SH - 6 Register of Employee Stock Options

What is an Employee Stock Option Register?

The Employee Stock Option Register is a crucial document that helps companies manage stock options granted to their employees. It aligns with the strict guidelines laid out in s.62(1)(b) & r.12(10) of the Companies (Share Capital & Debentures) Rules, 2014. This register serves as a comprehensive record that includes details about each grantee, the number of options they have been granted, and a timeline of important dates regarding these options.

Key Components of the Register

Every entry in the Employee Stock Option Register contains specific information necessary for tracking and auditing. Here’s what you typically find:

• Grantee Name: The person receiving the options.

• Number of Options Granted: Total options awarded to the grantee.

• Date of Vesting: When the options become available for the employee to exercise.

• Exercise Period: The timeframe in which options can be exercised.

• Date Options Exercised: When the employee opts to use the granted stock options.

• Options Exercised: The count of options that have been utilized.

• Exercise Price: The price at which the employee can purchase shares.

• Shares Resulting from Exercise: Total shares acquired post-exercise.

• Folio Number: The corresponding entry in the register of members.

• Lock-In Period: Information on any restrictions placed on selling the shares.

• Options Lapsed, If Any: Details on any unutilized options.

• Total Options in Force: The total number of options still active.

• Amount Forfeited/Refunded: Any funds returned if an option isn't exercised.

• Variations of Terms: Changes in the option terms and their impacts.

• Signature: Sign-off for validation.

• Remarks: Any additional notes relevant to the options.
  

Importance of Maintaining This Register

A well-maintained Employee Stock Option Register is vital for legal compliance and good corporate governance. It not only helps organizations avoid penalties but also ensures transparency and confidence among employees. By keeping track of every detail, companies can efficiently handle stock options, improve communication, and foster trust among employees. This register plays a significant role in an organization's accountability regarding benefits provided to employees.

In conclusion, understanding how to manage the Employee Stock Option Register in accordance with s.62(1)(b) & r.12(10) of the Companies Rules is essential for any organization that offers stock options to their workforce. Regular updates and diligent record-keeping will ensure the process remains straightforward and beneficial for all parties involved.