Register of employee stock options

Rule 12 requires a register of employee stock options in Form SH-6, written up as options are granted, vest, are exercised or lapse.

What goes in it

• Employee and date of grant
• Number of options and exercise price
• Vesting, exercise and lapse, with dates
• Shares allotted on exercise

Mistakes that come up

• Grant letters issued but the register written up only at exercise

Keeping it electronically

Section 120 allows records to be kept in electronic form in the manner the rules prescribe. Rule 27(1) of the Companies (Management and Administration) Rules, 2014 speaks of listed companies and companies with 1,000 or more shareholders, debenture holders and other security holders; for a smaller company, whether Keel holds the register itself or a sealed copy kept beside it is for the company and its company secretary to decide. Rule 28 sets the conditions for electronic records, among them protection against unauthorised alteration, a dated backup at least once a day, records that can be reproduced in readable form, and systems that can "discern invalid and altered records" (rule 28(2)(e)); under it the board names who is responsible, where backups are kept and who has access.

How it is kept on Keel

Keel does not hold this register yet. Keel holds the register of members, the register of directors and key managerial personnel, the register of charges, the register of loans, guarantees, security and acquisitions (MBP-2), the register of contracts with related parties (MBP-4) and the board minutes. Until this one is added, your firm keeps it as it does now.