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IntroductionIt is a well-known fact that the combination of ownership and participative work force is a powerful competitive tool that works mostly in favour of the organizations. It can also be said with certainty that when ownership and participative employment are combined, substantial gains result. The possible way to achieve this is by granting of ESOPs and Sweat Equity.ESOPs, “Employees Stock Ownership Plans” or "Employees Stock Options Plans" is the generic term for a set of instruments and incentive schemes provided to the employees of a company to motivate, reward, remunerate and to retain them. These are rather modern way of motivating employees as against the age-old method of compensating the employees with salaries alone. It is now an accepted practice for large entities to remunerate their employees, apart from salary, by the way of granting options to the employees to acquire the shares, hence a portion of the ownership, of the company for which they work. This is believed to motivate employees as they can closely relate their success with the success of the entity for which they work.The employee stock option scheme (ESOS) concept was developed in the 1950s by lawyer and investment banker Louis Kelso, who argued that the capitalist system would be stronger if all workers, not just a few stockholders, could share in owning capital-producing assets. In today’s world, the human capital is unarguably one of the most important resources to run any enterprise. Companies use untraditional methods of remunerating employees to retain their employees and attract new employees to their organization. Therefore, scheme like ESOS, ESPS and sweat equity has gained popularity in recent times.Sweat EquitySweat Equity Shares mean those shares which are issued by the company to its directors and/or employees at a discount or for consideration other than cash for providing know how or making available the rights in the nature of intellectual property rights or value additions. In other words, it refers to equity shares given to the company's employees on favourable terms, in recognition of their work. The issue of sweat equity allows the company to retain the employees by rewarding them for their services.Sweat equity rewards the beneficiaries by giving them incentives in lieu of their contribution towards the development of the company. Further, it enables greater employee stake and interest in the growth of an organization as it encourages the employees to contribute more towards the company in which they feel they have a stake.There are certain significant differences between ESOP and Sweat Equity, which are mentioned below;-Sweat Equity is grant of shares at discount or without monetary considerations whereas ESOP/ESOS is grant of option to purchase share at predetermined price given to employees,-Sweat Equity can be issued to the promoters of the Company whereas ESOS/ESOP cannot be issued to the promoters or promoter group, and-Minimum lock in period of 3 years for Sweat Equity whereas no such lock in period for ESOP and lock in period of 1 year for ESPS.A.Legal framework for Sweat Equity and Applicable LawsThe government of India has time to time to enacted and published rules and laws governing the sweat equity schemes, issuance and regulations at large. The current opinion is based on the following provisions of law which are in vogue currently;A1. Companies Act, 2013Earlier the issue of sweat equity shares for a private company used to be regulated by Section 79A of Companies Act, 1956. Now the same is regulated by Section 54 and Chapter 4 under Companies Act, 2013.As per the provision, “Sweat equity shares” means such equity shares, which are issued by a Company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called.Sec 54. Issue of Sweat Equity Shares(1) Notwithstanding anything contained in section 53, a company may issue sweat equity shares of a class of shares already issued, if the following conditions are fulfilled, namely: —(a) the issue is authorised by a special resolution passed by the company;(b) the resolution specifies the number of shares, the current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued;(c) not less than one year has, at the date of such issue, elapsed since the date on which the company had commenced business; and](d) where the equity shares of the company are listed on a recognised stock exchange, the sweat equity shares are issued in accordance with the regulations made by the Securities and Exchange Board in this behalf and if they are not so listed, the sweat equity shares are issued in accordance with such rules as may be prescribed.(2) The rights, limitations, restrictions and provisions as are for the time being applicable to equity shares shall be applicable to the sweat equity shares issued under this section and the holders of such shares shall rank paripassu with other equity shareholders.Vidhikarya Comment: The COMPANY has to follow and comply with all the current provisions and regulation. To make it easier for COMPANY, the all the compliances are put in tabular format. This will make it easier for the reader to understand and comply with the regulations related to issuance of sweat equity.Compliance table ASl No.Compliance to Rules & RegulationsCOMPANY Compliance (Yes/No/NA)Remarks1Special resolution passed by the Company (COMPANY)NoTo be passed2The resolution mentions number of shares, current market price, consideration, class of directors or employees.NoTo be passed3One year has passed since commencement of businessNo4Compliance with SEBINot Applicable to COMPANYNot listed with Stock exchangeA2. Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003Sec 4. Special resolution(1) For the purpose of passing a special resolution under clause (a) of sub-section (1) of section 79A of the Companies Act, 1956 (1 of 1956), the explanatory statement to be annexed to the notice for the general meeting pursuant to section 173 of the said Act shall contain particulars as specified below.(i) the date of the meeting at which the proposal for issue of sweat equity shares was approved by the Board of Directors of the company;(ii) the reasons/justification for the issue;(iii) the number of shares, consideration for such shares and the class or classes of persons to whom such equity shares are to be issued;(iv) the value of the sweat equity shares along with valuation report/ basis of valuation and the price at the which the sweat equity shares will be issued;(v) the names of persons to whom the equity will be issued and the person's relationship with the company;(vi) ceiling on managerial remuneration, if any, which will be affected by issuance of such equity;(vii) a statement to the effect that the company shall conform to the accounting policies specified by the Central Government; and(viii) diluted earning per share pursuant to the issue of securities to be calculated in accordance with the Accounting Standards specified by the Institute of Chartered Accountants of India.(2) Approval of shareholders by way of separate resolution in the general meeting shall be obtained by the company in case of grant of shares to identified employees and promoters, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversion) of the company at the time of grant of the sweat equity shares.Sec 5. Register of sharesThe company shall maintain a Register of Sweat Equity Shares issued under section 79A in the Form specified in Schedule annexed to these rules.Sec 6. Restriction on issue of sweat equity sharesThe company shall not issue sweat equity shares for more than 15% of total paid up equity share capital in a year or shares of the value of 5 crores of rupees, whichever is higher except with the prior approval of the Central Government.Sec 7. Disclosure in the Directors' ReportThe Board of Directors, shall, inter alia, disclose either in the Directors' Report or in the annexure to the Director's Report, the following details of issue of sweat equity shares: -(a Number of shares to be issued to the employees or the directors;(b) conditions for issue of sweat equity shares;(c) the pricing formula;(d) the total number of shares arising as a result of issue of sweat equity shares;(e) money realised or benefit accrued to the company from the issue of sweat equity shares;(f) diluted Earnings Per Share (EPS) pursuant to issuance of sweat equity shares.Sec 8. Pricing of Sweat Equity Shares. -The price of sweat equity shares to be issued to employees and directors shall be at a fair price calculated by an independent valuer.Sec 9. Issue of Sweat Equity Shares for consideration other than cash. -Where a