares - employee stock option scheme
Rights issue - bonus shares- sweat equity shares - employee stock option scheme
 
Phantom Stock Option Plan
Phantom Stock Option Plan Phantom Stock Option Plan
Phantom Stock Option Plan
 
Sebi(icdr)regulations and rights issue
Sebi(icdr)regulations and rights issueSebi(icdr)regulations and rights issue
Sebi(icdr)regulations and rights issue
 
shares
sharesshares
shares
 
Corporate restructuring
Corporate restructuringCorporate restructuring
Corporate restructuring
 
Capital Markets
Capital MarketsCapital Markets
Capital Markets
 
Mock Term Sheet Negotiation w/ Daniel Zimmermann and John Demeter
Mock Term Sheet Negotiation w/ Daniel Zimmermann and John DemeterMock Term Sheet Negotiation w/ Daniel Zimmermann and John Demeter
Mock Term Sheet Negotiation w/ Daniel Zimmermann and John Demeter
 

Mais de swati18

Process Development And Implementation 777
Process Development And Implementation 777Process Development And Implementation 777
Process Development And Implementation 777swati18
 
Office Policy Manual Ebook 108
Office Policy Manual Ebook 108Office Policy Manual Ebook 108
Office Policy Manual Ebook 108swati18
 
Od Prt3 420
Od Prt3 420Od Prt3 420
Od Prt3 420swati18
 
Od Prt2 205
Od Prt2 205Od Prt2 205
Od Prt2 205swati18
 
Od Prt1 130
Od Prt1 130Od Prt1 130
Od Prt1 130swati18
 
Loss Theory 157
Loss Theory 157Loss Theory 157
Loss Theory 157swati18
 
Impact Of Hrm On Org Climate 120
Impact Of Hrm On Org Climate 120Impact Of Hrm On Org Climate 120
Impact Of Hrm On Org Climate 120swati18
 
Hrproj Policyquickref 907
Hrproj Policyquickref 907Hrproj Policyquickref 907
Hrproj Policyquickref 907swati18
 
How To Conduct Survey 209
How To Conduct Survey 209How To Conduct Survey 209
How To Conduct Survey 209swati18
 
Firobsample 148
Firobsample 148Firobsample 148
Firobsample 148swati18
 
360 White Paper 04 520
360 White Paper 04 520360 White Paper 04 520
360 White Paper 04 520swati18
 
Employee Engagement.Doc
Employee Engagement.DocEmployee Engagement.Doc
Employee Engagement.Docswati18
 
A To Z On Training 1 320
A To Z On Training 1  320A To Z On Training 1  320
A To Z On Training 1 320swati18
 
Developing Leadership Skills 259
Developing Leadership Skills 259Developing Leadership Skills 259
Developing Leadership Skills 259swati18
 
Articles Jack Value Mapping Second Generation Performance Management 132
Articles Jack Value Mapping Second Generation Performance Management 132Articles Jack Value Mapping Second Generation Performance Management 132
Articles Jack Value Mapping Second Generation Performance Management 132swati18
 
Attrition Calculation
Attrition CalculationAttrition Calculation
Attrition Calculationswati18
 
Emp Engagemnt
Emp EngagemntEmp Engagemnt
Emp Engagemntswati18
 
Sap Overview 892[1]
Sap Overview 892[1]Sap Overview 892[1]
Sap Overview 892[1]swati18
 

Mais de swati18 (18)

Process Development And Implementation 777
Process Development And Implementation 777Process Development And Implementation 777
Process Development And Implementation 777
 
Office Policy Manual Ebook 108
Office Policy Manual Ebook 108Office Policy Manual Ebook 108
Office Policy Manual Ebook 108
 
Od Prt3 420
Od Prt3 420Od Prt3 420
Od Prt3 420
 
Od Prt2 205
Od Prt2 205Od Prt2 205
Od Prt2 205
 
Od Prt1 130
Od Prt1 130Od Prt1 130
Od Prt1 130
 
Loss Theory 157
Loss Theory 157Loss Theory 157
Loss Theory 157
 
Impact Of Hrm On Org Climate 120
Impact Of Hrm On Org Climate 120Impact Of Hrm On Org Climate 120
Impact Of Hrm On Org Climate 120
 
