Regulation 6 - Shareholders’ approval. - Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

6. Shareholders approval. (1) No scheme shall be offered to employees of a company unless the shareholders of the company approve it by passing a special resolution in the general meeting. (2) The explanatory statement to the notice and the resolution proposed to be passed by shareholders for the schemes shall contain the information as specified in Part C of Schedule I of these regulations or as otherwise specified by the Board. (3) Approval of shareholders by way of separate resolution in the general meeting shall be obtained by the company in case of: a. Secondary acquisition for implementation of the schemes. Explanation,-For the purpose of this clause, the approval shall mention the percentage of secondary acquisition (subject to limits specified under these regulations) that can be undertaken; b. Secondary acquisition by the trust in case the share capital expands due to capital expansion undertaken by the company including preferential allotment of shares or qualified institutions placement, to maintain the five per cent. cap specified under sub-regulation (11) of regulation 3 of these regulations, of such increased capital of the company; c. Grant of option, SAR, shares or other benefits, as the case may be, to employees of subsidiary or holding company; d. Grant of option, SAR, shares or benefits, as the case may be, to identified employees, during any one year, equal to or exceeding one per cent. of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant of option, SAR, shares or incentive, as the case may be.