Sections Particulars
1 Short title and commencement
1.1 These Guidelines have been issued by Securities and Exchange Board of India under section 11 of the Securities and Exchange Board of India Act, 1992. 1.2 ...
2 Definitions
2.1 In these Guidelines, unless otherwise defined,- (1) "employee" means- (a) a permanent employee of the company working in India or out of India; or (b) a ...
4 Eligibility to participate in ESOS
4.1 An employee shall be eligible to participate in ESOS of the company. 4.2 An employee who is a promoter or belongs to the promoter group shall not be eligi...
5 Compensation Committee
5.1 No ESOS shall be offered unless the company constitutes a Compensation Committee for administration and superintendence of the ESOS. 5.2 The Compensation ...
6 Shareholder approval
6.1 ESOS can be offered to employees of a company unless the shareholders of the company approve ESOS by passing a special resolution in the general meeting. ...
7 Variation of terms of ESOS
7.1 The company shall not vary the terms of the ESOS in any manner which may be detrimental to the interests of the employees. 7.2 The company may by special...
8 Pricing
8.1 The companies granting option to its employees pursuant to ESOS will have the freedom to determine the exercise price subject to conforming to the account...
9 Lock-in period and rights of the option-holder
9.1 There shall be a minimum period of one year between the grant of options and vesting of option. 9.2 The company shall have the freedom to specify the lock...
10 Consequence of failure to exercise option
10.1 The amount payable by the employee, if any, at the time of grant of option:- (a) may be forfeited by the company if the option is not exercised by the em...
11 Non-transferability of option
11.1 Option granted to an employee shall not be transferable to any person.  11.2 (a) No person other than the employee to whom the option is granted shall be...
12 Disclosure in the Directors Report
12.1 The Board of Directors, shall, inter alia, disclose either in the Director’s Report or in the annexure to the Director's Report, the following details o...
13 Accounting Policies
13.1 Every company that has passed a resolution for an ESOS under clause 6.1 of these guidelines shall comply with the accounting policies specified in Schedu...
14 Certificate from Auditors
14.1 In the case of every company that has passed a resolution for an ESOS under clause 6.1 of these guidelines, the Board of Directors shall at each annual g...
15 Options outstanding at Public Issue
15.1 The provisions of the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines prohibiting initial public offering by compa...
16 Eligibility to participate in ESPS
16.1 An employee shall be eligible to participate in the ESPS. 16.2 An employee who is a promoter or belongs to the promoter group shall not be eligible to p...
17 Shareholder Approval
17.1 No ESPS shall be offered to employees of the company unless the shareholders of the company approve ESPS by passing special resolution in the meeting of ...
18 Pricing and Lock-in
18.1 The company shall have the freedom to determine price of shares to be issued under an ESPS, provided they conform to the provisions of clause 19.2. 18.2 ...
19 Disclosure and accounting policies
19.1 The Directors' Report or Annexure thereto shall contain,inter alia, the following disclosures:- (a) the details of the number of shares issued in ESPS; (...
20 Preferential Allotment
20.1 Nothing in these guidelines shall apply to shares issued to employees in compliance with the Securities and Exchange Board of India Guidelines on Prefere...
21 Part D of Clarification XIV of DIP Guidelines
21.1 Part D of Clarification XIV, dated March 1, 1996, of the SEBI (Disclosure and Investor Protection) Guidelines shall not be applicable in case of ESOS and...
22 Listing
22.1 In case of listed companies, the shares arising pursuant to an ESOS and shares issued under an ESPS, shall be eligible for listing in any recognized stoc...
23 Commencement of the Guidelines
23.1 These guidelines shall come into force w.e.f. 19th June, 1999....
Schedule I Accounting Policies For Esos
(Clause 13.1) (a) In respect of options granted during any accounting period, the accounting value of the options shall be treated as another form of employee...
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