Draft Documents For ESOP

Checklist of Employees Stock Option Schemes

 

1. Employee means

(a) a permanent employee of the company working in India or out of India or

(b) a director of the company, whether WTD or not or

(c) an employee as defined in sub-clause (a) or (b) of a subsidiary, in India or out of

India or of a holding company of the company.

but does not include-

(i) an employee who is a promoter or a person belonging to the promoter group; or

(ii) a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the company.

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

(a) the fair value of the option granted under ESOS and

(b) discount at which shares are issued under an ESPS

3. Employee stock option means the option given to the whole-time Directors, Officers or employees of a company which gives them the benefit or right to purchase or subscribe at a future date, the securities offered by the company at a pre-determined price.

4. ESOS means a scheme under which a company grants employee stock option.

5. ESPS shares means shares arising out of grant of shares under ESPS.

6. Exercise means making of an application by the employee to the company for issue of shares against option vested in him in pursuance of the ESOS.

7. Grant means issue of option to employees under ESOS.

8. Independent Director means a director of the company, not being a whole time director and who is neither a promoter nor belongs to the promoter group.

9. Intrinsic value means excess of the market price of the share under ESOP over the exercise price of the option (including up-front payment, if any).

10. Market Price means latest available closing price (at the stock exchange where there is highest trading volume) prior to date of Board meeting in which options are granted/shares are issued.

11.Promoter means:

(a) the person or persons who are in overall control of the company.

(b) the person or persons who are instrumental in the formation of the company or programme pursuant to which the shares were offered to the public.

(c) The person or persons named in the offer documents as promoter(s). Provided that a director or officer of the company, if they are acting as such only in their professional capacity will not be deemed to be a promoter.

12. Promoter group means

(a) an immediate relative of the promoter (i.e spouse, parent, brother, sister or child of the person or of the spouse.

(b) persons whose shareholding is aggregated for the purpose of disclosing in the offer document “Shareholding of the promoter group”.

13. Share means equity shares and securities convertible into equity shares and shall include ADR, GDR or other depository receipts representing underlying equity shares or securities convertible into equity shares.

14. Vesting means the process by which the employee is given the right to apply for shares of the company against the option granted to him in pursuance of ESOS.

15. Vesting period means the period during which the vesting of the option granted to the employee in pursuance of ESOS takes place.

Applicability

Section 62(1)(b) of the Companies Act, 2013 provides that where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares may be offered to employees under a scheme of employees’ stock option, subject to special resolution (ordinary resolution in case of private company) passed by company and subject to such conditions as may be prescribed.

Eligibility:

1. Employee shall be eligible.

2. Promoter or promoter group not eligible.

3. Director who either himself or through relatives or any body corporate, directly or indirectly holds more than 10% of the outstanding equity shares of the company not eligible.

Shareholders approval:

1. Special Resolution of the shareholders required.

2. Explanatory Statement shall contain the following:

(a) total no. of options to be granted

(b) identification of classes of employees entitled to participate in ESOS

(c) requirement of vesting and period of vesting

(d) maximum period within which the option shall be vested

(e) exercise price or pricing formula

(f) exercise period and process of exercise

(g) the appraisal process for determining the eligibility of employees to the ESOS

(h) maximum number of options to be issued per employee and in aggregate

(i) a statement to the effect that the company shall conform to the accounting policies specified in clause 13.1

(j) the method which the company shall use to value its options whether fair value or intrinsic value

(k) In case company calculates employee compensation cost using intrinsic value of the stock options, a statement that the diff. between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed in the Directors Report and also the diff. on profits and on EPS shall also be disclosed in the Directors Report.

3. Approval of shareholders by way of separate resolution in case of:

(a) grant of option to employees of subsidiary or holding company

(b) grant of option to identified 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 of option.