Hrproj Policyquickref 907
Hrproj Policyquickref 907Hrproj Policyquickref 907
Hrproj Policyquickref 907
 
How To Conduct Survey 209
How To Conduct Survey 209How To Conduct Survey 209
How To Conduct Survey 209
 
Firobsample 148
Firobsample 148Firobsample 148
Firobsample 148
 
360 White Paper 04 520
360 White Paper 04 520360 White Paper 04 520
360 White Paper 04 520
 
Employee Engagement.Doc
Employee Engagement.DocEmployee Engagement.Doc
Employee Engagement.Doc
 
A To Z On Training 1 320
A To Z On Training 1  320A To Z On Training 1  320
A To Z On Training 1 320
 
Developing Leadership Skills 259
Developing Leadership Skills 259Developing Leadership Skills 259
Developing Leadership Skills 259
 
Articles Jack Value Mapping Second Generation Performance Management 132
Articles Jack Value Mapping Second Generation Performance Management 132Articles Jack Value Mapping Second Generation Performance Management 132
Articles Jack Value Mapping Second Generation Performance Management 132
 
Attrition Calculation
Attrition CalculationAttrition Calculation
Attrition Calculation
 
Emp Engagemnt
Emp EngagemntEmp Engagemnt
Emp Engagemnt
 
Sap Overview 892[1]
Sap Overview 892[1]Sap Overview 892[1]
Sap Overview 892[1]
 

Último

Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toumarfarooquejamali32
 
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003believeminhh
 
Scrum Events & How to run them effectively
Scrum Events & How to run them effectivelyScrum Events & How to run them effectively
Scrum Events & How to run them effectivelyMarianna Nakou
 
Intellectual Property Licensing Examples
Intellectual Property Licensing ExamplesIntellectual Property Licensing Examples
Intellectual Property Licensing Examplesamberjiles31
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...AustraliaChapterIIBA
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.ukaroemirsr
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...Khaled Al Awadi
 
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)tazeenaila12
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...Brian Solis
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023Steve Rader
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsIntellect Design Arena Ltd
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsWristbands Ireland
 
PDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfPDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfHajeJanKamps
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarNathanielSchmuck
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfAnhNguyen97152
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhangmcgroupjeya
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursKaiNexus
 
Amazon ppt.pptx Amazon about the company
Amazon ppt.pptx Amazon about the companyAmazon ppt.pptx Amazon about the company
Amazon ppt.pptx Amazon about the companyfashionfound007
 

Último (20)

Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb to
 
WAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdfWAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdf
 
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
The Vietnam Believer Newsletter_MARCH 25, 2024_EN_Vol. 003
 
Scrum Events & How to run them effectively
Scrum Events & How to run them effectivelyScrum Events & How to run them effectively
Scrum Events & How to run them effectively
 
Intellectual Property Licensing Examples
Intellectual Property Licensing ExamplesIntellectual Property Licensing Examples
Intellectual Property Licensing Examples
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
 
7movierulz.uk
7movierulz.uk7movierulz.uk
7movierulz.uk
 
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...NewBase  25 March  2024  Energy News issue - 1710 by Khaled Al Awadi_compress...
NewBase 25 March 2024 Energy News issue - 1710 by Khaled Al Awadi_compress...
 
