SECURITIES AND EXCHANGE BOARD OF INDIA (EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUID… — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

SECURITIES AND EXCHANGE BOARD OF INDIA (EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME) GUIDELINES, 1999 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 These Guidelines may be called the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999. Definitions: 2.1 In these Guidelines, unless otherwise defined;- "employee" means (a) a permanent employee of the company working in India or out of India; or (b) a director of the company, whether a whole time director or not; or (c) an employee as defined in sub-clauses (a) or (b) of a subsidiary, in India or out of India, or of a holding company of the company. "employee compensation" means the total cost incurred by the company towards employee compensation including basic salary, dearness allowance, other allowances, bonus and commissions including the value of all perquisites provided, but does not include: (a) the fair value of the option granted under an Employee Stock Option Scheme; and (b) the discount at which shares are issued under an Employee Stock Purchase Scheme. [(2A)"employee stock option" means the option given to the whole-time Directors, Officers or employees of a company which gives such Directors, Officers or employees, the benefit or right to purchase or subscribe at a future date, the securities offered by the company at a predetermined price.] [1] Inserted vide circular no. SEBI/PMD/MBD/ESOP/2/2003/30/06 dated June 30, 2003, w. e. f. June 30, 2003. [(3) "employee stock option scheme (ESOS)" means a scheme under which a company grants employee stock option.] "employee stock purchase sc