PROCEDURE FOR ISSUE OF ESOP

1. Draft the ESOP scheme.

2. Convene the Board Meeting and pass the scheme.

3. Call the general meeting to approve the scheme by Shareholders. The following disclosure will be made in the explanatory statement annexed to the notice for passing of the resolution-

(a) the total number of stock options to be granted;

(b) identification of classes of employees entitled to participate in the Employees Stock Option Scheme;

(c) the appraisal process for determining the eligibility of employees to the Employees Stock Option Scheme;

(d) the requirements of vesting and period of vesting;

(e) the maximum period within which the options shall be vested;

(f) the exercise price or the formula for arriving at the same;

(g) the exercise period and process of exercise;

(h) the Lock-in period, if any ;

(i) the maximum number of options to be granted per employee and in aggregate;

(j) the method which the company shall use to value its options;

(k) the conditions under which option vested in employees may lapse e.g. in case of termination of employment for misconduct;

(l) the specified time period within which the employee shall exercise the vested options in the event of a proposed termination of employment or resignation of employee; and

(m) a statement to the effect that the company shall comply with the applicable accounting standards.

4. Approve the ESOP Scheme by passing a special resolution (ordinary resolution in case of Private Company). The approval of shareholders by way of separate resolution shall be obtained by the company in case of -

(a) grant of option to employees of subsidiary or holding company; or

(b) grant of option to identified employees, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant of option.

5. File form MGT-14 to submit the special resolution within 30 days of passing the resolution.

6. After approval of ESOP scheme by the shareholders, grant options to the eligible employees.

7. Vesting of Options. There shall be a minimum period of one year between the grant of options and vesting of option.

8. Exercise of Options by the employees;

9. Allotment of Shares. As and when options are exercised file form PAS-3 (Return of Allotment) with ROC.

10. The company shall maintain a Register of Employee Stock Options in form SH-6 and shall forthwith enter therein the particulars of option granted.

Where a Company implements any ESOP Scheme in the Organization, then it is required to make the following disclosure under the Companies Act 2013, in respect of the Options allotted and exercised under the said Scheme. 

Disclosure in the Balance Sheet:

 

As per Part I to the Schedule III of the Companies Act, 2013, following disclosures are to be made in the Balance Sheet of the Company: 

Details of the shares issued under Employees stock option scheme including the details of the quantum of the shares, pricing of the shares, number of option granted, number of option exercised etc.

 

Disclosure in the profit and loss account:

 

As per Part II to the Schedule III of the Companies Act, 2013 following disclosures are required to be made in the Profit & Loss Account of the Company.

 

Under Clause 4(vii) of the Part II to the Schedule III the details of the perquisites and benefits given in cash or in kind to the Directors including Managing Directors, Managing Agents, Secretaries, Treasures or Managers by the Company, Subsidiaries of the Company or by any other person.

 

Disclosure in the Director's Report:

 

In terms of Rule 12 of Chapter IV of Companies Act, 2013, The Board of directors, shall, inter alia, disclose in the Directors’ Report for the year, the following details of the Employees Stock Option Scheme:

1. options granted;
2. options vested;
3. options exercised;
4. the total number of shares arising as a result of exercise of option;
5. options lapsed;
6. the exercise price;
7. variation of terms of options;
8. money realized by exercise of options;
9. total number of options in force;
10. employee wise details of options granted to;
1. key managerial personnel;
2. any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year.
3. identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant;

Disclosures in Directors’ Report under schedule V of the Companies Act, 2013
 

As per the Schedule V to the Companies Act 2013, If in any financial year, company is not having any profit or its profits are inadequate, and the company is paying remuneration to its managerial personnel by way of salary, dearness allowance, perquisite and other allowance under (ii) (b) of Part II, then the company is required to make the following disclosures under the head of corporate governance of the director's report of the company:

(i) All elements of remuneration package such as salary, benefits, bonuses , stock options, pension, etc., of all the directors;

(ii) Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable.

 

Disclosures to be made in the Explanatory Statement attached to the Notice for calling the General Meeting for the approval of the Scheme:

The company shall make the following disclosures in the explanatory statement annexed to the notice for passing of the resolution - 


(a) the total number of stock options to be granted; 

(b) identification of classes of employees entitled to participate in the Employees Stock Option Scheme; 

(c) the appraisal process for determining the eligibility of employees to the Employees Stock Option Scheme; 

(d) the requirements of vesting and period of vesting; 

(e) the maximum period within which the options shall be vested; 

(f) the exercise price or the formula for arriving at the same; 

(g) the exercise period and process of exercise; 

(h) the Lock-in period, if any ; 

(i) the maximum number of options to be granted per employee and in aggregate; 

(j) the method which the company shall use to value its options; 

(k) the conditions under which option vested in employees may lapse e.g. in case of termination of employment for misconduct; 

(l) the specified time period within which the employee shall exercise the vested options in the event of a proposed termination of employment or resignation of employee; and 

(m) a statement to the effect that the company shall comply with the applicable accounting standards.