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
Harvard Business Review.pptx | Navigating Labor Unrest (March-April 2024)
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
 
NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023NASA CoCEI Scaling Strategy - November 2023
NASA CoCEI Scaling Strategy - November 2023
 
Upgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking ApplicationsUpgrade Your Banking Experience with Advanced Core Banking Applications
Upgrade Your Banking Experience with Advanced Core Banking Applications
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and Festivals
 
PDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdfPDT 88 - 4 million seed - Seed - Protecto.pdf
PDT 88 - 4 million seed - Seed - Protecto.pdf
 
Live-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry WebinarLive-Streaming in the Music Industry Webinar
Live-Streaming in the Music Industry Webinar
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
 
MC Heights construction company in Jhang
MC Heights construction company in JhangMC Heights construction company in Jhang
MC Heights construction company in Jhang
 
Developing Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, OursDeveloping Coaching Skills: Mine, Yours, Ours
Developing Coaching Skills: Mine, Yours, Ours
 
Amazon ppt.pptx Amazon about the company
Amazon ppt.pptx Amazon about the companyAmazon ppt.pptx Amazon about the company
Amazon ppt.pptx Amazon about the company
 

Esop Guidline 349

  • 1. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION Draft Guidelines on Employee Stock Option Plans/ Employee Stock Purchase Plans (ESOP/ ESPP) 1 Definitions i) Director Director is a person who holds the office of Director under the Companies Act. ii) Employee Employee means: a) a permanent employee of the company working in India or abroad ; or b) a director of the company whether a whole time director or not c) an employee as defined in (a) or (b) above of a subsidiary, domestic or overseas, or of a holding company of the company. i) Employee Compensation Total employee compensation means the total cost incurred by the company towards employee compensation including basic salary, dearness allowance, other allowances, bonuses and commissions, and the value of all perquisites provided, but does not include a) the fair value of the options granted under an ESOP; and b) the price discount of shares issued under an ESPP. i) Employee Stock Option Plan (ESOP) Employee Stock Option Plan (ESOP) means a plan under which the company grants options to employees. ii) Employee Stock Purchase Plan (ESPP) Employee Stock Purchase Plan (ESPP) means a plan under which the company offers shares to employees as part of a public issue or otherwise. iii) Exercise The act of exercise implies an application being made by the employee to the company to have the options vested in him issued as shares upon payment of the option price. Exercise can take place as specified after vesting. SECURITIES AND EXCHANGE BOARD OF INDIA 10
  • 2. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION iv) Exercise period Exercise period means the time period after vesting within which the employee should exercise his right to buy the shares by payment of the option price on the options vested in him. If the exercise period lapses the vested option lapses and no right shall accrue to the employee thereafter. The employee may exercise all the options vested in him in one stroke or choose to exercise a number of options within the exercise period. Unless shares are issued on exercise, the employee shall have no right to receive any dividend or to vote or in any manner enjoy the benefits of a shareholder. v) Grant Grant is a process by which an employee is given an option. It is the delivering of the options to the employee. The grant shall specify the number of options given, the time of vesting, etc. vi) Independent Director A director of the company who is not a promoter or part of the promoter group and who is not a whole time director. vii) Market Price Market Price of a share on a given date means the closing price on that date in the stock exchange on which it is listed. If the shares are listed on more than one stock exchange, but quoted only on one stock exchange on the given date, then the price on that stock exchange should be considered. If the share price is quoted on more than one stock exchange, then the stock exchange where there is highest trading volume during that date should be considered. If shares are not quoted on the given date, then the share price on the next trading day should be considered. viii) Option An option is a right but not an obligation granted to an employee under the ESOP to apply for and be allotted shares of the company at a price determined earlier, during or within a specific period of time, subject to the requirements of vesting. ix) Option price/ grant price/ exercise price An Option price/ grant price/ exercise price shall mean the price payable by the employee, determined by the Compensation Committee of the Board of the company for exercising the option granted to the him. In other words, this will be the price at which the employee will exercise his option. SECURITIES AND EXCHANGE BOARD OF INDIA 11
