Vaibhav Global Limited:- 800.5 INR (NSE)
Welcome to VGL ESOP Portal
Welcome to Vaibhav Global Limited (VGL) comprehensive VGL ESOPs Portal. This web based portal is designed for managing ESOPs with a view to simplify the ‘Exercise Process’ for VGL employees in just a few clicks. VGL is having Employee Stock Option Plan (ESOP) which provide employee compensation in recognition of their contribution to the overall performance for the organization, Align employees’ interests with those of shareholders of the Company by virtue of such shareholding and as an incentive for higher performance level with a view to attract and retain the best talent, encouraging employees to align individual performance with Company objectives, and promoting increased participation by them in the growth of the Company.
This Portal manages the complete lifecycle of ESOP plan of the Company post its implementation keeping in view the regulatory framework under which ESOP functions in line with Companies Act, 2013 and SEBI (Share Based Employee Benefits) Regulations, 2014.
Lifecycle of ESOPs:
An employee stock ownership plan (ESOP) is an employee benefit plan that offers advantages to business owners, their companies, and their employees.
ESOP is an option with employee to buy the stipulated number of Company’s shares at a future date against granted options.
The Options are not actual shares, but a right to buy the said number of shares at a future date. They become shares only when they get vested according to the plan and are exercised by the optionees.
→ ESOP cycle starts with your employer granting you Options
→ Vesting of options is the next stage on completion of the vesting period / conditions
→ After vesting period, Option holder can then Exercise the vested options by paying the exercise price and taxes
→ Your employer will then allot you shares against the Options exercised
→ You can choose to sell or hold the shares
(a) Grant of option
Grant of option is issue of the Right provided by the company to its employees to buy stipulated number of equity shares of the company at a pre-determined price within a certain timeframe.
(b) Vesting of option
The Right granted vests (becomes exercisable) upon fulfilment of certain pre-defined conditions/period. Vesting can also be understood in general parlance as earning the right to exercise the options.
(c) Vesting period & Vesting percentage
Vesting period is the period that an employee has to wait till he can exercise his options. It is mentioned in the grant letter at the time of grant of option.
Vesting percentage refers to that portion of total options granted, which you will be eligible to exercise.
Eg: Options vest over a period (Vesting period) of 2-3 years in lots (Vesting percentage).
(d) Exercise price
Exercise price is the price that you have to pay to convert your options into shares e.g. if the options are granted at an exercise price of Rs.10 and you want to exercise 100 options then you have to pay Rs.1000 (10 x 100) while exercising the Option.
(e) Exercise period
This is the period within which you can decide to exercise your options. This period starts from the date of vesting.
At the time of grant and vesting of options
No tax is payable at the time of grant and vesting of options as per current Indian tax laws.
At the time of exercise of options (Perquisite Tax)
As per the current tax laws, Income tax is payable on exercise of stock options as follows: Taxable value = Number of options exercised *[(Market price on exercise date) - (exercise price)] This amount is taxed at the normal tax slab rates. The Company shall recover this tax amount from you at the time you exercise your options.
At the time of sale of shares (Capital Gain)
Taxable value = Number of shares sold*[(Net selling price) - (Market price on exercise date)].
This gain is taxed as a Capital gain. The rate of tax will depend upon the period of holding of shares post exercise of shares.
Taxation laws may change periodically and it is recommended that you consult your Tax Advisor/Company Secretarial office to understand the tax implications on sale of such shares.
Cashless is a mechanism for exercise of options with a zero cash outflow for the employee.
Here, the employee authorises the ESOP Trust to execute a cashless exercise. As per the employee instructions, the Trust will either sell part of the shares to cover the employee obligations (exercise price +taxes) and transfer the remaining share to the employees, or, sell all the shares and remit the net proceeds to the employee.
Cashless mechanism is a hassle free way for employees to maximise their gains without paying or borrowing any money.
No special approvals are required at the time of grant of options to foreign nationals. They are treated at par with the Indian employees. However, for exercise of options and holding shares, foreign nationals are required to open a trading and a demat account in India. Company is required to handle some compliances with the RBI.
Options can be exercised by remitting funds through normal banking channels. There are some additional documents required to be sent such as KYC, TRC etc.