Draft Format

BOARD RESOLUTION

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CERTIFIED TRUE COPY OF THE RESOLUTION PASSED BY THE DIRECTORS OF ________________ PRIVATE LIMITED ON (DATE) AT ITS REGISTERED ADDRESS AT _______, _________, City : ___________, Pin Code : ______ State : _______________. AT 3.00 PM

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APPROVAL OF ESOP SCHEME 

 

The Chairman informed that the Company was planning to come out with an ESOP Scheme to motivate employees, who are consistently performing well, and to give them opportunity to participate and gain from the Company's performance, thereby, acting as a retention tool as well as to align the efforts of such talent towards long term value creation in the organization and to attract new talent. He added that in this direction, an ESOP scheme has been drafted in consultation with [Name of Consultant, if any]. The draft ESOP policy was placed before the Board.

Thereafter, the Chairman shared with the Members the salient features of the proposed ESOP Scheme:

Particulars	ESOP Scheme
Total Number of Options
Eligible Employees
Vesting Period
Vesting Criteria
Exercise Price
Exercise Period
Maximum No. of Options to be granted per employee

The Board considered the same and passed the following resolution in this regard:

“RESOLVED THAT pursuant to the provisions of Section 62 and other applicable provisions, if any, of the Companies Act, 2013 read with rules made thereunder and pursuant to the provisions contained in the Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines ("the Guidelines") (including any statutory amendment, modification or re-enactment to the Act or the Guidelines, for the time being in force), the Articles of Association of the Company, approval of Shareholders at their general meeting and subject to such other approvals, permissions, sanctions, conditions and modifications as may be prescribed or imposed while granting such approvals, permissions and sanctions, the consent of the Board be and is hereby accorded to the proposed "Employee Stock Option Plan" and to create, offer, issue and allot in one or more tranches under the said "Employee Stock Option Plan" at any time to or for the benefit of employees and Directors (excluding Independent Director) of the Company for such number of stock options /equity shares and / or equity linked instruments including any other instruments or securities which could give rise to the issue of equity shares (hereinafter collectively referred to as "Securities") of the Company, not exceeding [Number of ESOP Options] in aggregate, at such price and on such terms and conditions as may be fixed or determined by the Board of Directors in accordance with the Guidelines or other applicable provisions of any law as may be prevailing at that time.

“RESOLVED FURTHER THAT the new Equity Shares to be issued and allotted by the Company in the manner aforesaid shall rank pari passu in all respects with the then existing Equity Shares of the Company.

“RESOLVED FURTHER THAT [Name of the person(s) authorized] of the Company be and are hereby authorized jointly and/or severally to do all such acts, deeds, matters and things as may be necessary or expedient including filing of necessary documents, intimations including e-forms with regulatory authorities and to settle any questions, difficulties or doubts that may arise in this regard at any stage in connection to ESOP scheme.

“RESOLVED FINALY THAT a yearly status on the ESOP granted and exercised by employees be presented for the information of the Board”.

Date:

Place:

For, ________________ Private Limited

______________

(Director)

DIN:

OR

NOTICE OF POSTAL BALLOT / E-VOTING

Dear Member(s),

Notice is hereby given that pursuant to the provisions of Section 110 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and other Applicable Laws, the Company hereby seeks your approval by passing of special resolution(s) through Postal Ballot / Electronic Voting (e-voting) in respect of following special business(es).

Definitions, explanatory statement setting out the material facts relating to each item referred in the resolution(s) and the instructions for e-voting are annexed to the Postal Ballot Notice.

1. Implementation of ESOP Scheme 2008 through ESOP Trust

To consider and, if thought fit, to pass, the following resolution as Special Resolution:

“RESOLVED THAT pursuant to the Applicable Laws, approval of the members of the Company be and is hereby accorded to the Board to implement the ESOP Scheme 2008 through the ESOP Trust.

