Para 5 - Compensation Committee - SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

5. Compensation Committee: 1 [5.1 No ESOS shall be offered unless the disclosures, as specified in Schedule IV, are made by the company to the prospective option grantees and 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; [2] [(f) the procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of corporate actions such as rights issues, bonus issues ,merger, sale of division and others. In this regard following shall be taken into consideration by the compensation committee: (i) the number and the price of ESOS shall be adjusted in a manner such that total value of the ESOS remains the same after the corporate action (ii) for this purpose global best practices in this area including the procedures followed by the derivative markets in India and abroad shall be considered. (iii) the vesting period and the life of the options shall be left unaltered as far as possible to protect the rights of the option holders.] (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 any employee. ********** [1] Substituted vide circular no. SEBI/PMD/MBD/ESOP/2/2003/30/06 dated June 30, 2003, for all options granted on or after June 30, 2003. Prior to its substitution, clause 5.1 read as under: 5.1 No ESOS shall be offered unless the company constitutes a Compensation Committee for administration and superintendence of the ESOS. [2] Substituted vide circular no. SEBI/PMD/MBD/ESOP/2/2003/30/06 dated June 30, 2003, for all corporate actions on or after June 30, 2003. Prior to its substitution, sub-clause (f) read as under: (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;