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As per guidelines issued by the Securities and Exchange Board of India, dated 11-6-1992, Employees Stock Option Scheme is voluntary on the part of a company to encourage employees to have a higher participation in the company. As per scheme, reservation should not be more than 5% of the issue to be equitably distributed among the employees. The issued may have non- transferability at his discretion in new issues and in other cases, employee's participation upto 5% (maximum 200 shares) shall be non-transferable for a period of three years. The companies have been advised to ensure that the shares reserved under the employees' quota to be allotted only to the bonafide employees, subject to the guidelines issued by SEBI and the shares remaining unsubscribed by the employees may be offered to the general public through prospectus in terms of the issue, if any.