RESOLVED FURTHER THAT the following Clause 1A be inserted in the ESOP Scheme 2008 after the existing Clause 1:

Clause1A:Implementation of ESOP Scheme 2008 through ESOP Trust

The Company may implement the ESOP Scheme 2008 through trust as may be setup or designated for this purpose (“ESOP Trust”).

RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the ESOP Trust be and is hereby authorised to acquire the shares of the Company from the secondary market and to hold, transfer and deal in the shares of the Company and to do all such acts, deeds and things as may be incidental or ancillary in this regard.

RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board or the officers authorised by the Board in this regard be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary or expedient and to settle any questions, difficulty or doubts that may arise in this regard without requiring the Board to secure any further consent or approval of the members of the Company.”

2. Approval of Employee Stock Option Scheme 2014 (ESOP Scheme 2014)

To consider and, if thought fit, to pass, the following resolution as Special Resolution:

“RESOLVED THAT pursuant to the Applicable Laws, Employee Stock Option Scheme 2014 (ESOP Scheme 2014),for the benefit of present and future permanent employees of the Company and its director(s), whether whole time director or not but excluding independent directors, be and is hereby approved as per the salient features mentioned in the explanatory statement annexed herewith and same be implemented through ESOP Trust, provided that the total number of options that can be granted under ESOP Scheme 2014 shall not exceed _________ (_____Rupees Only) options, convertible into equivalent number of equity shares of the Company.

RESOLVED FURTHER THAT in case of any corporate action(s) such as rights issue, bonus issue, buy-back of shares, split or consolidation of shares etc. of the Company, the number of above mentioned options shall be appropriately adjusted.

RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the ESOP Trust is hereby authorised to acquire the shares of the Company from the secondary market and to hold, transfer and deal in the equity shares of the Company and to do all such acts, deeds and things as may be incidental or ancillary in this regard.

RESOLVED FURTHER THAT the Board be and is hereby authorized to:-

1. administer, implement and superintend the ESOP Scheme 2014;

2. determine the terms and conditions of grant, issue, re-issue, cancel and withdrawal of stock options from time to time;

3. formulate, approve, evolve, decide upon and bring into effect, suspend, withdraw or revive any sub-scheme or plan for the purpose of grant of stock options to the employees and to make any modifications, changes, variations, alterations or revisions in such sub-scheme or plan from time to time;

4. do all such acts, deeds, things and matters as may be considered necessary or expedient including delegation of all or any of the powers herein conferred by this resolution to any committee of directors, director, officer or authorised representative of the Company; and

5. settle any questions, difficulties or doubts that may arise in this regard without requiring the Board to secure any further consent or approval of the members of the Company.”

3. Grant of stock options to the employees of holding and/or subsidiary companies under ESOP Scheme 2014

To consider and, if thought fit, to pass, the following resolution as Special Resolution:

“RESOLVED THAT pursuant to the Applicable Laws, approval of the members of the Company be and is hereby accorded to grant the stock options under ESOP Scheme 2014 to the present and future, permanent employees of the holding and subsidiary company(ies) and their director(s) whether whole time director or not but excluding independent directors, if any, from time to time, on such terms and conditions as may be decided by the Board.

RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board or the officers authorised by the Board in this regard be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary or expedient and to settle any questions, difficulty or doubts that may arise in this regard without requiring the Board to secure any further consent or approval of the members of the Company.”

Place : __

Date: ___^th _____, 20__

By Order of the Board of Directors,

_______________

Director

Registered Office:

AT _______, _________, 

City : ___________, 

Pin Code : ______ 

State : _______________

In this postal ballot notice, unless the context otherwise requires, the following words, expressions and derivations therefrom shall have the meanings assigned to them as under:-

“Applicable Laws” means the Companies Act, ESOP Regulations, FEMA, Securities and Exchange Board of India Act, 1992, Memorandum and Articles of Association of the Company and all other relevant laws, rules, regulations, circulars, notifications and guidelines (including any statutory modifications or re-enactment thereof) as may be applicable, from time to time.

“Board” means the board of directors of the Company and includes any committee thereof.

“Company” means _________ Limited, incorporated under the Companies Act, 1956/2013, having its registered office at___________.

