 "ESOP action at UTI")
Employees of the country’s oldest mutual fund - UTI - were recently allowed to convert their stock options into shares for the first time since the asset management company shelved its Initial Public Offer(IPO) plans at the time of the financial crises.
Employees were allowed in June to convert 60% of the 90 lakh shares originally made available through the offer, according to two sources familiar with the matter.
The fund house allowed 10% of the options to be converted at a price of Rs 260. Employees could convert another 50% at a price of Rs 200. The remaining 40% will be due at the end of the current calendar year.
The ESOPs (Employees Stock Option Scheme) had been granted when the company was gearing up for an IPO as per plans announced in 2007. The offering was shelved following the global financial crises. Meanwhile, stock options granted to employees began to mature. They had not been allowed to convert them when they became due in the past few years but only now in June.
More From This Section
“The company shall grant 4,560,895 options to 1,176 employees, which include 10 Key Managerial Personnel...The Company shall not grant stock options to any of its wholetime directors, independent directors, non executive directors, including the chairman and the managing director,” according to a statement in the company’s draft red herring prospectus dated January 9, 2008.
“...presently the number of Equity Shares which can be granted under ESOP are 9,000,000,” it added.
The vesting schedule mentioned in the company’s documents said that 10% of the options would have vested in December 2008. Subsequently, 20, 30 and 40% would vest in the three years up to 2011.
An email sent to a UTI spokesperson did not immediately receive a reply.