The ESOP Structure

Shareholder Approval: The Structuring Of ESOP. Company’s shareholders must approve the concern of an Employee Stock Ownership Scheme. ESOP Structure. Employees who may be granted ESOPs:

The following “Employees” may be granted ESOPs:

A company permanent employee who has worked in India or outside India; or A company director, whether a full-time director or not, but excluding a board member; or

Also, an employee as set out in clause (a) or (b) of a conglomerate, in India or outside India, or of a private equity firm of the firm or an associate company, does not include. ESOP Structure.

 A worker who is a promoter or a process of recognition to the promoter group; or ESOP Structure. A director who, directly or indirectly, retains more than 10% of the company’s outstanding share capital.

3. Pricing: Companies that grant options to their employees under the Employees Stock Option also Framework will be free to set the exercise price in accordance with any applicable accounting policies. ESOP Structure. 

4. Shareholder approval by separate resolution:

 The company must obtain shareholder approval by separate resolution in the following circumstances:

grant of an option to employees of a subsidiary or holding company;

or grant of alternative to recognized employees equal to or exceeding one basis point of the company’s issued capital (with the exception of arrest warrants and configurations) at the time of option grant in any one year. ESOP Structure.