SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

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 Committee shall be a Committee of the Board of Directors consisting of a majority of independent directors.

5.3 The Compensation Committee shall, inter alia , formulate the detailed terms and conditions of the ESOS including:-

(a) the quantum of option to be granted under an ESOS per employee and in aggregate;

(b) the conditions under which option vested in employees may lapse in case of termination of employment for misconduct;

(c) the exercise period within which the employee should exercise the option and that option would lapse on failure to exercise the option within the exercise period;

(d) the specified time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee;

(e) the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period;

(f) the procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of rights issues, bonus issues and other corporate actions;

(g) the grant, vest and exercise of option in case of employees who are on long leave; and

(h) the procedure for cashless exercise of options.

5.4 The Compensation Committee shall frame suitable policies and systems to ensure that there is no violation of:-

(a) Securities and Exchange Board of India (Insider Trading) Regulations,1992; and

(b) Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) regulations, 1995.

by an employee.