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ITC okays employees' stock option scheme

Tobacco major ITC Limited announced the launching of a unique stock option scheme for its employees after the company shareholders approved two special resolutions to this effect at an extraordinary general meeting in Calcutta on Wednesday.

Formally announcing the employee stock option scheme (ESOS), ITC chairman Y C Deveshwar informed the meeting that though the scheme would be an 'effective strategy' to attract and retain the best talent in an increasingly competitive business environment, it would also be an instrument to synergise the interest of employees with those of the shareholders by creating a common sense of purpose in building sustainable shareholder value.

Deveshwar said that the granting of stock options to ITC employees would ensure the issuance of shares not exceeding 5 per cent of the issued and subscribed share capital of the company as on March 31, 2000.

He said that as stock options had been introduced in India recently, the coverage would initially be confined to only directors and senior managers of the company and its subsidiaries, numbering around 80.

But on the basis of experience the board might, however, consider extending the coverage to other levels of management also at a later date.

Claiming that the eligibility for the issuance of stock option would depend on the performance of the company as well as on the level and grade of its employees, Deveshwar said that the vesting of options would commence one year after the date of grant. There is a possibility of it being extended for three more years. The vesting might also take place in tranches, he said.

Deveshwar said the exercise price would be the closing market price of the company's shares on the National Stock Exchange on the date of grant or a price not lower than the average market price of the company's shares in the six months preceding the date of grant.

He said though the board would determine the number of options to be issued to an employee, nobody would be granted options more than 2,45,414 ordinary shares in a block of five years (which is 0.1 per cent of the issued and subscribed share capital of the company).

Both the resolutions were unanimously passed by the shareholders without any amendment.

Later, the ITC board began its meeting to approve the last quarter financial results of the company.

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