NEW DELHI, Dec 16: The government has decided to introduce a stock option scheme for employees in public sector units that are going in for disinvestment or fresh issue of equity. The new scheme would replace the direct sale of upto 200 shares per employee.

A trust in PSUs will hold shares on behalf of the employees. The trust, Employees Mutual Benefit Fund, will ensure that employee shares do not get dispersed in the public. It will also ensure continuity as employees will be allowed to sell shares only to the trust, industry minister Murasoli Maran announced at a press conference on Tuesday.

The cabinet cleared the proposal on Monday night. The scheme will be applicable to all cases of disinvestment or fresh equity by a PSU and would be subject to provisions of company law and Sebi guidelines as applicable from time to time, the minister said.Employees will be offered 5 per cent of the paid-up capital at a 15 per cent discounted price on the average disinvestment price with a lock-in period of three years. It would not be necessary for PSUs to seek specific approval of the government for promulgation of the scheme within the broad parameters, he said. The scheme is expected to achieve the objective of increasing efficiency, productivity and profitability of enterprises. The scheme was first mooted by representatives from PSU unions, Maran said.

The trust will have voting rights on behalf of employees. Currently only Maruti Udyog Ltd has such a fund which is managed by nine trusts, he said.

The trust will have an independent existence whereby it will maintain an arm's length relationship from management as well as labour in terms of professional decision making. It will have professional and independent members on its board, he said. The price at which shares will be issued and accepted for surrender from year to year will be decided by the trust based on net worth of the trust at the end of the previous financial year, he said. The trust will issue non-transferable beneficiary certificates against contributions made by beneficiaries. Every financial year each beneficiary can contribute to the trust a sum not exceeding one-sixth of his annual pay plus dearness allowance, the minister said.

The trustees shall distribute to the beneficiaries the net earnings in proportion to the principal and periodicity of the beneficiary certificate as held by the beneficiary during the year. An employee will automatically cease to be a beneficiary on retirement or death. The trustees shall pay to the beneficiary within one month of the date of surrender of the beneficiary certificate, the minister said. The trust will have various other functions besides holding shares for the employees. It will extend financial support, handle investments and undertake buy-back of shares, he said.