EX-4.4 2 d32971dex44.htm EX-4.4 EX-4.4

Exhibit 4.4

 

  Forum    Vedanta Resources Plc Remuneration Committee Meeting   
  Date    11th November 2014   
  Agenda Item      
  Agenda Name    Performance Share Plan – 2014 Tranche   
 

Presented by

 

   

Rajesh Padmanabhan

 

   

Performance Share Plan (“PSP”) is a conditional share plan for rewarding performance on a pre-determined performance criteria i.e. Total Shareholder Return (“TSR”) over 3-year performance period and continued employment with the Group.

 

1. Coverage:

35% of the professional population (i.e. employees in grade M7 and above) covered – 2326 employees.

 

2. Grant of options: VR Plc Options will be awarded to employees under the PSP effective 15th November 2014 as per below options matrix derived from average fixed pay of each grade.

 

Category

    I      II      III      IV  

SVP, M1

      16,500         13,000         10,500         8,000   

VP, M1

      13,000         10,000         7,000         4,000   

AVP, M2

      8,500         6,500         5,000         3,500   

GM, M2

      6,500         5,200         3,900         2,600   

M3

      4,500         3,600         2,700         1,800   

M4

      3,000         2,400         1,800         1,200   

M5

      2,000         1,600         1,200         800   

M6

      1,100         900         700         500   

M7

      900         700         500         300   

Note: The above grid is normalized at the Group level to factor consistencies and criticalities.

 

3. Performance Period:

For vesting condition, the performance period considered will be 36 months from 1st April 2014 to 31st March 2017.

 

4. Performance Conditions:

The options awarded under PSP shall vest after 3 years from date of grant based on the Group’s relative Total Shareholder Return (“TSR”) performance against the peer group of resource companies (as detailed out below) and continued employment with the Group.

 

Alcoa   Anglo American   Antofagasta   BHP Billiton   Boliden
Dragon Oil   First Quantum   Glencore Xstrata   Grupo Mexico   Hindalco Industries
Oz Minerals   Petrofac   Rio Tinto   Tullow Oil   Vale

The TSR performance of a company shall be calculated by reference to three month averaging periods prior to the start and end of the performance period.

If any member of the Comparator Group ceases to exist, its shares cease to be listed on a recognized stock exchange, or otherwise is so changed as to make it, in the opinion of the Committee, unsuitable as a member of the Comparator Group, the Committee may: (a) exclude that company; (b) in the event of a takeover, replace that company with the acquiring company; (c) include a substitute for that company; (d) track the future performance of that company by reference to an index; or (e) treat the company in any other way it decides is appropriate.

 

Performance Share Plan / Vedanta / Remco / November 2014

5. Vesting Schedule:

The options shall cliff vest on completion of three years from the date of grant based on achievement of performance conditions and completion of tenure with Group.

 

Category

    Based on TSR Performance     Based on Tenure  

EDs / Exco Members

      100 %      —     

P / M1 (SVP / VP)

      80 %      20 % 

M2 (AVP / GM)

      50 %      50 % 

M3 – M7

      40 %      60 % 

However, for an employee to be eligible for performance-based vesting, he/she should continue to be in employment at the date of vesting. Options are then exercisable up until the tenth anniversary of grant unless they lapse earlier.

Note: For the tenure-based vesting, individual performance of the employee will be taken into consideration.

 

6. Vesting proportion:

At the end of the performance period, the company will be ranked in accordance to TSR performance against the companies in the comparator group with threshold vesting of 30% at median and scaling upto 100% vesting at upper quintile as below:

 

Rank

    Percentage of share that vest  

1 – 3 (Top quintile)

      100 % 

4

      90 % 

5

      75 % 

6

      60 % 

7

      45 % 

8

      30 % 

9 – 16 (Below median)

      Nil   

 

7. Financial Implication: The average number of options per employee is 2361 and the total financial impact is $ 92 mn approx. Table below details out the cost implication of the proposed tranche as well as previous tranches:

 

Details

    LTIP 2011     ESOP 2012     ESOP 2013     Proposed PSP
Tranche 2014		  

No of employees covered

      2684        2818        2485        2326   

% age of eligible population covered

      30 %      39 %      45 %      35 % 

No of options allocated

      2,862,100        4,652,550        3,963,750        5,491,000   

Share Price (in GBP)

      19        9.5        12        10   

Exchange rate

      72        87        80        100   

Value per option

      1368        826.50        960        1000   

Average no of options per employee

      1,066        1,651        1,595        2,361   

Average share value per employee

    Rs 14.58 L      Rs 13.64 L      Rs 15.31 L      Rs 23.61 L   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total Financial Impact

    Rs  391.53 cr      Rs  384.53 cr      Rs  380.52 cr      Rs  549.10 cr   
  

 

 

    

 

 

    

 

 

    

 

 

  
   $ 86.90 m      $ 69.92 m      $ 63.42 m      $ 91.52 m   
  

 

 

    

 

 

    

 

 

    

 

 

  

Note: The share price assumed is GBP 10 for PSP 2014.

