TMI BlogMinimum Provisions in Trust DeedX X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Trust deed shall provide that it would be the duty of the trustees to act in the interest of employees who are beneficiaries of the trust and subject to provisions of these regulations, it shall not act in any manner or include any provision in the trust deed that would be detrimental to the interests of the beneficiaries. 5. Such other clauses which are necessary for safeguarding the interests of the beneficiaries. Part B- Terms and Conditions of schemes to be formulated by the Compensation Committee [See regulation 5(3)] The Compensation Committee is required to formulate the detailed terms and conditions of the schemes which shall, inter alia, include the following provisions: a. the quantum of options, SARs, shares or benefits as the case may be, per employee and in aggregate under a scheme; b. the kind of benefits to be granted under a scheme covered by Part D and Part E of Chapter III of these regulations; c. the conditions under which options, SARs, shares or other benefits as the case may be, may vest in employees and may lapse in case of termination of employment for misconduct; d. the exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the notice and the resolution proposed to be passed for the schemes in general meeting shall, inter alia, contain the following information: a. brief description of the scheme(s); b. the total number of options, SARs, shares or benefits, as the case may be, to be offered and granted; c. identification of classes of employees entitled to participate and be beneficiaries in the scheme(s); d. requirements of vesting and period of vesting; e. maximum period (subject to regulation 18(1) and 24(1) of these regulations, as the case may be) within which the options / SARs / benefits shall be vested; f. exercise price, SAR price, purchase price or pricing formula; g. exercise period/offer period and process of exercise/acceptance of offer; h. the appraisal process for determining the eligibility of employees for the scheme(s); i. maximum number of options, SARs, shares, as the case may be, to be offered and issued per employee and in aggregate, if any; j. maximum quantum of benefits to be provided per employee under a scheme(s); k. whether the scheme(s) is to be implemented and administered directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded from the definition of employee under these regulations 9 Total number of shares reserved under the scheme, as applicable. 10 Number of shares entitled under the grant. 11 Total number of grants to be made. 12 Maximum number of shares, options, SARs or benefits to be granted per employee per grant and in aggregate. 13 Exercise price or pricing formula. 14 Whether any amount is payable at the time of grant? If so, quantum of such amount. 15 Lock-in period under the scheme. 16 Vesting period under the scheme. 17 Maximum period within which the grant shall be vested. 18 Exercise period under the scheme. 19 Whether employee can exercise all the options or SARs vested at one time? Yes/No 20 Whether employee can exercise vested options or SARs at various points of time within the exercise period? Yes/No 21 Whether scheme provides for the procedure for making a fair and reasonable adjustment to the number of options or SARs and to the exercise price in case of rights issues, bonus issues and other corporate actions? Clause in scheme describing such adjustment. 22 Description of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other relevant documents. Undertakings The undersigned company hereby undertakes: 1 To file, a post-effective amendment to this statement to include any material information with respect to the scheme of distribution not previously disclosed in the statement or any material change to such information in the statement. 2 To notify, the concerned recognised stock exchanges on which the shares of the company are listed, of each issue of shares pursuant to the exercise of options or SARs under the scheme mentioned in this statement, in the specified form, as amended from time to time. 3 That the company shall conform to the accounting policies specified in regulation 15 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, [2021] 4 That the scheme confirms to the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, [2021] 5 That the company has in place systems / codes / procedures to comply with the Securities and Exchange Board of India (Insider Trading) Regulations, 2015 or any modification or re- enactment thereto. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e(s) is / are in compliance with the regulations. Further, the following details, inter alia, shall be disclosed on the company's website and a web-link thereto shall be provided in the report of Board of Directors. A. Relevant disclosures in terms of the accounting standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 (18 of 2013) including the 'Guidance note on accounting for employee share-based payments' issued in that regard from time to time. B. Diluted EPS on issue of shares pursuant to all the schemes covered under the regulations shall be disclosed in accordance with 'Accounting Standard 20 - Earnings Per Share' issued by Central Government or any other relevant accounting standards as issued from time to time. C. Details related to ESOS (i) A description of each ESOS that existed at any time during the year, including the general terms and conditions of each ESOS, including - (a) Date of shareholders' approval (b) Total number of options approved under ESOS (c) Vesting requirements (d) Exercise price or pricing formula (e) Maxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year; and (c) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant. (vii) A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information: (a) the weighted-average values of share price, exercise price, expected volatility, expected option life, expected dividends, the risk-free interest rate and any other inputs to the model; (b) the method used and the assumptions made to incorporate the effects of expected early exercise; (c) how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and (d) whether and how any other features of the options granted were incorporated into the measurement of fair value, such as a market condition. Disclosures in respect of grants made in three years prior to IPO under each ESOS Until all options granted in the three years prior to the IPO have been exercised or have lapsed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intrinsic value of SAR, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of SAR, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. (v) SAR movement during the year (For each SAR scheme): Particulars Details Number of SARs outstanding at the beginning of the year Number of SARs granted during the year Number of SARs forfeited / lapsed during the year Number of SARs vested during the year Number of SARs exercised / settled during the year Number of SARs outstanding at the end of the year Number of SARs exercisable at the end of the year (vi) Employee-wise details (name of employee, designation, number of SAR granted during the year, exercise price) of SAR granted to - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he group has provided any security or guarantee 6. Any other contribution made to the Trust during the year (v) Brief details of transactions in shares by the Trust (a) Number of shares held at the beginning of the year; (b) Number of shares acquired during the year through (i) primary issuance (ii) secondary acquisition, also as a percentage of paid up equity capital as at the end of the previous financial year, along with information on weighted average cost of acquisition per share; (c) Number of shares transferred to the employees / sold along with the purpose thereof; (d) Number of shares held at the end of the year. (vi) In case of secondary acquisition of shares by the Trust Number of shares As a percentage of paid-up equity capital as at the end of the year immediately preceding the year in which shareholders' approval was obtained Held at the beginning of the year Acquired during the year Sold during the ..... 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