company proposes to issue sweat equity shares for consideration other than cash, it shall comply with following:(a) The valuation of the intellectual property or of the know-how provided or other value addition to consideration at which sweat equity capital is issued, shall be carried out by a valuer;(b) the valuer shall consult such experts, as he may deem fit, having regard to the nature of the industry and the nature of the property or the value addition;(c) the valuer shall submit a valuation report to the company giving justification for the valuation;(d) a copy of the valuation report of the valuer shall be sent to the shareholders with the notice of the general meeting;(e) the company shall give justification for issue of sweat equity shares for consideration other than cash, which shall form part of the notice sent for the general meeting; and(f) the amount of Sweat Equity shares issued shall be treated as part of managerial remuneration for the purposes of sections 198, 309, 310, 311 and 387 of the Companies Act, 1956 if the following conditions are fulfilled:(i) the Sweat Equity shares are issued to any director or manager; and,(ii) they are issued for non-cash consideration, which does not take the form of an asset which can be carried to the balance sheet of the company in accordance with the relevant accounting standards.Sec 10. Lock-in of sweat equity shares. -Sweat equity shares issued to employees or directors shall be locked in for a period of three years from the date of allotment.Sec 12. Accounting policies. -(1) Where the sweat equity shares are issued for a non-cash consideration, such non-cash consideration shall be treated in the following manner in the books of account of the company:(a) where the non-cash consideration takes the form of a depreciable or amortizable asset, it shall be carried to the balance sheet of the company in accordance with the relevant accounting standards; or(b) where clause (a) is not applicable, it shall be expensed as provided in the relevant accounting standards.(2) In respect of sweat equity shares issued during accounting period, the accounting value of sweat equity shares shall be treated as another form of compensation to the employee or the director in the financial statement of the company.Vidhikarya Comment: As per our understanding of the laws and current situation prevalent with COMPANY there are no problems with any of the regulations under the above laws. The querist has to ensure that while issuing the sweat equity all the following regulations (Table B) and procedures under the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003, are followed and complied with.Compliance Table BSl No.Compliance to Rules & RegulationsCOMPANY Compliance (Yes/No)Remarks1Special Resolution containing the following;a. Date of meeting on sweat equity issue was approved by the Board of DirectorsNoTo be Compliedb. The reason and justification for sweat equity issueNoTo be Compliedc. Number of shares, consideration, and class of personNoTo be Compliedd. Value of the equity with valuation report and the priceNoTo be Compliede. Name of the person and relationship with CompanyNoTo be Compliedf. Ceiling on managerial remuneration, if any, which will be affected by issuanceNoTo be Compliedg. Statement that COMPANY will conform to the accounting principlesNoTo be Compliedh. Diluted earnings per share pursuant to issuanceNoTo be Complied2Approval of Shareholder by separate resolution in case the grant of shares equal or exceeds 1% of the issued capital of COMPANY at the time of grant.No/NANA as it may not be applicable3Maintain a register as per Sec 79ANoTo be Complied4COMPANY will not issue more than 15% of total paid up equity or in a year or shares of the value of Rupees 5 crore whichever is higher.NoTo be Complied5Following disclosers in the Director’s reportNoTo be Complieda. Number of shares to be issuedNoTo be Compliedb. Condition for issue of equityNoTo be Compliedc. The pricing formulaNoTo be Compliedd. Total number of shares arising as a result of issue of sweat equityNoTo be Compliede. Money realized or benefit accrued to COMPANY from the issue of sweat equityNoTo be Compliedf. Diluted Earnings Per Share pursuant to issuance of sweat equityNoTo be Complied6Pricing of sweat equity should be fair price calculated by independent valuerNoTo be Complied7Following to follow if consideration is other than cash;a. Valuation of intellectual property or of the know-howNoTo be Compliedb. Valuer needs to submit the justification of the valueNoTo be Compliedc. A copy of valuation repost to be sent to the shareholders with notice for general meetingNoTo be Compliedd. Justification for issue of sweat equity for consideration other than cash has to be sent with the notice for general meeting.NoTo be Compliede. The amount of sweat equity issued will form part of the managerial remuneration (under the provisions of Companies Act, 2013) if;i. Sweat equity shares are issue to Directors or Managers, and ,ii. They are issued for non-cash consideration which does not form part of an asset shown in balance sheet.NoTo be Complied8Sweat equity shares will be locked in for a period of three years from the date of allotmentNoTo be Complied9Following to be complied for Accounting Policies;a. Where the non-cash consideration takes the form of a depreciable or amortizable asset, it shall be carried to the balance sheet of the companyNo/NATo be confirmedb. Is above is not applicable then it will be expenses as per the accounting standardsNo/NATo be confirmedc. Accounting value of the sweat equity will be treated as another form of compensation to the employee or the director.NoTo be CompliedA3. Companies (Share Capital and Debentures) Rules, 2014.Sec 8. Issue of sweat equity shares. -(1) A company other than a listed company, which is not required to comply with the Securities and Exchange Board of India Regulations on sweat equity, shall not issue sweat equity shares to its directors or employees at a discount or for consideration other than cash, for their providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called, unless the issue is authorised by a special resolution passed by the company in general meeting.Explanation. - For the purposes of this rule-(i) the expressions ‘‘Employee’’ means-(a) a permanent employee of the company who has been working in India or outside India, for at least last one year; or(b) a director of the company, whether a whole-time director or not; or(c) an employee or a director as defined in sub-clauses (a) or (b) above of a subsidiary, in India or outside India, or of a holding company of the company;(ii) the expression ‘Value additions’ means actual or anticipated economic benefits derived or to be derived by the company from an expert or a professional for providing know-how or making available rights in the nature of intellectual property rights, by such person to whom sweat equity is being issued for which the consideration is not paid or included in the normal remuneration payable under the contract of employment, in the case of an employee.(2) The explanatory statement to be annexed to the notice of the general meeting pursuant to section 102 shall contain the following particulars, namely: -(a) the date of the Board meeting at which the proposal for issue of sweat equity shares was approved;(b) the reasons or justification for the issue;(c) the class of shares under which sweat equity shares are intended to be issued;(d) the total number of shares to be issued as sweat equity;(e) the class or classes of directors or employees to whom such equity shares are to be issued;(f) the principal terms and conditions on which sweat equity shares are to be issued, including basis of valuation;(g) the time period of association of such person with the company;(h) the names of the directors or employees to whom the sweat equity shares will be issued and their relationship with the promoter or/and Key Managerial Personnel;(i) the price at which the sweat equity shares are proposed to be issued;(j) the consideration including consideration other than cash, if any to be received for the sweat equity;(k) the ceiling on managerial remuneration, if any, be breached by issuance of such sweat equity and how it is proposed to be dealt with;(l) a statement to the effect that the company shall conform to the applicable accounting standards; and(m) diluted Earning Per Share pursuant to the issue of sweat equity shares , calculated in accordance with the applicable accounting standards.(3) The special resolution authorising the issue of sweat equity shares shall be valid for making the allotment within a period of not more than twelve months from the date of passing of the special resolution.