Leading telecommunications services provider Dialog Axiata PLC has proposed to relax some of the criteria to make its high performing employees become eligible for the Employee Share Option (ESOP) scheme, which is a part of its Long Term Incentive Plan (LTIP).
On May 8, 2013, the shareholders passed a resolution to establish a LTIP by way of an ESOP to reward and retain the high performing employees with shares contingent upon achievement of certain long term goals subject to certain terms and conditions.
Under this scheme, 5.0 percent of total issued shares or 407.2 million shares were allotted during a period of eight years for those employees who maintained a minimum level of individual performance over 3-years, if the company too achieved a set performance criteria during the period.
Nevertheless, according to the original resolution passed, the board of directors was vested with the absolute discretion to determine on the eligibility criteria.
To-date, no offers have been made under the LTIP and thus no shares have been issued thus far under
But now, Dialog is seeking shareholder approval at the forthcoming annual general meeting to revise some of these earlier conditions and a special resolution is scheduled to be presented to that effect on May 9.
Among the amendments is the proposed extension of the current eight year duration of the scheme up to ten years from May 8, 2013 – the date at which the scheme was established. As a result, all shares underlying any offers made under the LTIP to eligible employees can be absolutely transferred to eligible employees on or before May 8, 2023.
This is also in line with the CSE listing rules where shares under an ESOP scheme can be absolutely transferred to employees within a period of ten years from the date of obtaining shareholder approval for such a scheme.
Meanwhile, Dialog has proposed to revise the eligibility criteria of the LTIP to enable persons who met all of the relevant eligibility criteria as at the end of the relevant performance period considered for the grant of share awards, even if such persons have ceased to meet such criteria as of the date of the
Further, the company has also proposed to revise the rules of the LTIP to clarify and affirm that the board of directors is empowered to decide the period over which a grantee must maintain a minimum level of individual performance for shares awarded to such employee to be vested in him, notwithstanding any provisions to the contrary in the rules of the LTIP or the original circular issued in 2013.
The original circular states that the shares granted would vest with employees only if the employee maintains a minimum level of individual performance over a three-year period and company achieves a set performance criteria during the period.