  • 3. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION x) Promoter and Promoter Group: Promoter and promoter group shall be as defined in Clarification XIII of the Disclosure and Investor Protection Guidelines. Where a promoter of a company is a body corporate, the promoters of that body corporate shall also deemed to be promoters of the company. xi) Share Share means equity shares, non voting shares (as and when introduced) and securities convertible into equity shares or non voting shares and shall include ADRs, GDRs or other depository receipts representing underlying equity shares, non voting shares or securities convertible into equity shares or non voting shares. xii) Subsidiary/ holding company: Subsidiary and holding company shall be as defined in Section 4 of Companies Act, 1956 xiii) Up- front payment Up-front payment means amount, if any, payable by the employee at the time of grant of option. This amount may be adjusted against the exercise price payable subsequently for acquiring the shares on exercising the options. This up-front amount payable for the options would stand forfeited if the options are not exercised and may be refunded to the employee if the options are not vested, due to severance of employment. xiv) Vesting Vesting means the process by which the employee gets the right to apply for and be issued shares of the company under the options granted to him. Till the vesting takes place, the employee does not have a right to apply for the shares. Upon vesting, the employee gets an unfettered right to apply for the issue of shares upon fulfilment of the conditions. In the event of an employee resigning from the services of the company or his employment being terminated for whatever reasons, all unvested options shall expire as on that date, but the employee would, subject to 2.7.4 (a), retain all the vested options. xv) Vesting period Vesting period means the period over which the vesting of the options of the employee takes place. Vesting period can be a single time period or a series of time periods. In other words, vesting can take place in one stroke or in staggered time periods. For example, an employee may become entitled to have 500 options vested in him at the end of three years or of the 500 options granted to him, have 100 options vested in him at intervals of 12 months each. 1.2 Applicability 1.2.1 These Guidelines shall apply to any company whose shares are listed on any stock exchange in India. SECURITIES AND EXCHANGE BOARD OF INDIA 12
  • 4. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION 1.2.2 These guidelines will come into force with immediate effect. The stock exchanges are being advised separately that the shares issued pursuant to an ESOP would be eligible for listing only if such instruments were in accordance with these Guidelines. 2 Operation of Employee Stock Option Plans 2.1 Scope of Stock Option Plans 2.1.1 An employee who is a promoter or a part of the promoter group shall not be eligible to participate in the Employee Stock Option Plan of the company. 2.1.2 A director who either by himself or through his family or through any investment company, directly or indirectly holds more than 10% of the outstanding equity shares of the company shall not be eligible to participate in the Employee Stock Option Plan. 2.2 Shareholder Approval 2.2.1 The ESOP shall be approved by the shareholders by a special resolution. The resolution shall contain terms and conditions of the Plan which inter-alia shall include the following: a. Identification of classes of beneficiaries entitled to participate In the ESOP. b. Vesting of the Stock Option c. Period of exercise and process of exercise. d. Exercise price or pricing formula. e. The appraisal process for determining the eligibility of employees to the Stock Option Plan. f. Upper limit on the quantum of stock options to be issued in the aggregate. The special resolution shall also state that the company shall conform to the accounting policies mandated in 3.2.1. 2.2.2 Specific shareholder approval shall be obtained in the case of grant of stock options to employees of subsidiary /holding company 2.2.3 Grant of stock options to specific employees, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant shall be subject to approval by the shareholders by way of separate resolution. 2.2.4 In extra ordinary situations, the company in general meeting may by special resolution vary the terms of options granted but not yet exercised in a manner not prejudicial to the interests of the option holders. The notice for such resolution shall provide full SECURITIES AND EXCHANGE BOARD OF INDIA 13
