In the first phase, NIIT plans to cover about one third of the employees by issuing options upto a maximum of 5 per cent of its current equity base of Rs 38.65 crore.

The scheme is pursuant to the Sebi guidelines and is subject to approval by the shareholders at the forthcoming annual general meeting in January 2000, a company release said.

The board approved grant of options to eligible employees at a grant price which is the closing price on the stock exchange where the shares are listed and which has the highest volume on November 22, 1999, the grant date.

The NIIT Esop scheme is significant from two points of view. Firstly, it will significantly increase the coverage of NIIT employees who already own part of the company. The company had offered 1 per cent of company's equity to over 1,100 employees at the time of its initial public offering in 1993. Secondly, it will be able to attract exceptional talent into the organisation to further fuel its growth.

The Esop scheme intends to cover key global employees of NIIT and its overseas subsidiaries exercise of grants in either physical or cash-less form.

The Esop grant is based on a number of parameters like performance level, consistent improvements in eva and potential tocontribute to NIIT's growth, the release added. ``We have been moving towards economic value added as our primary performance parameter, over the last two years. The Esop will help us convert our managers into owners and align employee interests with the shareholders interest,'' NIIT's chief operating officer OP Rajendran said.

``Esop is a step towards recognition of efforts of NIIT employees in key roles who are and will continue to make that crucial difference to the organisation,'' he said.