(4) The company shall not issue sweat equity shares for more than fifteen percent of the existing paid up equity share capital in a year or shares of the issue value of rupees five crores, whichever is higher: Provided that the issuance of sweat equity shares in the Company shall not exceed twenty five percent, of the paid-up equity capital of the Company at any time.(5) The sweat equity shares issued to directors or employees shall be locked in/non transferable for a period of three years from the date of allotment and the fact that the share certificates are under lock-in and the period of expiry of lock in shall be stamped in bold or mentioned in any other prominent manner on the share certificate.(6) The sweat equity shares to be issued shall be valued at a price determined by a registered valuer as the fair price giving justification for such valuation.(7) The valuation of intellectual property rights or of know how or value additions for which sweat equity shares are to be issued, shall be carried out by a registered valuer, who shall provide a proper report addressed to the Board of directors with justification for such valuation.(8) A copy of gist along with critical elements of the valuation report obtained under clause (6) and clause (7) shall be sent to the shareholders with the notice of the general meeting.(9) Where sweat equity shares are issued for a non-cash consideration on the basis of a valuation report in respect thereof obtained from the registered valuer, such non-cash consideration shall be treated in the following manner in the books of account of the company-(a) where the non-cash consideration takes the form of a depreciable or amortizable asset, it shall be carried to the balance sheet of the company in accordance with the accounting standards; or(b) where clause (a) is not applicable, it shall be expensed as provided in the accounting standards.(10) The amount of sweat equity shares issued shall be treated as part of managerial remuneration for the purposes of sections 197 and 198 of the Act, if the following conditions are fulfilled, namely. -(a) the sweat equity shares are issued to any director or manager; and(b) they are issued for consideration other than cash, which does not take the form of an asset which can be carried to the balance sheet of the company in accordance with the applicable accounting standards.(11) In respect of sweat equity shares issued during an accounting period, the accounting value of sweat equity shares shall be treated as a form of compensation to the employee or the director in the financial statements of the company, if the sweat equity shares are not issued pursuant to acquisition of an asset.(12) If the shares are issued pursuant to acquisition of an asset, the value of the asset, as determined by the valuation report, shall be carried in the balance sheet as per the Accounting Standards and such amount of the accounting value of the sweat equity shares that is in excess of the value of the asset acquired, as per the valuation report, shall be treated as a form of compensation to the employee or the director in the financial statements of the company.Explanation.- For the purposes of this sub-rule, it is hereby clarified that the Accounting value shall be the fair value of the sweat equity shares as determined by a registered valuer under sub-rule (6)(13) The Board of Directors shall, inter alia, disclose in the Directors’ Report for the year in which such shares are issued, the following details of issue of sweat equity shares namely:-(a) the class of director or employee to whom sweat equity shares were issued;(b) the class of shares issued as Sweat Equity Shares;(c) the number of sweat equity shares issued to the directors, key managerial personnel or other employees showing separately the number of such shares issued to them, if any, for consideration other than cash and the individual names of allottees holding one percent or more of the issued share capital;(d) the reasons or justification for the issue;(e) the principal terms and conditions for issue of sweat equity shares, including pricing formula;(f) the total number of shares arising as a result of issue of sweat equity shares;(g) the percentage of the sweat equity shares of the total post issued and paid up share capital;(h) the consideration (including consideration other than cash) received or benefit accrued to the company from the issue of sweat equity shares;(i) the diluted Earnings Per Share (EPS) pursuant to issuance of sweat equity shares.(14) (a) The company shall maintain a Register of Sweat Equity Shares in Form No. SH.3 and shall forthwith enter therein the particulars of Sweat Equity Shares issued under section 54.(b) The Register of Sweat Equity Shares shall be maintained at the registered office of the company or such other place as the Board may decide.(c) The entries in the register shall be authenticated by the Company Secretary of the company or by any other person authorized by the Board for the purpose.Vidhikarya Comment: Companies (Share Capital and Debentures) Rules, 2014 reiterates the provisions of the Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003. This is to reemphasize the legal provisions of related to issuance of sweat equity. Most of the regulations are repeated to bring in the scrutinizing effect of the law while a company is proposing to issue sweat equity. Section 8 of the Companies (Share Capital and Debentures) Rules, 2014 elaborates on certain additional points which are produced in he below compliance table C. There are certain additional provisions in the Companies(Share Capital and Debentures) Rules, 2014, which are highlighted and underlined in the above sections.COMPANY has to ensure that they comply with all the provisions as mentioned in the below table C.Compliance Table CSl No.Compliance to Rules & RegulationsCOMPANY Compliance (Yes/No)Remarks1The notice for general meeting should contain the principal terms and conditions on which sweat equity shares are to be issued, including basis of valuationNoTo be Complied2The notice for general meeting should contain the time period of association of such person with the companyNoTo be Complied3The issuance of sweat equity shares in the Company shall not exceed twenty five percent, of the paid-up equity capital of the Company at any timeNoTo be Complied4The company shall maintain a Register of Sweat Equity Shares in Form No. SH.3NoTo be done post issuance5The entries in the register shall be authenticated by the Company Secretary of the companyNoTo be done post issuanceB.Tax Implications for sweat equity allotment.B1. Income Tax Act, 1961Sec 17(2)(vi) of Income-tax Act, 1961For the purposes of sections 15 and 16 and of this section, —(2)"perquisite" 11a includes—[(vi)the value of any specified security or sweat equity shares allotted or transferred, directly or indirectly, by the employer, or former employer, free of cost or at concessional rate to the assessee.Explanation. —For the purposes of this sub-clause, —(a)"specified security" means the securities as defined in clause (h) of section 25 of the Securities Contracts (Regulation) Act, 1956 42 of 1956) and, where employees' stock option has been granted under any plan or scheme therefor, includes the securities offered under such plan or scheme;(b) "sweat equity shares" means equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called;(c) the value of any specified security or sweat equity shares shall be the fair market value of the specified security or sweat equity shares, as the case may be, on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from, the assessee in respect of such security or shares;(d)"fair market value” means the value determined in accordance with the method as may be prescribed;(e) "option” means a right but not an obligation granted to an employee to apply for the specified security or sweat equity shares at a predetermined price;Vidhikarya Comment: If above conditions are satisfied, perquisite will be taxable in the hands of employees in the assessment year relevant to previous year in which shares or securities are allotted or transferred to the employee.The valuation for Securities needs to be done on Fair Market Value of securities at the date of exercise of option by the employee.B2. Valuation of specified securities or sweat equity sharesQUOTED SHARES; If the shares of the company are listed on any Stock Exchange, then the Fair Market Value will be average of opening price and closing price of the share on that date. If shares of the company are listed on more than one Stock Exchanges, then the Fair Market Value will be average of Opening Price and Closing Price of shares on that Stock Exchange on which records highest volume of trading of shares of the Company. Where at the date of exercise of option, there is no trading of shares on any Stock Exchange, then the Fair Market Value will be the closing price of the shares on any Stock Exchange on a date closest to the date of exercise of option and immediately preceding such date.UNQUOTED SHARES; if the shares of Company is not listed on any Stock Exchange then the Fair Market Value of Shares will be as determined by the Merchant Bankers on the Specified Date.