 

Performance Share Plan / Vedanta / Remco / November 2014

8. PSP coverage for new joinees: Currently we are in the process of recruitment and induction of senior-level high resources in the following critical positions across the Group, likely to join us in FY 15.

 

Sl No

   

Position

     

1

    CEO Designate – ZI   

2

    CEO – Aluminium & Power Sector   

3

    Group Treasury Head   

4

    Group Legal Counsel   

5

    Group Company Secretary, SSL   

In line with our philosophy of providing competitive remuneration package that attracts and motivates high quality resources, we intend to cover them in PSP scheme effective their joining.

The above resources will be granted options effective 1st day of the immediately succeeding quarter in line with PSP scheme wherein vesting will be on completion of the 36-month performance period from the date of grant subject to achievement of performance conditions and continued employment as on the date of vesting.

We recommend for a prior approval of 100,000 options to line with the aforesaid proposal.

 

Enclosed:    Annexure A – Proposal for Executive Directors and PDMR
   Annexure B – Guidelines for calculating the number of options for employees
   Annexure C – List of employees covered in PSP 2014

 

Performance Share Plan / Vedanta / Remco / November 2014

Annexure A: PSP 2014 proposal for Executive Directors and PDMR

Executive Directors, VR Plc:

 

Position

    INR Base      GBP Base      Total Base
(in GBP)		      Number of
options proposed		      Value of
options at £10
(in GBP)		      % of Base  

Executive Chairman

      —           1,608,000         1,608,000         225,000         2,250,000         140 % 

Dy Executive Chairman

      92,650,000         85,000         1,011,500         140,000         1,400,000         138 % 

Chief Executive Officer

      —           1,000,000         1,000,000         170,000         1,700,000         170 %* 

Note: * PSP coverage is governed by the appointment contract. Share price of GBP 8.8 considered for calculating grant numbers.

PDMR list: The other PDMR members will be awarded options as proposed below:

 

Sl No

   

Co

   

Name

    Options Proposed for PSP 2014
(Share Price -  £ 10 ; GBP : INR - 100)		  

1

    Corp   

Tarun Jain

      95,000   

2

    Corp   

D D Jalan

      50,000   

3

    Corp   

Agnivesh Agarwal

      50,000   

4

    SSL, J   

SK Roongta

      40,000   

5

    ZI   

R Kishore Kumar

      30,000   

6

    HZL   

Akhilesh Joshi

      30,000   

7

    Corp   

Dilip Golani

      27,500   

8

    SC   

P Ramnath

      22,000   

9

    SSL, J   

Abhijit Pati

      22,000   

10

    HZL   

Sunil Duggal

      22,000   

11

    IOB   

Pramod Unde

      22,000   

12

    KCM   

Steven Din

      22,000   

13

    Corp   

Rajesh Padmanabhan

      20,000   

14

    Proj   

M Siddiqi

      16,500   

15

    Corp   

Ashwin Bajaj

      16500   

16

    Balco   

Ramesh Nair

      15,000   

17

    Corp   

Roma Balwani

      13,000   

18

    Corp   

Deepak Kumar

      11,000   

 

Performance Share Plan / Vedanta / Remco / November 2014

Annexure B: Guidelines on coverage in PSP

 

  •   35% of professional population will be eligible for coverage

 

  •   Employees with a rating of not less than ‘Good’ in the last appraisal will be eligible.

 

  •   M6 entry level freshers should have completed atleast 1 year of service as on 1st August 2014 and M7 entry level freshers should have completed alteast 2 years of service as on 1st August 2014.

 

  •   Employees due to retire in the next 6 months will not be eligible.

 

  •   The eligible population to be plotted on performance and potential matrix with 70% weighting on performance and 30% weighting on potential.

 

  •   Performance scoring based on latest appraisal rating will be as follows:

 

Rating

  

Excellent

  

Very Good

  

Good

Score   100   80   60

 

  •   Potential scoring will be based on pre-determined criteria as below:

 

Potential Level

  

High Potential

  

Medium Potential

  

Low Potential

Score   100   80   60

Factors determining potential levels:

 

  •   Key strategic initiatives over and above the work responsibilities and the impact on the unit/business/group at large.

 

  •   Key talent (identified in succession pipeline / scalable to large role, role / person - criticality).

 

  •   Demonstrated mobility having moved over units / functions / locations.

 

  •   Stakeholder relations including external influence, if any.

 

  •   Based final weighted average score employees will be categorized in four categories as below with I being the highest rating.

 

Category

    I     II     III     IV  

Population Distribution

      10 %      15 %      55 %      20 % 

 

Performance Share Plan / Vedanta / Remco / November 2014