A company has implemented Employee Stock Option Scheme to retain the best talent in the company. After one year of implementation of the scheme, the company desires to increase the vesting period from 2 year to 3 year. I

According to the Regulation 7 of the SEBI (Share Based Employee Benefits) Regulation, 2014 the company shall not vary the terms of the schemes in any manner which may be detrimental to the interests of the employees, provided that the company shall be entitled to vary the term of the schemes to meet any regulatory requirements. Subject to the above, the company may by special resolution in a general meeting vary the terms of the schemes offered pursuant to an earlier resolution of the general body but not yet exercised by the employee provided such variation is not prejudicial to the interests of the employees. The company desires to increase the vesting period from 2 years to 3 years. This will get shares after 3 years instead of earlier 2 years and it is prejudicial to the interests of the employees. Hence, the company cannot change the vesting period as per SEBI regulations.