“Specified Date”; means the date of exercise of the option, or any date earlier the date of exercise of the option, not being a date, which is more than 180 days earlier than the date of exercise of the option.Sweat Equity shares as per the Income Tax Act, 1961 has 2 aspects.-Salaries.-Capital Gains.Salaries:Whenever an employee receives a sweat equity shares, the value of such shares will be taxable as a perquisite under the head Salaries as per section 17 of Income Tax Act, 1961.The value of taxable perquisite in case of shares allotted to the employee is equal to the fair market value (FMV) of the shares as on the date of which the option is exercised as reduced by the amount actually paid or recovered from each employee. It may be noted that FMV as on the date of exercise of the option is relevant.FMV shall be the average of opening price and closing price of the share on the recognized stock exchange which records the higher volume of trading in the share.Capital Gains:Whenever the Sweat Equity Shares are transferred it is subject to Capital Gains Tax. In this regard, the aspects to be noted are “Period of Holding” & “Cost of Acquisition”.Period of Holding: It shall be reckoned from the date of allotment or transfer of such equity shares.Cost of Acquisition: It shall be the FMV value as computed for the determining the perquisite as mentioned above (Salaries).Points to be noted:If such shares are transferred within a period of 12 months from the date of allotment, then such gains will be treated as Short term Capital GainsIf such shares are transferred after holding for a period of 12 months then such gains will be treated as Long term Capital Gains (LTCG).(However the Equity Shares are listed and chargeable to securities transaction tax, it is exempt from LTCG.)B3. Stamp Duty ApplicableAs per Section 3 of Indian Stamps Act 1899, Every Share Certificate must bear the necessary stamp duty as per the Stamp Act of the respective State/ Union Territory from which Certificate is issued. The rates of stamp duty can be obtained with reference to relevant article of given State Act.For this transaction where the sweat equities are getting allotted and subsequently transferred, The West Bengal Stamp Rules, 1994 will be applicable and relevant stamp duty will have to be paid as per this rule.The rate for application of stamp duty is as follow;Sl No.No. and Name of ArticleRate of Stamp Duty123 Conveyance23A Conveyance, in respect of amalgamation, merger, reconstruction, or demerger, of companies, other than amalgamation, merger, reconstruction or demerger, of two banking companies or a banking company with a non-banking financial company, executed on the basis of decree or final order of any Civil Court or every order made by the Tribunal under section 394 of the Companies Act, 1956, as defined by section 2(10), not being a transfer charged or exempted under No. 62, on the market value of the property which is the subject¬ matter of the conveyance, when the property of the transferor company located in the State of West Bengal is transferred to the transferee company by way of such amalgamation, merger, reconstruction, or demerger or companies under the decree of final order of any Civil Court or every order of the Tribunal under section 394 of the Companies Act, 1956:Provided that on and after the constitution of the National Company Law Tribunal, the expression ’High Court’ shall be read as ’Tribunal’.5% on market value in Panchayet Area6% on market value in Municipal Areas, Corporation Areas and notified area other than those included in 23(a) and specified mouzas or blocks of South 24 Parganas and North 24 Parganas which are distributed over three action areas of New Town Kolkata Development Authority and divided into a number of blocks.1% Additional Stamp Duty in both urban and rural areas, if the market value exceeds 40 lakh w.e.f. 02.03.2015.The same duty as a Conveyance (No. 23) on the aggregate of the market value of the shares issued or allotted, in exchange or otherwise, and the amount of consideration paid-(a) by the transferee company, for such amalgamation or merger:Provided that the amount of such duty chargeable under this article shall not exceed:(i) an amount equal to two per centum of the true market value of the immovable property located within the State of West Bengal of the transferor company, or(ii) an amount equal to half per centum of the aggregate of the market value of the shares issued or allotted, in exchange or otherwise, and the amount of consideration paid by such transferor company, for such amalgamation, whichever is higher;Vidhikarya Comment: Applicable stamp duty will be 7% of the total allotted share value and is to be paid by the transferee meaning, the employee/director to whom the shares are allotted.C.Legal Procedure for issue of sweat equityThe allotment and issue of sweat equity when done under the purview of the applicable laws and regulations must be followed by the procedure as laid down in different statutes. All the procedures are to be followed in word and spirit. Following (Table D) are the list of procedures that COMPANY must follow in order to ensure that issuance of Sweat Equities is as per the applicable rules, laws and regulations prevalent in the country. The Issuing company can take the help of a Company Secretary to get all the following compliances complied with.Compliance Table DSl No.Compliance to Rules & RegulationsCOMPANY Compliance (Yes/No)Remarks1Check the eligibility for issue of sweat equity shares based on the conditions stipulated above and obtain valuation report from a registered valuer.NoTo be Complied2Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013 (not less than 7 days in writing) for convening a meeting of the Board of Directors.NoTo be Complied3Hold and convene Board Meeting for the following purpose:a. To decide the terms of issue.NoTo be Compliedb. To fix date, time and venue for holding Extra-Ordinary General Meeting (EGM) to pass special resolution for approval of issue of sweat equity shares.NoTo be Compliedc. To approve notice of EGM.NoTo be Compliedd. To authorize any Director or Secretary to issue notice of EGM.NoTo be Complied4The explanatory statement should contain the following mandatory details.a. the date of the Board meeting at which the proposal for issue of sweat equity shares was approved;NoTo be Compliedb. the reasons/justification for the issue;NoTo be Compliedc. the class of shares under which sweat equity shares are intended to be issued;NoTo be Compliedd. the total number of shares to be issued as sweat equity;NoTo be Compliedf. the class or classes of directors or employees to whom such equity shares are to be issued;NoTo be Compliedg. Principal terms and conditions on which sweat equity shares are to be issued, including basis of valuation;NoTo be Compliedh. Time period of association of such person with the company;NoTo be Compliedi. the names of the directors or employees to whom the sweat equity shares will be issued and their relationship with the promoter or/and Key Managerial Personnel;NoTo be Compliedj. the price at which the sweat equity shares are proposed to be issued;NoTo be Compliedk. the consideration including consideration other than cash, if any to be received for the sweat equity;NoTo be Compliedl. would the ceiling on managerial remuneration, if any, be breached by issuance of such sweat equity and how is it proposed to be dealt with;NoTo be Compliedm. a statement to the effect that the company shall conform to the applicable accounting standards; andNoTo be Compliedn. diluted Earnings Per Share pursuant to the issue of sweat equity securities, calculated in accordance with the applicable accounting standards.NoTo be Complied5Issue notice of not less than twenty-one (21) clear days for convening General Meeting to every member of the company, Directors and auditor.NoTo be Complied6In case of listed company, send three copies of the notice to the STOCK EXCHANGES on which the securities of the company are listed.NoTo be Complied7Hold General Meeting and pass the special