Various other issues discussed in the meeting include mandatory shareholder approval and the role stock options would play in triggering the takeover code. The committee felt the need for extensive disclosures in the profit and loss statement and mandatory shareholder approval for clearing the stock-option scheme. This would protect the shareholders from any discrepancy or lack of information.

Currently, no company incorporates the issue of stock options in its account statements. While the same should go in with the salary expenditure, most companies only put it as a note in the balance sheet stating that when the options are exercised it would amount to dilution of shareholding.

The panel has not yet decided on its next meetingwhich may be the last one. The members will in the meanwhile work out some of the details regarding the draft.

According to a member, the panel was currently studying whether stock options could be considered as another form of salary compensation. "Sebi comes into the picture only because it is the issue of stock options which means issue of securities," said JR Varma who heads the committee.

The committee was also considering the importance of the takeover code in the case of stock options i.e. would the takeover code be triggered if an employee decided to exercise his option. Also, would exercising the option in turn mean insider trading in the case of the employee?

The committee had, in its first meeting, taken up the issue of pricing shares issued under the stock-option scheme as a stock-option scheme is considered as an extention of a preferential issue.