Section 12(1) in Companies (Share Capital and Debentures) Rules, 2014
(1)the issue of Employees Stock Option Scheme has been approved by the shareholders of the company by passing a special resolution.Explanation: For the purposes of clause (b) of sub-section (1) of section 62 and this rule "Employee" means(a)a permanent employee of the company who has been working in India or outside India; or(b)a director of the company, whether a whole time director or not but excluding an independent director; or(c)an employee as defined in clauses (a) or (b) of a subsidiary, in India or outside India, or of a holding company of the company [* * *] [Omitted "or of an associate company" by Notification No. 210(E), dated 18.3.2015 (w.e.f. 31.3.2014).] but does not include -(i)an employee who is a promoter or a person belonging to the promoter group; or(ii)a director who either himself or through his relative or through any body corporate, directly or indirectly, holds more than ten percent of the outstanding equity shares of the company.[Provided that in case of a startup company, as defined in notification number [G.S.R. 127(E), dated 19th February, 2019 issued by the Department for Promotion of Industry and Internal Trade] [Inserted by the Companies (Share Capital and Debentures) Third Amendment Rules, 2016, w.e.f. 19-7-2016.], Ministry of Commerce and Industry Government of India, the conditions mentioned in sub-clauses (i) and (ii) shall not apply up to [ten years] [Substituted 'five years' by Notification No. G.S.R. 574(E), dated 16.8.2019 (w.e.f. 31.3.2014).] from the date of its incorporation or registration.]