“Companies Act” means Companies Act, 2013 as amended, for the time being in force and includes all rules, circulars, notifications and clarifications issued thereunder.

“Compensation Committee” means the HR, Nomination and Remuneration Committee of the Board or any other committee as may be constituted by the Board for implementation of the employees’ benefit schemes from time to time.

“ESOP Regulations” means the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, as amended, for the time being in force and includes all regulations, notifications and clarifications issued thereunder.

“ESOP Scheme 2008” means the Employee Stock Option Plan, 2008 instituted by the Company pursuant to a resolution of the Board dated July 22, 2008 and resolution of the shareholders passed in extraordinary general meeting dated August 28, 2008 as amended from time to time.

“ESOP Scheme 2014” means the Employee Stock Option Scheme, 2014 to be formulated by the Company as per item no. 2 of this postal ballot notice read with explanatory statement

“ESOP Trust” means an irrevocable trust set up or to be set up for the administration of the ESOP Scheme 2008, ESOP Scheme 2014 or any other employees’ benefit scheme as may be formulated by the Company, from time to time, under the provisions of the ESOP Regulations or any other law for the time being in force.

“FEMA” means Foreign Exchange Management Act, 1999 read with rules and regulations thereunder including Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.

“IPO” means Initial Public Offer pursuant to which equity shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited with effect from December 28, 2012.

“RBI” means Reserve Bank of India.

“SEBI” means the Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992.

“Secondary Acquisition” means acquisition of existing shares of the Company by the ESOP Trust on the platform of a recognised stock exchange for cash consideration.

Explanatory Statement pursuant to Section 102 of 

the Companies Act, 2013

Item No. 1:

The Company instituted the ESOP Scheme 2008 pursuant to a resolution of Board dated _____ __, 20__ and shareholders’ resolution dated _____ __, 20_ having a total pool size of __________ stock options. Under the said scheme, prior to IPO, the Company had granted _________ stock options under three plans viz. Plan-I, Plan-II and Plan-III.

Status of ESOP Scheme 2008 as on September 30, 2014 is as under:

Sr. No.	Description	No. of Options
(i)	Options Exercised
(ii)	Options Unexercised (both vested and unvested)
(iii)	Options ungranted and lapsed
	TOTAL

Presently, the said scheme is implemented by way of allotment of equity shares to the option holders, as and when they exercise their stock options. This results in proportionate dilution of equity stake of existing shareholders.

SEBI, vide recently notified ESOP Regulations, has permitted companies to implement employees’ welfare schemes through ESOP Trust, subject to compliance of conditions stated in the ESOP Regulations and with the approval of the shareholders by passing of special resolution.

Under this route, the ESOP Trust is allowed to acquire the equity shares of the Company from the secondary market and utilize the same upon exercise of stock options by option holders. The special resolution as set out under item No. 1 proposes to authorise the Company to implement the ESOP Scheme 2008 by way of Secondary Acquisition through ESOP Trust.

The Company proposes to provide financial assistance to the ESOP Trust for this purpose subject to the overall limits specified under the Applicable Laws, if any.

There is no change in the terms and conditions of stock options granted under the existing ESOP Scheme 2008.

A copy of the revised ESOP Scheme 2008 incorporating the proposed amendments, will be available for inspection on all working days (Monday to Friday) between 11.00 a.m. and 1.00 p.m. at the registered office of the Company.

None of the Directors or Key Managerial Personnel of the Company including their relatives are, in any way, concerned or interested, financially or otherwise, in the proposed resolution except to the extent of grant of stock options to them, if any, under the ESOP Scheme 2008.

The Board recommends the passing of resolution as set out under Item No. 1 for approval of the members as special resolution through Postal Ballot / e-voting.

Item No. 2 and 3:

Stock options are an effective instrument to align interests of employees with those of the Company and provide an opportunity to employees to participate in the growth of the Company, besides creating long term wealth in their hands. This also helps the Company to attract, retain and motivate the best available talent in a competitive environment.

The ESOP Scheme 2008 is a pre IPO scheme and cannot be utilized towards grant of new stock options post listing of the shares of the Company on Stock Exchanges. Accordingly, at present the Company does not have any stock option scheme under which it can grant new stock options to its employees.

