After roping in Devendra Chawla, the former chief operating officer of Walmart India as its managing director earlier this year, Spencer’s Retail, in its first year of operations after demerging from CESC Ltd, will be proposing its shareholders to roll out an Employees Stock Option Scheme (ESOP).
A notice to the company’s shareholders state that the maximum number of stock options available for grant under the ESOP scheme will be 39,76,711 which represents 5 per cent equity shares of the company having a face value of Rs. 5.
However, the notice states that the scheme is applicable “provided that all Options that have lapsed (including those having lapsed by way of forfeiture) shall be added back to the number of Options that are available for Grant”.
Each of the stock option, when exercised, will be converted into one share of the company.
“If a grantee’s employment with the company stands terminated due to voluntary resignation on the part of the grantee or due to completion of his contract, then all stock options not vested in the employee as on the date of termination shall lapse forthwith”, the notice read.
Spencer’s reasoned that ESOP, besides being an incentive, is also a means for additional motivation for the employees and align interests of employees with the interest of the company.
“ESOP are considered as an effective tool to attract and retain the best talent and also serves to attract, incentivize and motivate professionals and reward exceptional performance. In order to attract, reward and retain the talented and key employees in the competitive environment and encourage them to align individual performance with company objectives, the Company intends to implement Spencer’s ESOP 2019”, the company said.
After around a month when Spencer’s was carved out of CESC Ltd as a result of demerger, Chawla joined Spencer’s in February this year as its chief executive officer and managing director after a 15-month long stint in Walmart India.
Not just permanent employees of Spencer’s, including the directors; but employees from the holding company as well as subsidiaries are also eligible to participate in the proposed ESOP.
However, a director who either himself or through his relative or through any body-corporate, directly or indirectly, holds more than ten per cent of the outstanding Shares of the company are disqualified from participating in this scheme.
The total number of options that may be granted to any specific employee under one or more tranches during a year shall not exceed two per cent stock options and options that may be granted to any specific employee in aggregate shall not exceed five per cent stock options.
It will be proposed to the company’s shareholders to create, grant, offer, issue and allot from time to time ESOP, in one or more tranches.
In this endeavour, the company’s board is proposing to facilitate setting up of an employee welfare trust - Spencer’s Employee Benefit Trust – to implement and monitor the ESOP and will be proposing to its shareholders to provide financial assistance to this Trust for secondary acquisition of the company’s shares to implement this scheme.