This document discusses an Employee Stock Ownership Plan (ESOP) as a long-term incentive for employees. It provides ownership of company stocks to employees as a profit-sharing plan. The objectives are to attract and retain talent, reward loyalty and performance, and promote an ownership culture. The document outlines SEBI guidelines for ESOP types in India and reviews advantages like capital appreciation and tax benefits, as well as disadvantages like dilution and liquidity issues. It concludes with the steps to conceptualize, financially model, implement, and manage an effective ESOP.

1. ESOP - Long term Incentive Presented By

2. Team - Elite

3. Employee Stock Ownership Plan Providing employees the ownership of stocks A Profit Sharing Plan ‘Stock option’ -right or privilege to buy stock under an offer continuing for a stated period of time at a certain price. Introduction

4. Aimed to create “wealth” Attract & Retain talent A thank-you for past loyalty and performance Promote employee ownership culture Incentive to drive future value Industry practice (sometimes) The Objective

5. ESOP in India

6. Redefine market price as the latest available closing price prior to the date on which auctions are granted Consider the exchange on which there is highest trading volume Appoint a registered merchant, banker for implementation Accounts of the company are prepared as if company is administrating ESOP SEBI Guidelines

7. ESOS – Granting employee the option to acquire the shares of the company at a predetermine price ESPS – Shares are directly allocated at the time of a public issue(may be at a discounted price) SARS – Shares are allotted and employee is free to exercise his option after vesting period. He can sell them after locking period.(Cashless transaction for employee) Sweat Equity – Shares issued for a consideration other than cash ESOP Types

8. Capital Appreciation Incentive Based Retirement Tax Advantages Company reduces it's tax liability Advantages

9. Dilution Fiduciary Liability Liquidity Stock Performance Disadvantages

10. Conceptualizing Scheme Valuation of firm’s stock by appraiser Analyze effect on existing stockholder Prepare Plan for “Repurchase obligation” Financial Modeling Employees Interaction Drafting of Legal Documents Implementing ESOP

11. Thank You For Time