The Board, therefore, proposes to introduce, formulate and create Employee Stock Option Scheme 2014 (ESOP Scheme 2014). Grant of stock options under ESOP Scheme 2014 shall be as per the terms and conditions as may be decided by Compensation Committee from time to time in accordance with the Applicable Laws.

The salient features of the ESOP Scheme 2014 are as under:-

1. Total number of Options to be granted

1. A total of ______ (________Rupees Only) options would be available for grant to the eligible employees under the scheme.

2. Number of options shall be adjusted due to any corporate action(s) such as rights issue, bonus issue, buy-back of shares, split or consolidation of shares etc. of the Company.

3. Each option when exercised would give the option holder a right to get one fully paid equity share of the Company.

4. The options, which will lapse, expire or be forfeited, will be available for further grant to the eligible employees.

2. Implementation of ESOP Scheme 2014 through ESOP Trust

The scheme shall be implemented through the ESOP Trust. The ESOP Trust shall be authorized to acquire equity shares of the Company from the secondary market. The Company proposes to provide financial assistance to the ESOP Trust for this purpose subject to the overall limits specified under the Applicable Laws, if any.

3. Classes of employees entitled to participate in the ESOP Scheme 2014

Present and future, permanent employees and directors (whether whole time director or not but excluding independent directors) of the Company, its holding and subsidiary company(ies) as may be determined by Compensation Committee from time to time, shall be eligible to participate in the ESOP Scheme 2014.

The promoter, the person belonging to the promoter group or director, who either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the Company, shall not be eligible to participate in the ESOP Scheme 2014.

4. Requirements of Vesting and period of Vesting

The options granted shall vest so long as the employee continues to be in the employment of the Company. The vesting period shall be decided by the Compensation Committee from time to time but shall not be less than 1 year and not more than 5 years from the date of grant of options. Vesting may happen in one or more tranches.

5. Exercise Price or pricing formula

The exercise price and/or the pricing formula shall be decided by the Compensation Committee from time to time. Employee shall bear all tax liability in relation to grant of options.

6. Exercise Period and process of exercise

The Compensation Committee shall decide the exercise period from time to time which can be extended upto 7 years from the vesting date(s). The employee can exercise stock options at any time after the vesting date either in full or in tranches by making full payment of exercise price and applicable taxes and by execution of such documents as may be prescribed by the Compensation Committee, from time to time.

7. Appraisal process for determining the eligibility of the employees

The process for determining the eligibility of the employees will be specified by the Compensation Committee and will be based on designation, period of service, band, performance linked parameters such as work performance and such other criteria as may be determined by the Compensation Committee at its sole discretion, from time to time.

In case of performance linked stock options, the number of vested stock options may vary from the original number of stock options granted.

       8.  Maximum number of options to be granted per employee 

Maximum number of options to be granted to an eligible employee will be determined by the Compensation Committee on case to case basis.

The Company shall comply with the disclosures, the accounting policies and other requirements as may be prescribed under the ESOP Regulations and other Applicable Laws from time to time. The Compensation Committee shall have all the powers to take necessary decisions for effective implementation of the ESOP Scheme 2014. In terms of the provisions of the ESOP Regulations, ESOP Scheme 2014 is required to be approved by the members by passing of special resolution.

ESOP Regulations also require separate approval of members by way of special resolution to grant stock options to the employees of holding and/or subsidiary companies. Accordingly, a separate resolution under item no.3 is proposed to extend the benefits of ESOP Scheme 2014 to the employees of holding and subsidiary company(ies) as may be decided by the Compensation Committee from time to time under Applicable Laws.

A copy of the draft ESOP Scheme 2014 will be available for inspection on all working days (Monday to Friday) between 11.00 a.m. and 1.00 p.m. at the registered office of the Company.

None of the Directors or Key Managerial Personnel of the Company including their relatives are, in any way, concerned or interested, financially or otherwise, in the proposed resolution(s) except to the extent of the stock options that may be granted to them under ESOP Scheme 2014.

The Board recommends passing of the resolution(s) as set out under Item No. 2 and 3 for approval of the members as special resolution(s) through Postal Ballot / e-voting.

