ISSUE AND REDEMPTION OF PREFERENCE SHARES GRANTED BY COMPANY IN INFRASTRUCTURE:
A engaged company in the setting up, granted and dealing with of infrastructural projects may issue shares preference for a period of twenty years exceeding but not exceeding thirty years, subject to minimum redemption ten per cent of preference shares such per year from the twenty first year on wards or earlier on basis of proportionate, at the preference shareholders option
An transfer instrument of securities held in physical form shall be in form No. SH4 and every instrument of transfer with its execution date mentioned thereon to the company shall be delivered from such execution date within sixty days.
In the company case not having share capital , sub-rule provisions (1) shall apply as if therein reference to securities were instead references instead to the interest of the company member.
A company shall not register a partly paid shares transfer, unless the company have given a notice in Form No. SH.5 to the transferee and has given the transferee to the transfer no objection within two weeks from the receipt date of notice.
Employee issue stock options.
A company other than a listed company, which is not required to comply with Securities and Exchange Board of India Employee Stock Option Scheme guidelines shall not offer shares under employee scheme to its employees’ stock option(therein after record to as “Employee Stock Option scheme”), unless it complies with the requirements namely-
the Employees Stock Exchange Option Scheme has been approved by the company shareholders by a special resolution passing.
Explanation:- For the clause purpose(b) of sub-section(1) of section 62 and this “Employee rule” means –
a, The company permanent employee who has been working in India or Outside India or
b, The company director, whether a full-time director or not but excluding a independent director; or
c, an employee as defined in clause (a) or (b) of a subsidiary, in India or Outside India, or of holding company of the company or but does not include-
i, an employee who is a promoter or a belonging person to the group of promoter or
ii, a director who either himself or his relative through or through any body corporate, indirectly or directly, holds more than ten percent of the company equity shares outstanding..
2. The company shall make the disclosures following in the statement explanatory annexed to the notice for the resolution passing-
a, the total number to be granted for the stock options.
b, identification of the employees classes entitled to participate in the Employees Stock Option Exchange Scheme.
c, The process of appraisal for determining the employees eligibility to the Employee Stock Option Scheme;
d, the requirements of vesting and vesting period;
e, the maximum period within shall be vested with the options;
f, The price of exercise or for arriving formula at the same;
g, The exercise price period or exercise process;
h, The Lock-period, if any;
i, The options maximum per employee to be granted and in aggregate;
j, The method which the company shall use its value options;
k, The conditions under which vested options in employees may lapse e.g., in termination case for misconduct of employee;
l, The time period specified within which the employee shall exercise the options vested in the events of a employment proposed termination or employee resignation.
m, a statement that the company to the effect shall comply with the accounting standards applicable.
3. The granting companies to its employees option pursuant to Employee Stock Option Scheme will have to determine the freedom in conformity the exercise price with the accounting policies applicable, if any;
4, The shareholders approval by way of resolution separate shall be obtained by the company in case of–
a, grant the employees option of subsidiary or holding company or
b, grant to identified employees of option, during any one year, equal to or one percent exceeding of the capital issued (excluding outstanding conversions and warrants) of the company at time of option to grant.
5 a, The company may by special resolution, vary the Employee Stock Option schemes terms yet not exercised by the provided employees such variation is not to the interest prejudicial of the option holders to the interest.
b, The notice of special resolution passing for variation of Employees Stock Option scheme terms shall disclose full of the variation, therefore rationale and the employees details who are such variation beneficiaries.
6 a, There shall be less than one year minimum period between the grant of options and the vesting of option.
Provided that in the case where the granted option by a company under its Employee Stock exchange Option Scheme in lieu of options held by the person that are same under an Employees Stock exchange scheme in another company, which has merged or amalgamated with the mentioned company first, the period during which the granted options by the merging or amalgamating company were held by him shall be adjusted against the vested period minimum requirement under this clause;
b, The company shall have the liberty to specify the lock-in-period for the issued shares pursuant of option to exercise.
c, The Employees shall not have right to receive any dividend or to vote or in any manner enjoy the shareholders benefit in accordance of option granted to them, till the issued shares of option on exercise.
7. If any, the amount, by the employees payable, at the time of grant of option—
a, may be by the company forfeited if it is not exercised the option by the employees within the exercise period; or
b, The amount to the employees may be refunded not vested the options due to the conditions non-fulfillment relating to option vesting as per the Employees Stock Option scheme.
