SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999
6. Shareholder approval
6.1 ESOS can be offered to employees of a company unless the shareholders of the company approve ESOS by passing a special resolution in the general meeting.
6.2 The explanatory statement to the notice and the resolution proposed to be passed in general meeting for ESOS shall, inter alia , contain the following information:
(a) the total number of options to be granted;
(b) identification of classes of employees entitled to participate in the ESOS;
(c) requirements of vesting and period of vesting;
(d) maximum period (subject to clause 9.1) within which the option shall be vested;
(e) exercise price or pricing formula;
(f) exercise period and process of exercise;
(g) the appraisal process for determining the eligibility of employees to the ESOS;
(h) maximum number of options to be issued per employee and in aggregate;
( i ) a statement to the effect that the company shall conform to the accounting policies specified in clause 13.1.
6.3 Approval of shareholders by way of separate resolution in the general meeting shall be obtained by the company in case of:
(a) grant of option to employees of subsidiary or holding company, and
(b) grant of option to identified employees, 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 of option.