  • 5. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION details of the beneficiaries of such variation of terms and the rationale therefor. The provisions of 2.2.2 and 2.2.3 shall apply to such variation of terms as they do to the original grant of options. 2.3 Pricing 2.3.1 The companies will have the freedom to fix the exercise price at any level provided they conform to the accounting policies mandated in 3.2.1. 2.4 Stock Options outstanding at Public Issue 2.4.1 The provisions of the SEBI guidelines prohibiting initial public offering by companies having outstanding options shall not apply to employee stock options. 2.4.2 If any employee stock options are outstanding at the time of an initial public issue by an unlisted company, the promoters’ contribution shall be calculated with reference to the enlarged capital that would arise if all vested options are exercised. 2.4.3 If any employee stock options are outstanding at the time of a public issue, the offer document shall disclose all the information enumerated in 3.1.1. 2.5 Lock-in period, vesting and exercise of options 2.5.1 There should be a minimum period of one year between the grant of options and vesting. 2.5.2 There should be a maximum period of eight years between the grant of options and vesting. 2.5.3 Employee options must be exercised within a maximum period of five years from the date of vesting. 2.5.4 Shares issued in exercise of options shall not be subject to any lock-in period. 2.6 Non transferability of stock options 2.6.1 Options shall not be transferable, and only the employee shall be entitled to exercise the options. They can not be pledged, hypothecated, mortgaged or otherwise alienated in any other respect. However, the company may allow cashless system of exercise under which empanelled stock brokers (or, subject to company law requirements, the company itself) may fund the exercise price of the options against the sale proceeds of part or whole of the shares arising out of the exercise. 2.6.2 In the event of the death of the employee, while in employment, all the options granted to him as on the date of death shall pass along his estate and shall be fully vested in his estate as on that date and may be claimed by his legal heirs. SECURITIES AND EXCHANGE BOARD OF INDIA 14
  • 6. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION 2.6.3 In the event that the employee suffers a permanent incapacity while in employment, all the options granted to him as on the date of permanent incapacitation, shall fully vest in him on such date. 2.7 Compensation Committee of the Board 2.7.1 The Scheme would be administered under the superintendence and direction of a Compensation Committee of the Board of Directors. The Compensation Committee shall consist of a majority of independent directors. 2.7.2 The quantum of issue of options under an Employee Stock Option Plan to employees both in the aggregate and to any single employee shall be determined by the Compensation Committee subject to the limits laid down by the company in general meeting. 2.7.3 The Compensation Committee should put in place policies and systems to guard against violations of the SEBI (Insider Trading) Regulations, 1992 by employees in the course of the exercise of stock options. 2.7.4 The Compensation Committee shall formulate the detailed terms and conditions of the option scheme including a) the conditions under which options vested in employees may lapse in case of termination of employment for misconduct. b) the procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of rights issues, bonus issues and other corporate actions c) the grant, vesting and exercise of options in case of employees who are on long leave or sabbatical d) the procedures for cashless exercise of options 2.7.5 The Compensation Committee may provide that in the event of an employee resigning from the services of the company or his employment being terminated for whatever reasons, the employee should exercise the vested options within a specified period after such resignation or termination. 3 Disclosure, accounting policies and audit 3.1 Directors’ Report 3.1.1 Board of Directors shall disclose either in the Directors Report or in the annexure to the Director’s Report, the following details of the Stock option plan: SECURITIES AND EXCHANGE BOARD OF INDIA 15
