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SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

SEBI (Share Based Employee Benefits) Regulations, 2014

2(1)(i)

The definition of employee covers persons who are designated as employees by the Company (i.e. permanent as well as non-permanent employees) as against only permanent employees under the SBEB regulations.

The definition of employees covers a permanent employee of the company who has been working in India or outside India;

2(1)(q)

Grant date for the purpose of Accounting

“Grant Date: mean the date on which the compensation committee approves the grant.

Explanation – For accounting purposes, the grant date will be determined in accordance with applicable accounting standards.

“grant date” means the date on which the compensation committee approves the grant;

3(1)

Implementation of the Scheme through Trust

A company may change its mode of implementation of scheme only if prior approval of shareholders is obtained by way of a special resolution and such change is not prejudicial to the interests of the employees.

Earlier No such Provisions

3(12)

Appropriation of shares by the Trust

Appropriation of shares by any trust shall not be extended beyond end of subsequent financial year or second subsequent financial year. However, for extension beyond second subsequent financial year, prior approval of compensation committee or nomination and remuneration committee as the case may be is to be obtained

Earlier No such Provisions

5(2) Compensation Committee

The compensation committee shall be a committee of such members of the Board of Directors of the company as provided under regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as Amended from time to time. Provided that a company may also opt to designate its nomination and remuneration committee as the compensation committee for the purposes of these regulations.

The compensation committee shall be a committee of such members of the board of directors of the company as provided under section 178 of the Companies Act, 2013, as amended or modified from time to time.

7 Variation in the terms of the Scheme

Any variation to the terms of the Scheme shall only be made if prior approval of Shareholders by way of special resolution is passed and such terms are not prejudicial to the interest of the employees. Any change to fulfil the regulatory requirement can be made without obtaining prior approval of shareholders.

Earlier company shall be entitled to vary the terms of the schemes to meet any regulatory requirement without seeking shareholders’ approval by special resolution.

8 Utilization of Fund/ Shares held by Trust in case of Winding Up of the Scheme

Utilization of Fund/ Shares held by Trust in case of Winding Up of the Scheme subject to approval of the shareholders, be transferred to another scheme under these regulations, as recommended by the compensation committee.

Earlier  Utilization of Fund/ Shares held by Trust in case of Winding Up of the Scheme as recommended by the compensation committee

9(4) Applicability  of Minimum Vesting     Period in case  of Death/ Permanent  Incapacity

In the event of death of the employee while in employment, all the options, SAR or any other benefit granted under a scheme to him/her till his/her death shall vest, with effect from the date of his/her death, in the legal heirs or nominees of the deceased employee, as the case may be

In the event of death of the employee while in employment, all the options, SAR or any other benefit granted to him  under a scheme till such date shall vest in the legal heirs or nominees of the deceased employee

9(6) Vesting in case of superannuation/ layoff

The cessation of employment due to retirement or superannuation shall not be covered by this sub-regulation, and such options, SAR or any other benefit granted to an employee would continue to vest in accordance with the respective vesting schedules even after retirement or superannuation in accordance with the company’s policies and the applicable law.

Earlier no such provision

12 (3) In-principle  approval from  the Stock Exchange

In-principle approval for listing of shares issued pursuant to ESOS, ESPS or SAR shall be obtained prior to the grant of options or SARs.

Earlier for listing of shares Issued pursuant to ESOS, ESPS or SAR, the company shall obtain the in-principle approval of the stock exchanges where it proposes to list the said shares.

13 Certificate from Auditor

In the case of every company which has passed a resolution for the scheme(s) under these regulations, the Board of  Directors shall at each annual general meeting place before the shareholders a certificate from the secretarial  auditors of the company that the scheme(s) has been implemented in accordance with these regulations and  in accordance with the resolution of the company in the general meeting.

In the case of every company which has passed a resolution for the scheme(s) under these regulations, the Board of  Directors shall at each annual general meeting place before the shareholders a certificate from the auditors of the company that the scheme(s) has been implemented in accordance with these regulations and  in accordance with the resolution of the company in the general meeting.

14 Disclosures by the Board of Directors

In addition to the information that a company is required to disclose in relation to employee benefits under  the Companies Act, 2013 (18 of 2013), the Board of Directors of such a company shall also disclose the details  of the scheme(s) being implemented, as specified in Part F of Schedule – I of  These regulations.

In addition to the information that a company is required to disclose in relation to employee benefits under  the Companies Act, 2013 (18 of 2013), the Board of Directors of such a company shall also disclose the details  of the scheme(s) being implemented, as specified by SEBI in this regard.

Part A

Provisions to be included in the trust deed

Part B

Provisions for formulation of detailed terms and conditions of the scheme.

This shall also include the procedure for buy-back of specified securities issued under these regulations by the Company and such applicable terms and conditions relating to the buy-back of such specified securities.

Part F

Details of scheme being implemented to be disclosed by the Board of Directors

Any Company

Not more than 15% of its existing paid-up equity share capital in a year.

Provided issuance of such shares shall not exceed 25% of the paid-up equity share capital at any time.

Company listed on Innovators Growth Platform (IGP)

Not more than 15% of its existing paid-up equity share capital in a financial year.

Provided issuance of such shares shall not exceed 50% of the paid-up equity share capital up to ten years from date of its incorporation or registration.