Requirements specified under the SEBI (Share Based Employee Benefits) Regulations, 2014
Summary
This circular issues guidelines under the SEBI (Share Based Employee Benefits) Regulations, 2014, to be implemented by recognized stock exchanges. It mandates that listed companies ensure compliance with specific requirements regarding trust deeds, scheme terms, and shareholder disclosures. The annexure details the mandatory contents for trust deeds, compensation committee formulations, explanatory statements, and filings with stock exchanges. This section outlines specific disclosure requirements for employee share-based benefit schemes, including termination conditions and shareholder approvals. It mandates the filing of various documents such as the scheme copy, AGM notices, and auditor certificates with the registration statement. Additionally, it details undertakings by the company regarding post-effective amendments, stock exchange notifications, and regulatory compliance. This section mandates detailed disclosures for Employee Stock Option Schemes (ESOS), Employee Share Purchase Schemes (ESPS), and Stock Appreciation Rights (SAR). It requires specific data regarding scheme terms, allotment details, valuation methods, and employee-wise grants. Additionally, it outlines risk f
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Necessary guidelines are being issued in the Annexure to this circular as per the SEBI (Share Based Employee Benefits) Regulations, 2014.
The stock exchanges are advised to bring the contents of this circular to the notice of the companies listed on them and ensure its compliance.
This circular is being issued in exercise of the powers under regulation 28 of the Regulations and section 11 read with section 11A of the Securities and Exchange Board of India Act, 1992.
The trust deed shall, inter alia, cover details of the trust, powers and duties of trustee(s), provisions on dissolution, duty to act in interest of employees, and other clauses safeguarding beneficiaries' interests.
The Compensation Committee is required to formulate detailed terms and conditions including quantum, kind of benefits, vesting/lapse conditions, exercise periods, adjustments for corporate actions, long leave provisions, and cashless exercise procedures.
The explanatory statement to the notice and resolution for shareholders meeting shall contain brief description, total number of benefits, eligibility classes, vesting/exercise details, pricing, appraisal process, loan details, accounting policies, valuation method, and intrinsic value disclosure if applicable.
The statement filed with Stock Exchange(s) must include authorized/issued share capital, dates of institution/approval, validity period, kind of benefit, eligible classes, total shares reserved/granted, maximum grants per employee, exercise price, lock-in/vesting/exercise periods, adjustment procedures, and appraisal process description.
The specified time period within which vested options or SARs are to be exercised in the event of termination or resignation of an employee.
The specified time period within which options or SARs to be exercised in the event of death of the employee.
Whether scheme provides for conditions under which options, SARs, or benefits vested in employees may lapse in case of termination of employment for misconduct? Clause in Scheme describing such adjustment.
Whether scheme provides for conditions for the grant, vesting and exercise of options, SARs or benefits in case of employees who are on long leave? Clause in scheme describing such adjustment.
Whether amount paid/payable by the employee at the time of the grant of the options, SARs or benefits will be forfeited if the employee does not exercise the same within the exercise period? Clause in scheme describing such adjustment.
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Source: SecMarx — Requirements specified under the SEBI (Share Based Employee Benefits) Regulations, 2014. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.