  • 7. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION a) The total number of shares covered by the Employee Stock Option scheme as approved by the shareholders b) The Pricing formula c) Options granted d) Options vested e) Options exercised f) Options forfeited g) Extinguishment or modification of options h) Money realised by exercise of options i) Total number of options in force j) Employee wise details of options granted to • Senior managerial personnel • any other employee who receives a grant in any one year of options amounting to 5% or more of options granted during that year. k) diluted Earnings Per Share (EPS) calculated in accordance with International Accounting Standard (IAS) 33 3.2 Accounting Policies 3.2.1 In respect of options granted during any accounting period, the accounting value of the options shall be treated as another form of employee compensation in the financial statements of the company. The accounting value of options shall be equal to the maximum of: a) the aggregate over all employee stock options granted during any accounting period of the excess of the fair value of the option over the specified percentage of the market value of the share on the date of grant of the option; or b) excess of the aggregate of the option discounts on all employee stock options granted during any accounting period over 20% of the total employee compensation as reported in the profit and loss account of that period. c) zero. SECURITIES AND EXCHANGE BOARD OF INDIA 16
  • 8. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION For this purpose: 1. Fair value means the option discount, or, if the company so chooses, the value of the option using the Black Scholes formula or other similar valuation method. 2. Option discount means the excess of the market price of the share at the time of grant of the option over the exercise price of the option (including up-front payment if any) 3. Specified percentage means 25% in case of options granted within 12 months of the effective date, 20% in case of options granted during the 13 to 24 months after the effective date, and 15% in case of options granted after 24 months of the effective date. Effective date is the date on which these guidelines come into effect. 3.2.2 Where the accounting value is accounted for as employee compensation in accordance with 3.2.1, the amount shall be amortised on a straight-line basis over the vesting period. 3.2.3 When an unvested employee stock option lapses by virtue of the employee not conforming to the vesting conditions after the accounting value of the option has already been accounted for as employee compensation, this accounting treatment shall be reversed by a credit to employee compensation expense equal to the amortized portion of the accounting value of the lapsed options and a credit to deferred employee compensation expense equal to the unamortized portion. 3.2.4 When a vested employee stock option lapses on expiry of the exercise period, after the accounting value of the option has already been accounted for as employee compensation, this accounting treatment shall be reversed by a credit to employee compensation expense. 3.2.5 The accounting treatment prescribed above can be illustrated by the following numerical example. Suppose a company grants 500 options on 1/4/1999 at Rs 40 when the market price is Rs 160, the vesting period is two and a half years, the maximum exercise period is one year and the total employee compensation for the year 1999- 2000 is Rs 900,000. Also supposed that 150 unvested options lapse on 1/5/2001, 300 options are exercised on 30/6/2002 and 50 vested options lapse at the end of the exercise period. The accounting value of the option being the maximum of: a) 500 x [(160-40) - 25% x 160] = 500 x [120 - 40] = 500 x 80 = 40,000 b) 500 x (160-40) - 10% x 900,000 = 60,000 - 90,000 = -30,000 c) zero would be equal to Rs 40,000. SECURITIES AND EXCHANGE BOARD OF INDIA 17
  • 9. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION The accounting entries would be as follows: 1/4/1999 Deferred Employee Compensation Expense 40,000 Employee Stock Options Outstanding 40,000 (Grant of 500 options at an accounting value of Rs 80 each) 31/3/2000 Employee Compensation Expense 16,000 Deferred Employee Compensation Expense 16,000 (Amortisation of the deferred compensation over two and a half years on straight-line basis) 31/3/2001 Employee Compensation Expense 16,000 Deferred Employee Compensation Expense 16,000 (Amortisation of the deferred compensation over two and a half years on straight-line basis) 1/5/2001 Employee Stock Options Outstanding 12,000 Employee Compensation Expense 9,600 Deferred Employee Compensation Expense 2,400 (Reversal of compensation accounting on lapse of 150 unvested options) 31/3/2002 Employee Compensation Expense 5,600 Deferred Employee Compensation Expense 5,600 (Amortisation of the deferred compensation over two and a half years on straight-line basis) 30/6/2002 Cash 12,000 Employee Stock Options Outstanding 24,000 Paid Up Equity Capital 3,000 Share Premium Account 33,000 (Exercise of 300 options at an exercise price of Rs 40 each and an accounting value of Rs 80 each) 1/10/2002 Employee Stock Options Outstanding 4,000 Employee Compensation Expense 4,000 (Reversal of compensation accounting on lapse of 50 vested options at end of exercise period) The T-Accounts for Employee Stock Options Outstanding and Deferred Employee Compensation Expense would be as follows: SECURITIES AND EXCHANGE BOARD OF INDIA 18