resolutionNoTo be Complied8E-form Filing: File Form MGT-14 with Registrar of Companies within 30 days of the General Meeting with the following attachment:NoTo be Complieda. Notice calling the EGM.NoTo be Compliedb. Certified true Copy of the Special resolution approving issue of Sweat Equity Shares.NoTo be Complied9In case of listed company, send copy of the proceedings of the general meeting to the stock exchange with which the company is listed.NoTo be Complied10Issue notice in accordance with the provisions of section 173(3) of the Companies Act, 2013, (not less than 7 days in writing) for convening a meeting of the Board of Directors.NoTo be Complied11Hold and convene Board Meeting within 12 months and make allotment of sweat equity shares.NoTo be Complied12E-form Filing: File return of allotment in Form PAS-3 within 30 days of Board Meeting with the following attachment:a. List of allottees, separate list for each allotmentNoTo be Compliedb. Copy of Board resolution approving allotment of sharesNoTo be Compliedc. Valuation Report from the registered valuer is mandatory in case obtained from valuer.NoTo be Complied13Pay Stamp duty on Issue Shares as per the relevant State Stamp Act.NoTo be Complied14Issue Share Certificates to the allottees.NoTo be Complied15Make entry in Register of Sweat Equity Shares maintained in Form No. SH.3NoTo be Complied16Make following disclosure in Boards’ Report of the year in which sweat equity issue is made:a. Class of director/ employee to whom sweat equity shares were issued;NoTo be Compliedb. Class of shares issued as Sweat Equity Shares;NoTo be Compliedc. Number of sweat equity shares issued to the directors, their relatives, key managerial personnel or other employees showing separately the number of such shares issued to them , if any, for consideration other than cash and the individual names of allottees holding 1% or more of the issued share capital ;NoTo be Compliedd. The reasons/justification for the issue;NoTo be Compliede. Principal terms and conditions for issue of sweat equity shares, including pricing formula;NoTo be Compliedf. The total number of shares arising as a result of issue of sweat equity shares;NoTo be Compliedg. Percentage of the sweat equity shares of the total post issued and paid up share capital;NoTo be Compliedh. Consideration (including consideration other than cash) received or benefit accrued to the company from the issue of sweat equity shares;NoTo be Compliedi. Diluted Earnings Per Share (EPS) pursuant to issuance of sweat equity shares.NoTo be CompliedAll About Sweat Equity and the Legalities to be Followed for Sweat Equity Issuance.

Note: This answer comes from my reading of the 1045 paged verdict of the case and I would recommend everyone to read it. The English is simple and understandable. The case has been won from the facts proven by the Archaeological Survey of India’s reports of excavation. I respect the decision as it is given by the Apex Court. I am least interested in any sort of communal propaganda. But if someone still needs to tag me as some sort of agent of certain committee, he is just showing his ignorance and inability to comprehend a legal document. My faith on God does not need any validation from anyone but I am a staunch believer of what is right is always based on facts and what is wrong will always have factual inaccuracies.I also know that a huge section of people would shun off my arguments because this is not based on the opinions made by some sections of social media. I will be called a ‘bhakt’ because that is an easy way to shut up the theories of logic. For the record, I only the endorse the good ideas of all political parties, be it AAP for the electricity tariff, free water and Mohalla Clinic or BJP for Swachh Bharat Mission. I also believe that BJP is facing a lot of scrutiny at present. Demonetization did not provide ample anticipated results. Dollar and petrol are at an all time high rate. Milennials are not responsible for Automotive industry slump! But still I would say, that the Ayodhya verdict is not biased as it is based upon ASI findings.(Despite all these disclaimers, I am already a bhakt by someone who forms his/her opinions based on pop culture and tweets. I have formed my opinion by the 1000 plus page verdict document by the Apex Court. So frankly, I don’t give a damn about anyone when I write this)Within one tweet or debate one cannot decide the right or wrong of one of the most disputed case in Indian history.I am not going to write a sentimental answer here as I believe that law presides over everyone. So one should accept the verdict of Supreme Court on the Ayodhya land dispute.I believe Supreme Court is the custodian of all the fundamental rights and plays a prominent role in keeping India secular.With my limitation when it comes to title disputes legal knowledge, I am exactly not sure if this suit is appeal able in front of a bigger bench but based on my knowledge of the case from the document, I will say that this is not a biased judgement at all. It is based on evidence and thorough research. If in future, any new evidence comes up and there are any modifications in the judgement, that too should be welcomed with open arms.The problem I see with a lot of people is that they want a case to be driven entirely by emotions by the apex court here. When you are the Chief Justice of Supreme court, your verdict has to be on the basis of facts of the case, legal provisions applicable, thorough investigation and at the same time sentiments of the all communities.Some facts about the case:These types of cases are called title suits. They pertain to the ownership of a property where the same is disputed. The next few pointers are simply some excerpts from the judgement.The recording of oral evidence before the High Court commenced on 24 July 1996. During the course of the hearings, the High Court issued directions on 23 October 2002 to the Archaeological Survey of India (―ASI) to carry out a scientific investigation and have the disputed site surveyed by Ground Penetrating Technology or Geo-Radiology (―GPR). The GPR report dated 17 February 2003 indicated a variety of ―anomalies which could be associated with ―ancient and contemporaneous structures such as pillars, foundations, wall slabs and flooring extending over a large portion of the disputed site. In order to facilitate a further analysis, the High Court directed the ASI on 5 March 2003 to undertake the excavation of the disputed site. A fourteen-member team was constituted, and a site plan was prepared indicating the number of trenches to be laid out and excavated. On 22 August 2003, the ASI submitted its final report. The High Court heard objections to the report.The ASI had a GPR survey conducted by a corporate entity which submitted its report to the High Court on 17 February 2003.The report found the presence of ―anomaly alignments across the main platform north and south of the sanctum sanctorum corresponding to the Ramchabutra area. The anomalies suggested the following position: ―…in their cross-section appearance and their areal pattern, the ―anomaly alignments‖ may correspond to a wall foundation of some sort. In the Ram Chabutra area, the crossing patterns of those alignments and the different stratigraphic units from where they (emerge) suggest that they belong to successive construction periods rather than being contemporary to one another.The ASI report also mentioned the following: ―Now, viewing in totality and taking into account the archaeological evidence of a massive structure just below the disputed structure and evidence of continuity in structural phases from the tenth century onwards upto the construction of the disputed structure along with the yield of stone and decorated bricks as well as mutilated sculpture of divine couple and carved architectural members including foliage patters, amalaka, kapotapali doorjamb with semi-circular pilaster, broken octagonal shaft of black schist pillar, lotus motif, circular shrine having pranala (waterchute) in the north, fifty pillar bases in association of the huge structure, are indicative of remains which are distinctive features found associated with the temples of north India.