Bisen mentioned that his client, JK Aluminium Limited, is planning a public issue of equity shares and intends to offer options to the directors, officers, or employees of the company under an ESOP. The CFO of the compan

(i) As per the provisions under section 62(1)(b) of the Companies Act, 2013 and Rule 12 of the Companies (Share Capital and Debenture) Rules, 2014 the following employees including directors shall be eligible for ESOP: a permanent employee of the company who has been working in India or outside India; or a director of the company, whether a whole time Director or not but excluding an Independent Director; or an employee as defined in clauses (a) or (b) of a subsidiary, in India or outside India, or of a holding company of the company but does not include - an employee who is a promoter or a person belonging to the promoter group: or a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the company. The conditions mentioned in sub-clause (i) and (ii) shall not apply to a startup company up to ten years from the date of its incorporation or registration. Accordingly, all permanent employees subject to exceptions and all directors shall be eligible but the independent directors shall not be eligible for ESOP. (ii) Company has freedom to specify lock-in period Rule 12(6)(b) of the Companies (Share Capital and Debenture) Rules, 2014 states that the company shall have the freedom to specify the lock-in period for the shares issued pursuant to exercise of option, Hence, a lock-in period for five years can be provided under ESOP.