According to the conditions of the offer, therefore, the Indian employees will able to buy the allotted shares at the current price (effective date being October 1, 1998) and then encash them after the stipulated time period. Currently, Schweppes' scrip is quoting around pounds 8.6 per share on the London Stock Exchange.

The number of shares offered to each employee will differ, based on the individual's performance. The offer will cover 25 per cent of Schweppes' staff in India.

According to Cadbury Schweppes' chief executive officer Ashok Jain, the offer is part of the parent company's recently launched worldwide initiative that focuses on managing the business to maximise the returns to the shareowners. The stock option is part of the rewards element of the initiative termed as Value Based Management (VBM). The same initiative has been successfully used by businesses like Coca-Cola, Bank of America and Boots.

Schweppes has decided to opt for this initiative after focussing the last 10 years on developing its business globally through acquisitions and investments in new markets. After having reached a critical mass, the company finds it appropriate to shift focus from developing scale of business to delivering value.

According to Jain, the parent company is choosing the countries for the offer on the basis of the local company's performance and the individual's success in meeting internal financial targets. While Jain did not wish to comment on the matter, industry sources said that the parent company expects the local operation to maintain a growth rate of at least 30 per cent annually in an emerging market.

Worldwide, Cadbury Schweppes has institutionalised three financial targets for all its operations. The first is related to increasing the earnings per share by more than 10 per cent every year. The second target is to generate at least 150 million pounds of free cash flow every year while the third target relates to doubling the value of the shareowners' investment within five years.