‖ There were certain pointers mentioned by the excavation team members who are all part of ASI and are professional archaeologists. They talked about the presence of motif of ghat, figurines of elephant and tortoise made out of terracota, Makar Pranal etc. all of which are part of a Hindu temple.There were references from the work of Alexander Cunningham who was the director of ASI in the past. The reports were dated 1862–63–64–65. The report talks about the sites of Hanuman Garhi, Swarg Dwar, Lakshman Ghat and the Janmsthan.Some Interesting pointers noted in the Archaeological report mentioned were : (i) Archaeological finds in the area of excavation reveal significant traces of successive civilisations, commencing with the age of the North Black Polished Ware traceable to the second century B.C.; (ii) The excavation by the ASI has revealed the existence of a preexisting underlying structure dating back to the twelfth century. The structure has large dimensions, evident from the fact that there were 85 pillar bases comprised in 17 rows each of five pillar bases; (iii) On a preponderance of probabilities, the archaeological findings on the nature of the underlying structure indicate it to be of Hindu religious origin, dating to twelfth century A.D.; (iv) The mosque in dispute was constructed upon the foundation of the pre-existing structure. The construction of the mosque has taken place in such a manner as to obviate an independent foundation by utilising the walls of the pre-existing structure; and (v) The layered excavation at the site of excavation has also revealed the existence of a circular shrine together with a makara pranala PART P 906 indicative of Hindu worship dating back to the eighth to tenth century.Another Gazetteer published in 1877 is Gazetteer of the Province of Oudh. The Ayodhya has been elaborately dealt in the Gazette. In above Gazetteer, a description with regard to Janamasthan and other temples, is mentioned as extracted.108. Under heading “Babar’s Mosque” and “Hindu and Musalman Differences”, the same contents have been repeated under the Gazetteer, while noticing the Historical Sketch of Tahsil Fyzabad, Zillah Fyzabad by P. Carnegy, which are not being repeated for brevity.The whole judgement text can be read from here.The judgement is passed by the Supreme Court and is based on concrete evidences. The land is established to be Ram Janmbhoomi as per the facts given by the reports of ASI. If the court wanted to be biased, it would not have allocated alternative land for the construction of the mosque.I know it is not going to be one of the most popular answers of mine but truth and facts need not be popular. They are simply the truth and the facts.Let us end the discussion now and move ahead. The new India needs to have bigger problems to take care of and in 2020, communal violence should not be one of them!

In the context of a legal agreement—which is what a term sheet is—a “schedule” is a list of things that are referenced in the agreement. Often, for complex agreements, there are many things that need to be listed. Examples might be:Names and salaries of employeesNames and ownership interests of shareholdersSoftware licensesPatents and intellectual propertyComputers and other owned equipmentLeases the company has signedEtc.Instead of putting all this directly into the agreement, they will instead be listed separately and attached to the end, with the agreement itself just saying something like “the employees as listed in Schedule A”.There is no particular order in which schedules are attached, although it is typically in the order in which they are referenced in the document. And for purposes of clarity, each schedule is numbered (or, more often, lettered, starting with “Schedule A”.)To give you an idea of the kind of schedules you might find in the actual closing documents of an investment (although likely not the term sheet), take a look at this typical due diligence list:A. Organization of the Company1. Describe the corporate or other structure of the legal entities that comprise the Company. Include any helpful diagrams or charts. Provide a list of the officers and directors of the Company and a brief description of their duties.2. Long-form certificate of good standing and articles or certificate of incorporation from Secretary of State or other appropriate official in the Company's jurisdiction of incorporation, listing all documents on file with respect to the Company, and a copy of all documents listed therein.3. Current by-laws of the Company.4. List of all jurisdictions in which the Company is qualified to do business and list of all other jurisdictions in which the Company owns or leases real property or maintains an office and a description of business in each such jurisdiction. Copies of the certificate of authority, good standing certificates and tax status certificates from all jurisdictions in which the Company is qualified to do business.5. All minutes for meetings of the Company's board of directors, board committees and stockholders for the last five years, and all written actions or consents in lieu of meetings thereof.6. List of all subsidiaries and other entities (including partnerships) in which the Company has an equity interest; organizational chart showing ownership of such entities; and any agreements relating to the Company's interest in any such entity.B. Ownership and Control of the Company1. Capitalization of the Company, including all outstanding capital stock, convertible securities, options, warrants and similar instruments.2. List of securityholders of the Company (including option and warrant holders), setting forth class and number of securities held.3. Copies of any voting agreements, stockholder agreements, proxies, transfer restriction agreements, rights of first offer or refusal, preemptive rights, registration agreements or other agreements regarding the ownership or control of the Company.C. Assets and Operations1. Annual financial statements with notes thereto for the past three fiscal years of the Company, and the latest interim financial statements since the end of the last fiscal year and product sales and cost of sales (including royalties) analysis for each product which is part of assets to be sold.2. All current budgets and projections including projections for product sales and cost of sales.3. Any auditors (internal and external) letters and reports to management for the past five years (and management's responses thereto).4. Provide a detailed breakdown of the basis for the allowance for doubtful accounts.5. Inventory valuation, including turnover rates and statistics, gross profit percentages and obsolescence analyses including inventory of each product which is part of assets to be sold.6. Letters to auditors from outside counsel.7. Description of any real estate owned by the Company and copies of related deeds, surveys, title insurance policies (and all documents referred to therein), title opinions, certificates of occupancy, easements, zoning variances, condemnation or eminent domain orders or proceedings, deeds of trust, mortgages and fixture lien filings.8. Schedule of significant fixed assets, owned or used by the Company, including the identification of the person holding title to such assets and any material liens or restrictions on such assets.9. Without duplication from Section D below, or separate intellectual property due diligence checklist, schedule of all intangible assets (including customer lists and goodwill) and proprietary or intellectual properties owned or used in the Company, including a statement as to the entity holding title or right to such assets and any material liens or restrictions on such assets. Include on and off balance sheet items.D. Intellectual PropertyList of all patents, trademarks, tradenames, service marks and copyrights owned or used by the Company, all applications therefor and copies thereof, search reports related thereto and information about any liens or other restrictions and agreements on or related to any of the foregoing (without duplication from attached intellectual property due diligence checklist).E. Reports1. Copies of any studies, appraisals, reports, analyses or memoranda within the last three years relating to the Company (i.e., competition, products, pricing, technological developments, software developments, etc.).2. Current descriptions of the Company that may have been prepared for any purpose, including any brochures used in soliciting or advertising.3. Descriptions of any customer quality awards, plant qualification/certification distinctions, ISO certifications or other awards or certificates viewed by the Company as significant or reflective of superior performance.4. Copies of any analyst or other market reports concerning the Company known to have been issued within the last three years.5. Copies of any studies prepared by the Company regarding the Company's insurance currently in effect and self-insurance program (if any), together with information on the claim and loss experience thereunder.6. Any of the following documents filed by the Company or affiliates of the Company and