1. The offer shall be made by notice specifying the number of shares offered and limiting a time not being less than 15 days and not exceeding 30 days from the date of the offer within which the offer, if not accepted, shall be deemed to have been declined;
2. The notice shall be despatched through registered post or speed post or through electronic mode to all the existing shareholders at least 3 days before the opening of the issue.
3. The offer shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person; and the letter of offer shall contain a statement of this right;
4. After the expiry of the time specified in the letter of offer, or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose of them in such manner which is not disadvantageous to the shareholders and the company;
It shall not apply to the increase of the subscribed capital of a company caused by the exercise of an option as a term attached to the debentures issued or loan raised by the company to convert such debentures or loans into shares in the company:
The terms of issue of such debentures or loan containing such an option have been approved before the issue of such debentures or the raising of loan by a special resolution passed by the company in general meeting.
A company having a share capital may issue further shares to employees under a scheme of employees’ stock option, subject to special resolution passed by company and subject to such conditions as prescribed under Rule 12 of the Companies (Share Capital and Debentures)Rules,2014;
Issue of Employee stock options:
According to Section 2(37) of Companies Act,2013, “employees’ stock option” means the option given to the directors, officers or employees of a company or of its holding company or subsidiary company or companies, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price;
A company, other than a listed company, which is not required to comply with SEBI Employee Stock Option Scheme Guidelines shall not offer shares to its employees under a scheme of employees’ stock option [hereinafter referred to as “Employees Stock Option Scheme” (ESOS)], unless it complies with the following requirements, namely:-
Approval by shareholders:
The issue of Employees Stock Option Scheme has been approved by the shareholders of the company by passing a special resolution.
(a) a permanent employee of the company who has been working in India or outside India; or
(b) a director of the company, whether a whole time director or not but excluding an independent director; or
(c) an employee of a subsidiary, in India or outside India, or of a holding company of the company or of an associate company but does not include-
(i) an employee who is a promoter or a person belonging to the promoter group; or
(ii) a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than 10%of the outstanding equity shares of the company.
Disclosure in Notice:
The company shall make the following disclosures in the explanatory statement annexed to the notice for passing of the resolution-
a. the total number of stock options to be granted;
b. identification of classes of employees entitled to participate in the Employees Stock Option Scheme;
c. the appraisal pr