Disclosures as required under Rule 16 of the 

Companies (Share Capital and Debentures) 

Rules, 2014

1. The class of employees for whose benefit the scheme is being implemented and money is being provided for purchase of or subscription to shares:

Present and future, permanent employees and directors (whether whole time director or not but excluding independent directors) of the Company, its holding and subsidiary company(ies) as may be determined by Compensation Committee from time to time.

2. The particulars of the trustee or employees in whose favour such shares are to be registered:

The shares can be registered in the name of all or any of the trustees to hold equity shares of the Company for and on behalf of ESOP Trust.

3. The particulars of trust and name, address, occupation and nationality of trustees and their relationship with the promoters, directors or key managerial personnel, if any:

Name and Address of the Trust: __________

Name of First Trustees	Address	Occupation	Nationality
		Service	Indian
		Service	Indian
		Service	Indian

None of the trustees are related to the Promoters/Directors/Key Managerial Personnel of the Company. Subject to the compliance of the provisions of the Applicable Laws, the Board may change the aforesaid trustees at any time.

4. Any interest of Key Managerial Personnel, Directors or Promoters in such scheme or trust and effect thereof:

The Key Managerial Personnel and Directors are interested in the ESOP Scheme(s) only to the extent of stock options granted/to be granted to them, if any.

4. The detailed particulars of benefits which will accrue to the employees from the implementation of the scheme:

Upon exercise of stock options, the eligible employees, will be entitled to equivalent number of shares of the Company, as per the terms of grant.

4. The details about who would exercise and how the voting rights in respect of the shares to be purchased or subscribed under the scheme would be exercised:

In line with the requirements of the ESOP Regulations, neither the ESOP Trust nor any of its trustees shall exercise voting rights in respect of the shares of the Company held by the ESOP Trust.

In terms of the provisions of the Applicable Laws, approval of the members by passing of special resolution is sought for provision of money and implementation of the ESOP Scheme 2008 and ESOP Scheme 2014 by way of Secondary Acquisition as set out under item no. 4.

None of the Directors or Key Managerial Personnel of the Company including their relatives are, in any way, concerned or interested, financially or otherwise, in the proposed resolution.

The Board recommends the passing of resolution as set out under Item No. 4 for approval of the members as special resolution through Postal Ballot / e-voting.

Place : __

Date: ___^th _____, 20__

By Order of the Board of Directors,

_______________

Director

Registered Office:

AT _______, _________, 

City : ___________, 

Pin Code : ______ 

State : _______________

GRANT LETTER

Date: ___^th ________, 20__

To,

Dear Sir/Madam,

The ESOP Compensation Committee of ……………… has pleasure in inviting you to participate in the Employee Stock Option Scheme under the Companies Act, 2013 (hereinafter referred as Scheme) of the Company.

By virtue of scheme, you are being offered the options convertible into equity shares of ………………….

The details of number of options granted, vesting date, exercise date, exercise price and manner of exercising the options and other terms and conditions are given in Form I.

The offer shall lapse if not accepted on or before the closing date mentioned in Form I. If the offer is acceptable to you, kindly sign acceptance form (enclosed as Form II) in token of your acceptance.

You are requested to study the same carefully and familiarize yourself with the scheme enclosed.

Thanking you,

Yours faithfully,

For …………………………..

………………………………….

Encl: As above

FORM I

GRANT LETTER

NAME IN FULL: ………………….
I. GRANT DETAILS
Description	Grant Date	No of options
Total Options Granted
II. VESTING DETAILS
Description	Vesting Date	No. of options
Vesting
III. EXERCISE DETAILS
Number of options - 1500	Last Date for Exercise	Exercise Price
Exercise of ….. Option		Rs. __/- per options
Exercise of ……… Option		Rs. __/- per options
Exercise of ……Option		Rs. __/- per options

Terms and conditions:

• Hereinafter, the grant letter issued to the employees shall be termed as grantee or participant.
  
  
• The options granted are personal to the grantee and cannot be transferred in any manner whatsoever.
  
  
• Each Option will entitle the participant to one Share of the Company and options issued to the grantee shall always be convertible into equity shares only.
  
  
• Grantee who wishes to accept an offer made must deliver duly filled Acceptance Form (enclosed as Form II) at the registered office of the Company addressed to Ms………………. on or before closing date i.e. 15^th July, 2012. Further grantee shall mention his/her name, address precisely in the acceptance form.
  
