Regulation 2 - Definitions. - Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

2. Definitions. (1) In these regulations, unless the context otherwise requires, the following words, expressions and derivations therefrom shall have the meanings assigned to them as under,- (a) Act means the Securities and Exchange Board of India Act, 1992 (15 of 1992) ; (b) appreciation means the difference between the market price of the share of a company on the date of exercise of SAR or the date of vesting of SAR, as the case may be, and the SAR price; (c) associate company shall have the same meaning as defined under section 2(6) of the Companies Act, 2013 (18 of 2013) ; (d) Board means the Securities and Exchange Board of India; (e) company shall have the same meaning as defined under section 2(20) of the Companies Act, 2013 (18 of 2013) ; (f) control shall have the same meaning as defined under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (g) director shall have the same meaning as defined under section 2(34) of the Companies Act, 2013 (18 of 2013); (h) emergency means a situation wherein the trust is in need of funds to meet the commitment(s) arising out of the objective(s) of the scheme; (i) employee , except in relation to issue of sweat equity shares, means, - (i) an employee as designated by the company, who is exclusively working in India or outside India; or (ii) a director of the company, whether a whole time director or not, including a non-executive director who is not a promoter or member of the promoter group, but excluding an independent director; or (iii) an employee as defined in sub-clauses (i) or (ii), of a group company including subsidiary or its associate company, in India or outside India, or of a holding company of the company, but does not include- (a) an employee who is a promoter or a person belonging to the promoter group; or (b) a director who, either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten per cent of the outstanding equity shares of the company; (j) employee stock option scheme or ESOS means a scheme under which a company grants employee stock options to employees directly or through a trust; (k) employee stock purchase scheme or ESPS means a scheme under which a company offers shares to employees, as part of public issue or otherwise, or through a trust where the trust may undertake secondary acquisition for the purposes of the scheme; (l) exercise means making of an application by an employee to the company or to the trust for issue of shares or appreciation in form of cash, as the case may be, against vested options or vested SARs in pursuance of the schemes covered under Part A or Part C of Chapter III of these regulations, as the case may be; (m) exercise period means the time period after vesting within which an employee can exercise his/her right to apply for shares against the vested option or appreciation against vested SAR in pursuance of the schemes covered under Part A or Part C of Chapter III of these regulations, as the case may be; (n) exercise price means the price, if any, payable by an employee for exercising the option or SAR granted to such an employee in pursuance of the schemes covered under Part A or Part C of Chapter III of these regulations, as the case may be; (o) general employee benefits scheme or GEBS means any scheme of a company framed in accordance with these regulations, dealing in shares of the company or the shares of its listed holding company, for the purpose of employee welfare including healthcare benefits, hospital care or benefits, or benefits in the event of sickness, accident, disability, death or scholarship funds, or such other benefit as specified by such company; (p) grant means the process by which the company issues options, SARs, shares or any other benefits under any of the schemes; (q) grant date means 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; (r) group means two or more companies which, directly or indirectly, are in a position to- (i) exercise twenty-six per cent. or more of the voting rights in the other company; or (ii) appoint more than fifty per cent. of the members of the Board of Directors in the other company; or (iii) control the management or affairs of the other company; (s) ICAI means the Institute of Chartered Accountants of India; (t) insider shall have the same meaning assigned to it under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; (u) independent director shall have the same meaning assigned to it under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; (v) initial public offer or IPO shall have the same meaning assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (w) key managerial personnel shall have the same meaning as defined under section 2(51) of the Companies Act, 2013 (18 of 2013) ; (x) market price means the latest available closing price on a recognised stock exchange on which the shares of the company are listed on the date immediately prior to the relevant date. Explanation,-If such shares are listed on more than one recognised stock exchange, then the closing price on the recognised stock exchange having higher trading volume shall be considered as the market price; (y) merchant banker means a merchant banker as defined under regulation 2(1)(cb) of the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992, which is registered under section 12 of the Act ; (z) option means the option given to an employee which gives such an employee a right to purchase or subscribe at a future date, the shares offered by the company, directly or indirectly, at a pre-determined price; (aa) option grantee means an employee having a right but not an obligation to exercise an option in pursuance of an ESOS; (bb) pre-IPO scheme means any scheme formulated prior to the initial public offer of the company and prior to the listing of its equity shares on a recognised stock exchange; (cc) promoter shall have the same meaning assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (dd) promoter group shall have the same meaning assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (ee) recognised stock exchange means a stock exchange which has been granted recognition under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (ff) registrar means a registrar to an issue as defined under regulation 2(f) of the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 and includes a share transfer agent as defined under regulation 2(g) thereof, which is registered under section 12 of the Act; (gg) relative shall have the same meaning as defined under section 2(77) of the Companies Act, 2013 (18 of 2013) ; (hh) relevant date means,- a. in the case of grant, the date of the meeting of the compensation committee on which the grant is made; or b. in the case of exercise, the date on which the notice of exercise is given to the company or to the trust by the employee; (ii) retirement benefit scheme or RBS means a scheme of a company framed in accordance with these regulations, dealing in shares of the company or the shares of its listed holding company, for providing retirement benefits to the employees subject to compliance with existing rules and regulations as applicable under laws relevant to retirement benefits in India; (jj) SAR grantee means an employee to whom a SAR is granted; (kk) SAR price means the base price defined on the grant date of SAR for the purpose of computing appreciation; (ll) scheme means a scheme of a company proposing to provide share based benefits to its employees under Chapters III of these regulations, which may be implemented and administered directly by such company or through a trust, in accordance with these regulations; (mm) securities means securities as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (nn) secondary acquisition means acquisition of existing shares of the company by the trust on the platform of a recognised stock exchange for cash consideration; (oo) secretarial auditor means a company secretary in practice appointed by a company under rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014 to conduct secretarial audit pursuant to regulation 24A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ; (pp) share means equity shares and securities convertible into equity shares and includes American Depository Receipts, Global Depository Receipts or other depository receipts representing underlying equity shares or securities convertible into equity shares; (qq) stock appreciation right or SAR means a right given to a SAR grantee entitling him to receive appreciation for a specified number of shares of the company where the settlement of such appreciation may be made by way of cash payment or shares of the company. Explanation 1, -A SAR settled by way of shares of the company shall be referred to as equity settled SAR. Explanation 2, -For the purpose of these regulations, any reference to stock appreciation right or SAR shall mean equity settled SARs and does not include any scheme which does not, directly or indirectly, involve dealing in or subscribing to or purchasing, securities of the company. (rr) stock appreciation right scheme or SAR scheme means a scheme under which a company grants SAR to employees; (ss) sweat equity shares means sweat equity shares as defined in sub-section (88) of section 2 of the Companies Act, 2013 (18 of 2013); (tt) Schedule means a schedule annexed to these regulations; (uu) trust means a trust established under the provisions of the Indian Trusts Act, 1882 (2 of 1882) including any statutory modification or re-enactment thereof, for implementing any of the schemes covered by these regulations; (vv) trustee means the trustee of the trust; (ww) valuer means an independent chartered accountant or a merchant banker appointed to determine the valuation of know-how or intellectual property rights or value addition; (xx) vesting means the process by which the employee becomes entitled to receive the benefit of a grant made to him/her under any of the schemes; (yy) vesting period means the period during which the vesting of option, SAR or a benefit granted under any of the schemes takes place; (2) Words and expressions used and not defined in these regulations but defined in the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Companies Act, 2013 (18 of 2013) and any statutory modification or re-enactment thereto, shall have the meanings respectively assigned to them in those legislations.