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Post on 09-Feb-2017
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As a Systematic Investment Plan (SIP) adds value to yourinvestments in long term, the Stock Incentive Plans (The SIPs forBusiness) adds value to your Business in long term.
Option Online provides complete solutions for your SIPs. Weprovide you 360O services to design, structure, document andimplement your SIPs, be stock option, share purchase,appreciation rights, phantom stocks, RSUs, etc. Our spectrum ofservices includes:
Designing and structuring of SIP Documentation for SIP and its implementation Implementation of SIP Drafting of trust deed ESOP Trust formation Advising on Financial accounting Advising on Taxation aspects Valuation Listing services Review of existing schemes
And above all, with complete confidentiality and security.
Pre SIP ServicesDiscuss the requirements of the clients at lengths to provide themvarious alternatives and structures to arrive at the optimal solution forthe needs of the clients. We tend to create a transparent structure forimplementation of SIPs to address all possible concerns arising infuture. We create SIP structures for the client, draft the scheme &related documentation and create templates to implement the Schemeand monitor the same.
Post SIP ServicesAssist the clients by providing them the fair valuation of the stockoptions and also assisting them in P&L accounting, statutorydisclosures under Companies Act / SEBI Regulations, taxation,compliances, etc. We provide reliable valuation report for accountingpurposes also. We also undertake the services for review of existingESOP schemes of the Company and suggest modifications for makingthe plans better.
Support ServicesSupport services for liaison with the stock exchanges for inprincipleapproval, documentation for inprinciple approval, drafting of trustdeed, registration of trust, trusteeship services, exit opportunities,documentation and other support services for the SIPs.
ESOP: Stock options are granted to an employee whichwill vest in him over a defined period at a preagreedprice or pricing formula.ESPS: Equity shares are allotted to an employee which aresubject to certain lockin period.SAR: A right is conferred to an employee to gain monetarybenefits arising out of increase in the price of equityshares & such monetary benefit is settled in cash or kind.RSU: Units granted to a participant, but shares are notissued at the time of the grant. After the participant of aRSU satisfies the vesting requirement, the companydistributes shares, or the cash equivalent of the numberof shares used to value the unit.RSA: Grant of companys shares in which the recipientsrights in the shares are restricted until the shares vest. Oncompletion of vesting requirements, employee has theright to own and deal with his shares independently.TSR: Is a performance based stock awards plan, wherevesting and / or exercise is linked with companys stockoutperforming an index or a defined peerset.
Retaining Key employees and reducing attrition Attract fresh talent in the Organisation Substitution for variable pay in long run Reduces cash outflow in initial years of growth Sharing success with employees Tax efficient earnings for employees No upper cap on returns Lets the market reward the performance of employees Improves corporate image
Grant Date: It is the date on which options are deemed tobe granted to an employee
Grant Price: It is the price at which the options aregranted to an employee and by paying which he can ownequity in the Company. It is also referred to as ExercisePrice
Vesting Period: It is the period for which an employeeshould be associated with the Company to becomeeligible to apply for equity shares under SIP. The minimumrequired period is one year.
Vesting Date: It is the date on which the Vesting period isover.
Exercise: It refers to the act of applying for equity sharesin the Company after completion of the Vesting Period.
Exercise Period: It refers to the period within which, aftercompletion of the Vesting Period, the employee canexercise his Vested Options.
Vested Options: It refers to the options for which theVesting Period has been successfully completed.
Unvested Options: It refers to the options for which theVesting Period is still continuing.
Intrinsic Value: It is the difference between the fair valueof equity shares on the date of grant of options and theexercise price.
Fair Value: It is the value of an option generally derivedthrough Black Scholes Option Pricing Model or in certaincases through Binomial Model. This method derives valueof an option after considering various parameters like fairvalue of equity shares, exercise price, volatility, dividendyield, risk free rate of return and life of options.
One time visvis Regular PracticeOne time: Recognizes the existing employees and theirpast performanceRegular practice: Helps to attract and retain new talent, inaddition to rewarding the present employees
Stock Options visvis Direct Equity participationStock Options: Gives an option to exercise for equity infuture, which need not immediately dilute the votingcapitalEquity Schemes: Immediately dilutes the existingshareholders and primarily rewards the pastperformances
Primary Issuance visvis Secondary SchemesPrimary issuance: Results in dilution of all shareholdersSecondary schemes: Avoids dilution and existing sharecapital pool can be allocated
Trust visvis nontrust routeTrust route: Adopted for convenience purposes anddisclosure, which removes the administrative hassles atthe Board levelNon trust route: Generally adopted for companies withsmall size of population covered under SIPs
Intrinsic value visvis Fair valueIntrinsic value: Reflects the difference between the fairvalue of stock price and the offered priceFair value: Reflects the value of the option taking intoaccount other factors viz. time value, interest rate,volatility, dividend yield, etc.
OptionPlan EquityPlan Appreciationrights/stockaward
Allemployees Identifiedemployees Directors
Onetimeapproach Regularpractice Partofannualappraisalpolicy
Strikeabalancebetween Entrepreneurshipvaluecreated Sharingwealthwithemployees
Atfairvalue Atdiscounttofairvalue Discountlinkedtoperformance
Periodofvesting Periodofexercise Lockinofshares
Uniform/Bulletvesting Back/frontendedcliffvesting Performancebasedvesting
Listing Buyback Changeincontrol/PEexit
Complexityinaccounting Valuation Reviewwithchangingtimes
Corporate Advisory & Transaction Services: Transaction structuring for M&A Due Diligence Identifying alternate structures Compliances Advising and assisting in obtaining all regulatory
approvals Liaison with regulatory authorities Coordinating with other intermediaries Documentation and drafting of scheme,
applications, etc. Obtaining listing approvals Listing under Rule 19(2)(b) Post transaction assistance
Capital Market Advisory Services: Advisory on the structuring and raising of funds
through public offer, rights issue, etc. Independent and objective advice on the Pre
IPO structuring, strategic alternatives, assistingin documentation, record room creation, etc.
Advisory on capital structuring through buyback, open offers, consolidation of holding, etc.
Advising on direct listing, delisting, exit offer fordissemination board companies, etc.
Opportunities for mergers, demergers,consolidation, acquisitions
Interaction with the regulatory authorities Pre and post transaction advisory services Minority shareholders issues
Stock Incentive Plans: Advising on the structuring for stock incentive
plans, including vanilla option plan, sharepurchase plan, appreciation rights, restrictedstock units awards, etc
Discussion with the Management on theirphilosophy for SIPs
Drafting of SIP and related documents Advisory on implementation of SIPs ESOP Trust formation Advising on accounting and taxation aspects Valuation for the stock options Assistance for allotment and listing of equity
shares SIP agreements with participants Review of existing SIP / ESOP / similar schemes
Startup Advisory Services: Advisory on structuring of startup enterprises Fund raising for start ups Pitch presentations Advising on stock incentive plans Drafting of various agreements for fund raising Advising on compliances Valuation for fund raising and regulatory
As the name suggests, at SUNDAE, we tend to workamongst various limiting situations and diversebusiness challenges in the corporate structure withthe right blend of advisory to arrive at the bestsolution suited to all stakeholders with valueenhancement strategies, policies and transactions Innovation: Provide strategic alternative
solutions to all your needs Integrity: Transaction execution till the end with
personal involvement Passion: We coown the implementation of
solutions and take an additional mile even ifrequir