  • 10. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION Employee Stock Options Outstanding Account 1/5/2001 Employee 12,000 1/4/1999 Deferred 40,000 Compensation/ Compensation Deferred Compensation 30/6/2002 Paid Up Capital/ 24,000 Share Premium 1/10/2002 Employee 4,000 Compensation 40,000 40,000 Deferred Employee Compensation Expense Account 1/4/1999 ESOP Outstanding 40,000 31/3/2000 Employee 16,000 Compensation 31/3/2001 Employee 16,000 Compensation 1/5/2001 ESOP Outstanding 2,400 31/3/2002 Employee 5,600 Compensation 40,000 40,000 Employee Stock Options Outstanding will appear in the Balance Sheet as part of Net Worth or Shareholders’ Equity. Deferred Employee Compensation will appear in the Balance Sheet as a negative item as part of Net Worth or Shareholders’ Equity. 3.3 Certificate from Auditors 3.3.1 In the case of every company that has passed a resolution for an Employee Stock Option scheme under 2.2.1 of these guidelines, the Board of Directors shall at each annual general meeting place before the members a certificate from the auditors of the company that the scheme has been implemented in accordance with these guidelines and in accordance with the resolution of the company in general meeting. SECURITIES AND EXCHANGE BOARD OF INDIA 19
  • 11. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION 4 Employee Stock Purchase Plan (ESPP) 4.1 Scope of Employee Stock Purchase Plans 4.1.1 An employee who is a promoter or a part of the promoter group shall not be eligible to participate in the Employee Stock Purchase Plan of the company. 4.1.2 A director who either by himself or through his family or through any investment company, directly or indirectly holds more than 10% of the outstanding equity shares of the company shall not be eligible to participate in the Employee Stock Purchase Plan. 4.2 Shareholder Approval 4.2.1 The ESPP shall be approved by the shareholders by a special resolution which shall specify the price of the shares and also the number of shares to be offered to each employee. The number of shares offered may be different for different categories of employees. The special resolution shall state that the company shall conform to the accounting policies mandated in 4.4.2. 4.3 Pricing and Lock-in 4.3.1 Companies shall have full freedom to price the shares under an ESPP at any level provided they conform to the provisions of 4.4.2. 4.3.2 Shares issued under an ESPP shall be locked in for a period of one year. However if the ESPP is part of a public issue and the shares are issued to employees at the same price as in the public issue, the shares shall not be subject to any lock-in 4.4 Disclosure and Accounting Policies 4.4.1 The details of the shares issued under the ESPP and the terms and conditions thereof shall be disclosed in the Directors’ report or in an annexure thereto. 4.4.2 In respect of shares issued under an ESPP during any accounting period, the accounting value of the shares so issued shall be treated as another form of employee compensation in the financial statements of the company. The accounting value of shares issued under ESPP shall be equal to the maximum of: a) the aggregate over all shares issued under ESPP during any accounting period of the excess of the price discount over the specified percentage of the market value of the shares on the date of issue; b) the excess of the aggregate of the price discounts on all shares issued under ESPP during any accounting period over 20% of the total employee compensation as reported in the profit and loss account of that period; SECURITIES AND EXCHANGE BOARD OF INDIA 20
  • 12. REPORT OF THE COMMITTEE ON EMPLOYEE STOCK OPTION c) zero. For this purpose: 1. Price discount means the excess of the market price of the shares at the date of issue over the price at which they are issued under the ESPP. 2. Specified percentage means 25% in case of shares issued within 12 months of the effective date, 20% in case of shares issued during the 13 to 24 months after the effective date, and 15% in case of shares issued after 24 months of the effective date. Effective date is the date on which these guidelines come into effect. 4.4.3 The accounting treatment prescribed above can be illustrated by the following numerical example. Suppose a company issues 500 shares on 1/4/1999 under an ESPP at Rs 40 when the market price is Rs 160 and the total employee compensation for the year 1999-2000 is Rs 900,000. The accounting value of the shares being the maximum of: a) 500 x [(160-40) - 25% x 160] = 500 x [120 - 40] = 500 x 80 = 40,000 b) 500 x (160-40) - 10% x 900,000 = 60,000 - 90,000 = -30,000 c) zero would be equal to Rs 40,000. The accounting entry would be as follows 1/4/1999 Cash 20,000 Employee Compensation Expense 40,000 Paid Up Equity Capital 5,000 Share Premium Account 55,000 (Issue of 500 shares under ESPP at a price of Rs 20 each when market price is Rs 100) 4.5 Preferential Allotment Nothing in these guidelines shall apply to shares issued to employees in full compliance with the SEBI Guidelines on Preferential Allotment. SECURITIES AND EXCHANGE BOARD OF INDIA 21