Procedure for the Issue of ESOP
Planning & Consultancy
The first step is to plan the ESOP and to prepare the list of the eligible employees to whom the ESOP scheme is provided and how many shares are to be given under this scheme
ESOP Trust Formation
Listed Companies plan their ESOP through Trusts, Companies may invest their funds in the ESOP Trust to enable the company to transfer the shares in a cashless exercise.
The Board meeting is conducted to approve the ESOP by the Directors and notice of EGM is also sent for holding General Meeting.
Take Approval from Shareholder
The ESOP Scheme is approved by passing Resolution of members. File MGT-14 within 30 days of passing Special/ Ordinary Resolution.
Letter of Option to Employees
Once the shareholders approval is taken, the grant letter is to be given to eligible employees to exercise their right after a given period of time.
Exercising the Option
The Option is either exercised or rejected by the employees, if exercised by the employees then the next step is allotment of shares.