i) Companies Act will be amended to allow IT
companies to increase their total paid up capital by additional 10 percent for allocating
the same to employees, promoters, directors, as stock options without prior approval in
the AGM at 30% below the average market price for the last six months. For additional
public or Rights offering the absolute volume of share in the pool will increase, while
the percentage ceiling remains at 10 percent. IT companies will be allowed to increase
this pool of share (for allocating to employees, promoters, directors) beyond 10 percent
upto a maximum of 25 percent with the approval from the AGM.
ii) All Public limited IT companies will be allowed
to issue shares to its employees, directors, promoters under the ESOP scheme at 30 percent
below the average market price for the last six months, provided the same is approve din
the AGM. All private limited IT companies will be allowed to issue shares to its
employees, directors and promoters at a price which has the approval of the Government
approved valuers like I-Sec and other FIs.
iii) IT companies will be allowed to distribute
shares under the ESOP scheme to employees based on the management's judgement of the
employees value addition.
iv) Clarifications will be issued that Income Tax
and Capital Gains Tax will not be applicable on the disinvestment of shares received
through an ESOP scheme.
v) The employees should be allowed to pay for stocks
at the time of exercising the option and not at the vesting point. However, the exercising
of such option will have to be done within 8 years of the grant of stocks provided the
employee continues in the company.