  
• Grantee who fails to return the Acceptance Form on or before the Closing date is deemed to have rejected the offer and Acceptance Form received after the Closing date shall not be valid.
  
  
• Options granted shall vest on aforementioned vesting dates.
  
  
• The grantee shall not have right to receive any dividend or to vote or in any manner enjoy the benefits of a shareholder in respect of option granted to him, till shares are issued on exercise of option.
  
  
• Subsequent to vesting date, grantee shall exercise the Vested Options on or before aforementioned exercise dates.
  
  
• For the purpose of exercise, grantee must deliver duly filled exercise form (enclosed as Form III) in writing along with exercise Price of Rs. 10/- per options by enclosing cheque in favor ……………………………… on or before aforementioned exercise dates addressed to ……………………….. at the registered office of the Company.
  
  
• The compensation committee shall verify and accordingly communicate to the employees about valid exercise.
  
  
• Shares issued pursuant to exercise of options under the scheme would be in lock in for the period of 12 months in case of existing employees and 24 months in case of new joining.
  
  
• Each grantee under the Scheme may nominate, any Beneficiary or Beneficiaries to whom any benefit under the Scheme is to be delivered in case of his or her death before he or she receives all of such benefit by delivering nomination form (enclosed as Form IV) to the company at the registered office of the Company addressed to Ms…………………...
  
  
• For other terms and condition relating to eligibility of employees, administration of the scheme, granting of options, method of acceptance, vesting of options, exercise price, exercise of options, termination of employment, notices and correspondence, nomination, non-transferability of options, corporate action, arbitration, regulatory approvals, accounting method and method of valuation, miscellaneous provisions, modification of scheme and term of the scheme, employees are requested to study and familiarize with scheme enclosed.
  
  
• In case of any clarification please contact ……………… or e-mail at _____________

For…………………………

……………………………….

ACCEPTANCE FORM

Date:

From:

To

The Compensation Committee,

___________ Limited,

Address : _____,

City : ______

Pin Code : _____

State : _____

India

Dear Sir,

This is with reference to the Grant Letter of Offer dated ……………… issued under the Employee Stock Option Scheme 2011 of the Company.

I have read the terms and conditions stipulated in the Grant Letter and ESOP Scheme 2011 and wish to subscribe to ___________ options granted to me.

I undertake to be bound by the terms and conditions of the ESOP Scheme which I confirm that I have understood fully.

Yours faithfully

_______________

Chetan Gupta

Note: Henceforth, any correspondence required to be made by the Company or the Compensation Committee shall be given to Employee at the address mentioned in this letter.

FORM III

EXERCISE FORM

Date

From

To

Compensation Committee

Vikas GlobalOne Limited

New Delhi

Kind Attn: ……………………………

I exercise my right to convert _________ options out of ___________ options already vested in me. Please find enclosed herewith cheque in favour of

I am furnishing the required information below:

I. PERSONAL DETAILS
Name in Full
Address
Income Tax PAN No.
II. GRANT & EXERCISE DETAILS
Particulars	Date	No of options
Total Options Granted
Options Vested
Options Exercised
III. PAYMENT DETAILS
Subscription for ________ Shares @ Rs. ____/- per share	Cheque Date	Cheque No.	Name of Bank	Amount Rs.___/-
Total Amount

Yours faithfully

Name and Signature

FORM IV

NOMINATION FORM

Date:

To,

The Compensation Committee

Kind Attn:

Dear Madam/Sir,

In respect of the options to be exercised by me under the Employee Stock Option Scheme (ESOP) of the Company, I hereby appoint my nominee in accordance with Clause XV of the ESOP Scheme. The details of the nomination are as follows:

Name of Employee in Full :

NOMINEE DETAILS

Name in Full :

Relationship with the Employee :

Address :

City :

Pin Code :

State :

Country :

Age :

Guardian :

GUARDIAN DETAILS :

Name in Full :

Relationship with Nominee :

Address :

City :

Pin Code :

State :

Country

Yours faithfully,

	Signature	Place	Date
Name of Employee
Name of Nominee/ Guardian

Thanks & Regards,
CS Meetesh Shiroya