which contain information concerning the Company: annual reports on SEC Form 10-K; quarterly reports on SEC Form 10-Q; current reports on SEC Form 8-K.F. Compliance with Laws1. Copies of all licenses, permits, certificates, authorizations, registrations, concessions, approvals, exemptions and other operating authorities from all governmental authorities and any applications therefor, and a description of any pending contemplated or threatened changes in the foregoing.2. A description of any pending or threatened proceedings or investigations before any court or any regulatory authority.3. Describe any circumstance where the Company has been or may be accused of violating any law or failing to possess any material license, permit or other authorization. List all citations and notices from governmental or regulatory authorities.4. Schedule of the latest dates of inspection of the Company's facilities by each regulatory authority that has inspected such facilities.5. Description of the potential effect on the Company of any pending or proposed regulatory changes of which the Company is aware.6. Copies of any information requests from, correspondence with, reports of or to, filings with or other material information with respect to any regulatory bodies which regulate a material portion of the Company's business. Limit response to the last five years unless an older document has a continuing impact on the Company.7. Copies of all other studies, surveys, memoranda or other data on regulatory compliance including: spill control, environmental clean-up or environmental preventive or remedial matters, employee safety compliance, import or export licenses, common carrier licenses, problems, potential violations, expenditures, etc.8. State whether any consent is necessary from any governmental authority to embark upon or consummate the proposed transaction.9. Schedule of any significant U.S. import or export restrictions that relate to the Company's operations.10. List of any export, import or customs permits or authorizations, certificates, registrations, concessions, exemptions, etc., that are required in order for the Company to conduct its business and copies of all approvals, etc. granted to the Company that are currently in effect or pending renewal.11. Any correspondence with or complaints from third parties relating to the marketing, sales or promotion practices of the Company.G. Environmental Matters1. A list of facilities or other properties currently or formerly owned, leased, or operated by the Company and its predecessors, if any.2. Reports of environmental audits or site assessments in the possession of the Company, including any Phase I or Phase II assessments or asbestos surveys, relating to any such facilities or properties.3. Copies of any inspection reports prepared by any governmental agency or insurance carrier in connection with environmental or workplace safety and health regulations relating to any such facilities or properties.4. Copies of all environmental and workplace safety and health notices of violations, complaints, consent decrees, and other documents indicating noncompliance with environmental or workplace safety and health laws or regulations, received by the Company from local, state, or federal governmental authorities. If available, include documentation indicating how such situations were resolved.5. Copies of any private party complaints, claims, lawsuits or other documents relating to potential environmental liability of the Company to private parties.6. Listing of underground storage tanks currently or previously present at the properties and facilities listed in response to Item 1 above, copies of permits, licenses or registrations relating to such tanks, and documentation of underground storage tank removals and any associated remediation work.7. Descriptions of any release of hazardous substances or petroleum known by the Company to have occurred at the properties and facilities listed in response to Item 1, if such release has not otherwise been described in the documents provided in response to Items 1-6 above.8. Copies of any information requests, PRP notices, "106 orders," or other notices received by the Company pursuant to CERCLA or similar state or foreign laws relating to liability for hazardous substance releases at off-site facilities.9. Copies of any notices or requests described in Item 8 above, relating to potential liability for hazardous substance releases at any properties or facilities described in response to Item 1.10. Copies of material correspondence or other documents (including any relating to the Company's share of liability) with respect to any matters identified in response to Items 8 and 9.11. Copies of any written analyses conducted by the Company or an outside consultant relating to future environmental activities (i.e., upgrades to control equipment, improvements in waste disposal practices, materials substitution) for which expenditure of funds greater than $10,000 is either certain or reasonably anticipated within the next five years and an estimate of the costs associated with such activities.12. Description of the workplace safety and health programs currently in place for the Company's business, with particular emphasis on chemical handling practices.H. Litigation1. List of all litigation, arbitration and governmental proceedings relating to the Company to which the Company or any of its directors, officers or employees is or has been a party, or which is threatened against any of them, indicating the name of the court, agency or other body before whom pending, date instituted, amount involved, insurance coverage and current status. Also describe any similar matters which were material to the Company and which were adjudicated or settled in the last ten years.2. Information as to any past or present governmental investigation of or proceeding involving the Company or the Company's directors, officers or employees.3. Copies of all attorneys' responses to audit inquiries.4. Copies of any consent decrees, orders (including applicable injunctions) or similar documents to which the Company is a party, and a brief description of the circumstances surrounding such document.5. Copies of all letters of counsel to independent public accountants concerning pending or threatened litigation.6. Any reports or correspondence related to the infringement by the Company or a third party of intellectual property rights.I. Significant Contracts and Commitments1. Contracts relating to any completed (during the past 10 years) or proposed reorganization, acquisition, merger, or purchase or sale of substantial assets (including all agreements relating to the sale, proposed acquisition or disposition of any and all divisions, subsidiaries or businesses) of or with respect to the Company.2. All joint venture and partnership agreements to which the Company is a party.3. All material agreements encumbering real or personal property owned by the Company including mortgages, pledges, security agreements or financing statements.4. Copies of all real property leases relating to the Company (whether the Company is lessor or lessee), and all leasehold title insurance policies (if any).5. Copies of all leases of personal property and fixtures relating to the Company (whether the Company is lessor or lessee), including, without limitation, all equipment rental agreements.6. Guarantees or similar commitments by or on behalf of the Company, other than endorsements for collection in the ordinary course and consistent with past practice.7. Indemnification contracts or arrangements insuring or indemnifying any director, officer, employee or agent against any liability incurred in such capacity.8. Loan agreements, notes, industrial revenue bonds, compensating balance arrangements, lines of credit, lease financing arrangements, installment purchases, etc. relating to the Company or its assets and copies of any security interests or other liens securing such obligations.9. No-default certificates and similar documents delivered to lenders for the last five (or shorter period, if applicable) years evidencing compliance with financing agreements.10. Documentation used internally for the last five years (or shorter time period, if applicable) to monitor compliance with financial covenants contained in financing agreements.11. Any correspondence or documentation for the last five years (or shorter period, if applicable) relating to any defaults or potential defaults under financing agreements.12. Contracts involving cooperation with other companies or restricting competition.13. Contracts relating to other material business relationships, including:a. any