TMI BlogIssue of employee stock options.X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of clause (b) of sub-section (1) of section 62 and this rule Employee means- (a) a permanent employee of the company who has been working in India or outside India; or (b) a director of the company, whether a whole time director or not but excluding an independent director; or (c) an employee as defined in clauses (a) or (b) of a subsidiary, in India or outside India, or of a holding company of the company 1 [***] 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 [ Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 . (3) The companies granting option to its employees pursuant to Employees Stock Option Scheme will have the freedom to determine the exercise price in conformity with the applicable accounting policies, if any. (4) 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be forfeited by the company if the option is not exercised by the employees within the exercise period; or (b) the amount may be refunded to the employees if the options are not vested due to non-fulfillment of conditions relating to vesting of option as per the Employees Stock Option Scheme. (8)(a) The option granted to employees shall not be transferable to any other person. (b) The option granted to the employees shall not be pledged, hypothecated, mortgaged or otherwise encumbered or alienated in any other manner. (c) Subject to clause (d), no person other than the employees to whom the option is granted shall be entitled to exercise the option. (d) In the event of the death of employee while in employment, all the option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (excluding outstanding warrants and conversions) of the company at the time of grant; (10) (a) The company shall maintain a Register of Employee Stock Options in Form No. SH.6 and shall forthwith enter therein the particulars of option granted under clause (b) of sub-section (1) of section 62. (b) The Register of Employee Stock Options shall be maintained at the registered office of the company or such other place as the Board may decide. (c) The entries in the register shall be authenticated by the company secretary of the company or by any other person authorized by the Board for the purpose. (11) Where the equity shares of the company are listed on a recognized stock exchange, the Employees Stock Option Scheme shall be issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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