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Notice For Annual General Meeting: ESOP Resolution

Annual Report 1999-2000

Special Business

 

To consider and, if thought fit, to pass, with or without modification, the following Resolution as a Special Resolution:

 

RESOLVED that, in partial modification of the Resolutions passed by the Members at the Forty-fourth Annual General Meeting held on July 30, 1999 vide Item nos.22 and 23 of the Notice convening that Meeting, relating to Employee Stock Option Scheme (ESOS) for the benefit of such person or persons who are in the permanent employment and the Directors (including whole time Directors) of the Company, its subsidiary companies and its holding company, and pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956 (including any amendment thereto or re-enactment thereof), and in accordance with the provisions of the Memorandum and Articles of Association of the Company and the regulations / guidelines prescribed by the Securities and Exchange Board of India or any other relevant authority from time to time, the Board be and is hereby authorized to create, issue, offer and allot a number of equity shares under ESOS not exceeding in the aggregate (including any equity shares created, issued and allotted pursuant to the options granted earlier under ESOS), five percent of the aggregate of the number of issued equity shares of the Company on the date of the Annual General Meeting approving this Resolution.

 

Item No.9

 

At the Forty-fourth Annual General Meeting held July 30, 1999, the Members had approved an Employee Stock Option Scheme (ESOS) for the benefit of such person or persons who are in the permanent employment, and the Directors (including whole time Directors), of the Company, its subsidiary companies and its holding company. Pursuant to such approvals 2,323,750 options under ESOS were granted on August 3, 1999 for the financial year 1998-1999 to the eligible employees including whole time Directors of the Company. Each option confers on the employee/whole time Director, a right to apply for one equity share of Rs.10 of the Company at Rs.85.55, the closing market price prevailing on the date of the grant on the National Stock Exchange (NSE), which recorded the highest trading volume on that date.

 

On the basis of the recommendation of the Board Governance Committee (which, inter alia, acts as the Compensation Committee), the Board, at its Meeting held on April 28, 2000, approved grant of further 2,922,500 options for the financial year 1999-2000 to the eligible employees including whole time Directors of the Company. Each option confers on the employee/whole time Director, a right to apply for one equity share of Rs.10 of the Company at Rs.85.55, the closing market price prevailing on the date of the grant on the National Stock Exchange (NSE), which recorded the highest trading volume on that date.

        

On the basis of the recommendation of the Board Governance Committee (which inter alia, acts as the Compensation Committee), the Board, at its Meeting held on April 28, 2000, approved grant of further 2,922,500 options for the financial year 1999-2000 to the eligible employees (including wholesome Directors) of the Company and its subsidiary companies. Each option confers on the employee / whole time Director, a right to apply for one equity share of Rs.10 of the Company at Rs.133.40, the closing market price prevailing on the date of the grant on the Stock Exchange, Mumbai (BSE), which recorded the highest trading volume on that date.

        

The maximum number of equity shares of the Company that can be created, issued, offered and allotted pursuant to the options granted under ESOS as approved by the Members at the Forty-fourth Annual General Meeting held on July 30, 1999 is 7,853,115 and the number of options already granted is 5,246,250.

        

The Board Governance Committee felt that in order to enhance employee motivation and retention and to enable the employees to participate in the future growth and financial success of the Company, adequate number of shares should be available under ESOS. To facilitate this, the Board Governance Committee recommended that the maximum number of equity shares of the Company that can be created, issued, offered and allotted pursuant to the options granted under ESOS be enhanced from one per cent to five per cent of the aggregate of the number of issued equity shares of the Company. The Board at its Meeting held on April 28, 2000 has accepted the recommendations of the Board Governance Committee and decided to seek the approval of the Members pursuant to the provisions of Section 81(1A) and other applicable provisions, if any, of the Companies Act, 1956.

        

The other terms and conditions of ESOS remain unchanged.

        

Approval of the Members is sought in terms of Section 81 (1A) and other applicable provisions, if any, of the Companies Act, 1956, to increase the maximum number of equity shares of the Company that can be created, issued, offered, and allotted pursuant to the options granted under ESOS, including shares already created, issued, and allotted pursuant to the options granted under ESOS earlier, from one per cent to five per cent of the aggregate of the number of issued equity shares of the Company on the date of the Annual General Meeting approving the Resolution at Item No.9 of the Notice.

        

The Directors recommend the adoption of the Resolution at Item No.9 of the Notice. All the Directors are interested in the Resolution at Item No.9 to the extent of the benefit they may derive under ESOS.