current service, operation or maintenance contracts;b. any current contracts with customers;c. any current contracts for the purchase of fixed assets; andd. any franchise, distributor or agency contracts.14. Without duplicating Section D above or the intellectual property due diligence schedule hereto, contracts involving licensing, know-how or technical assistance arrangements including contracts relating to any patent, trademark, service mark and copyright registrations or other proprietary rights used by the Company and any other agreement under which royalties are to be paid or received.15. Description of any circumstances under which the Company may be required to repurchase or repossess assets or properties previously sold.16. Data processing agreements relating to the Company.17. Copies of any contract by which any broker or finder is entitled to a fee for facilitating the proposed transaction or any other transactions involving the Company or its properties or assets.18. Management, service or support agreements relating to the Company, or any power of attorney with respect to any material assets or aspects of the Company.19. List of significant vendor and service providers (if any) who, for whatever reason, expressly decline to do business with the Company.20. Samples of all forms, including purchase orders, invoices, supply agreements, etc.21. Any agreements or arrangements relating to any other transactions between the Company and any director, officer, stockholder or affiliate of the Company (collectively, "Related Persons"), including but not limited to:a. Contracts or understandings between the Company and any Related Person regarding the sharing of assets, liabilities, services, employee benefits, insurance, data processing, third-party consulting, professional services or intellectual property.b. Contracts or understandings between Related Persons and third parties who supply inventory or services through Related Persons to the Company.c. Contracts or understandings between the Company and any Related Person that contemplate favorable pricing or terms to such parties.d. Contracts or understandings between the Company and any Related Person regarding the use of hardware or software.e. Contracts or understandings regarding the maintenance of equipment of any Related Person that is either sold, rented, leased or used by the Company.f. Description of the percentage of business done by the Company with Related Persons.g. Covenants not to compete and confidentiality agreements between the Company and a Related Person.h. List of all accounts receivable, loans and other obligations owing to or by the Company from or to a Related Person, together with any agreements relating thereto.22. Copies of all insurance and indemnity policies and coverages carried by the Company including policies or coverages for products, properties, business risk, casualty and workers compensation. A description of any self-insurance or retro-premium plan or policy, together with the costs thereof for the last five years. A summary of all material claims for the last five years as well as aggregate claims experience data and studies.23. List of any other agreements or group of related agreements with the same party or group of affiliated parties continuing over a period of more than six months from the date or dates thereof, not terminable by the Company on 30 days' notice.24. Copies of all supply agreements relating to the Company and a description of any supply arrangements.25. Copies of all contracts relating to marketing and advertising.26. Copies of all construction agreements and performance guarantees.27. Copies of all secrecy, confidentiality and nondisclosure agreements.28. Copies of all agreements related to the development or acquisition of technology.29. Copies of all agreements outside the ordinary course of business.30. Copies of all warranties offered by the Company with respect to its product or services.31. List of all major contracts or understandings not otherwise previously disclosed under this section, indicating the material terms and parties.32. For any contract listed in this Section I, state whether any party is in default or claimed to be in default.33. For any contract listed in this Section I, state whether the contract requires the consent of any person to assign such contract or collaterally assign such contract to any lender.NOTE: Remember to include all amendments, schedules, exhibits and side letters. Also include brief description of any oral contract listed in this Section I.J. Employees, Benefits and Contracts1. Copies of the Company's employee benefit plans as most recently amended, including all pension, profit sharing, thrift, stock bonus, ESOPs, health and welfare plans (including retiree health), bonus, stock option plans, direct or deferred compensation plans and severance plans, together with the following documents:a. all applicable trust agreements for the foregoing plans;b. copies of all IRS determination letters for the foregoing qualified plans;c. latest IRS forms for the foregoing qualified plans, including all annual reports, schedules and attachments;d. latest copies of all summary plan descriptions, including modifications, for the foregoing plans;e. latest actuarial evaluations with respect to the foregoing defined benefit plans; andf. schedule of fund assets and unfunded liabilities under applicable plans.2. Copies of all employment contracts, consulting agreements, severance agreements, independent contractor agreements, non-disclosure agreements and non-compete agreements relating to any employees of the Company.3. Copies of any collective bargaining agreements and related plans and trusts relating to the Company (if any). Description of labor disputes relating to the Company within the last three years. List of current organizational efforts and projected schedule of future collective bargaining negotiations (if any).4. Copies of all employee handbooks and policy manuals (including affirmative action plans).5. Copies of all OSHA examinations, reports or complaints.6. The results of any formal employee surveys.K. Tax Matters1. Copies of returns for the three prior closed tax years and all open tax years for the Company (including all federal and state consolidated returns) together with a work paper therefor wherein each item is detailed and documented that reconciles net income as specified in the applicable financial statement with taxable income for the related period.2. Audit and revenue agents reports for the Company; audit adjustments proposed by the Internal Revenue Service for any audited tax year of the Company or by any other taxing authority; or protests filed by the Company.3. Settlement documents and correspondence for last six years involving the Company.4. Agreements waiving statute of limitations or extending time involving the Company.5. Description of accrued federal, state and local withholding taxes and FICA for the Company.6. List of all state, local and foreign jurisdictions in which the Company pays taxes or collects sales taxes from its retail customers (specifying which taxes are paid or collected in each jurisdiction).L. Miscellaneous1. Information regarding any material contingent liabilities and material unasserted claims and information regarding any asserted or unasserted violation of any employee safety and environmental laws and any asserted or unasserted pollution clean-up liability.2. List of the ten largest customers and suppliers for each product or service of the Company.3. List of major competitors for each business segment or product line.4. Any plan or arrangement filed or confirmed under the federal bankruptcy laws, if any.5. A list of all officers, directors and stockholders of the Company.6. All annual and interim reports to stockholders and any other communications with securityholders.7. Description of principal banking and credit relationships (excluding payroll matters), including the names of each bank or other financial institution, the nature, limit and current status of any outstanding indebtedness, loan or credit commitment and other financing arrangements.8. Summary and description of all product, property, business risk, employee health, group life and key-man insurance.9. Copies of any UCC or other lien, judgment or suit searches or filings related to the Company in relevant states conducted in the past three years.10. Copies of all filings with the Securities and Exchange Commission, state blue sky authorities or foreign security regulators or exchanges.11. All other information material to the financial condition, businesses, assets, prospects or commercial relations of the Company.