8, a, The granted option to employees shall not be transferable to any other person.
b, the granted option to the employees shall not be pledged, mortgaged, hypothecated or encumbered otherwise or in any other manner alienated.
c, Subject to clause(d) , other than no person the employees to whom the option is granted shall be entitled to exercise the option.
d, In the death event of the employee while in employment, all the options to him granted till such date shall vest in the legal heirs or the deceased employee nominees.
e, In the employee case suffers a incapacity permanent while in employment all the granted options to him as on the incapacitation permanent date, shall vest on that day in him.
f, In the resignation event or of employment termination, not vested all options in the employee as on that day shall expire. However the employee can focus on the granted option which are vested within the specified period in this behalf, subject to the terms and conditions under the granting scheme such options by the board are approved.
9. The Directors Board shall, inter alia, in the Directors’ Report disclose of the years, the details following the Employee Stock Option Scheme:
a, Granted option,
b, vested Option;
c, Exercised Option;
d, The shares total number arising as a result of exercise of option;
e, The lapsed option;
f, The price of exercise;
g, variation of options of terms.
h, Realized money by exercise of options.
i, Force of total number of options;
j, Wise details of employees granted options to:-
- Personnel key managerial.
- Any other employee who receives grant option during one year of option amounting to more or five per cent granted during that year.
- Identified employees who were option granted, during any equal one year to or exceeding of the issued capital one percent (excluding warrants outstanding and conversions) of the company at the grant time.
- 10 a. The company shall maintain a Employee Stock options Register in Form No. SH.6 and forthwith shall enter therein particulars of option granted under clause (b) of section 62 of sub-section (1).
- The Employee Stock Options register shall be maintained at the registered company office or such other place as may decide by the board.
- The register entries shall be authenticated by the secretary of the company or by any authorized other person for the purpose by the board.
- Where the company equity shares are listed on a stock exchange recognized, the Employee Stock option scheme shall be issued, in accordance with the regulations made by the Exchange Board and securities of India in this behalf.
- ISSUE ON THE PREFERENTIAL BASIS:
- 13.(1) For the clause purpose (c) of sub-section (1) of section (1) of section 62, authorized if by a passed special resolution in general meeting passed, shares may be provided in any manner by the company whatsoever including of a preferential order by way, to any persons whether or not include those persons referred the persons to in clause (a) or clause (b) of sub-section (1)of section 62 and on preferential basis such issue should also comply with laid down conditions in section 42 of the Act.
- Further provided that the shares price to be issued on a preferential basis by a listed company to be determined shall not be required by the valuation report of a valuer registered.
- Explanation- For this rule purpose, (i) the “Preferential Order” expression means an shares issues or other securities, by a company to any person select or persons group on preferential basis of person and does not include shares or other offered securities through a public issues, issue of rights, employee stock option scheme, employee stock purchase scheme or an sweat equity shares issue or shares of bonus or depository receipts in a country issued outside India or foreign securities.
- The expression , “shares or other securities” means fully convertible debentures, equity shares, convertible party debentures or any other securities , which would be into convertible or with equity shares exchanged at a later date.
- When the shares preferential offer or other securities by the company made whose share or are listed other securities on a stock exchange recognized, preferential offer such shall be made in respect with the provisions of the Act and made regulations by the Securities and Exchange Board, and if they are not mentioned, the preferential offer shall be made in respect with the provisions of the Act and made rules here under and subject to compliance with the requirements following, namely;-
- The authorized issue by its articles of association;
- The issue has been authorized by a members special resolution;
- The allotted securities by way of preferential order shall be fully made up at their allotment time.
- the company shall make the disclosures following in the explanatory statement to be annexed of the general meeting notice pursuant to section 102 of the Act;
- i, The issue object;
- ii The shares total number or to be issued other securities;
- iii. The price or price band at/within which is proposed the allotment;
- iv basis on which has been arrived the price at along with the registered valuer report;
- v, relevant date to which the price has been arrived at with reference;
- vi, The person classes or class to whom the proposed allotment to be made;
- vii, Promoters intention, directors or key managerial personnel to the offer to subscribe;
- viii, the time proposed within which shall be compiled the allotment;
- ix, the proposed allot tees names and the post percentage preferential offer capital by them that may be held;
- x, The control change, if any, in the company that would consequent occur to the preferential offer.
- xi, The persons number to whom allotment on preferential basis have been made already during the year, in terms of number of securities as well as price;
- xii, The proposed allotment justification to be made for consideration other than together cash with the registered valuer valuation report:
- xiii, the pre issue and the post issue shareholding pattern of the company in the format following
- e, The allotment of securities on a preferential basis made to the special resolution pursuant passed pursuant to sub-rule(2) (b) shall be completed with a twelve months period from date of the special resolution passed.
- f, If the securities allotment is not completed within twelve months from the passing date of the special resolution, another special resolution shall be passed for the company to such allotment thereafter to complete.