EX-4.2



 Exhibit 4.2 

Employee Share Ownership Plan (“ESOP”) 2013 
  

	a.	Performance Period: For vesting condition, the performance period considered will be FY 2013-14. 

  

	b.	Vesting of options: The options awarded under ESOP 2013 shall vest based on the achievement of business performance in the performance period as defined above and also continued employment with the Group.


 The vesting schedule shall be staggered over a period of three years from the date of grant with 70% vesting based on the
achievement of business performance and the remaining 30% based on continued employment with the Group till the end of 3rd year. 

Therefore, the options shall vest at 40% at the end of 1st year, 30% at the end of 2nd year and the remaining 30% which is tenure-based at the end of 3rd year. For an employee to be eligible for performance-based vesting, he/she
should continue to be in employment till the date of vesting each year. 
 However, for Executive Directors, 100% vesting will be based on
achievement of performance condition with a staggered vesting schedule of 40:30:30 at the end of each year. 
  

	c.	Performance conditions: 

  

	 	•	 	For Businesses - The vesting of options will be dependent on the achievement of business performance measured against 

  

	 	•	 	Operation Deliverables consisting of either Volume / COP / Free Cash Flow / EBITDA / Gross Working Capital / Sustainability 

  

	 	•	 	Enablers consisting either of Asset Optimization / Mine Planning & Development / PR. 

  

	 	•	 	Completion of stipulated tenure with the Group. 

 The performance parameter scorecard for other
businesses is provided in Annexure A. 
  

	 	•	 	For EDs and Corporate Team based in Mumbai, Delhi and London – The performance conditions considered for EDs and Corp Team is weighted average score of businesses, financial aspects and Sustainability as
follows. 


 


 For Corp Team: 
  

							
	 SI No
	  	 Parameter
	  	Weightage	 
	1	  	 Weighted Average Score of Businesses*
	  	 	50	% 
	2	  	 Market Capitalization of VR Plc**
	  	 	50	% 
		  		  	  
	  
	 
		  	 Total
	  	 	100	% 
		  		  	  
	  
	 

 

 For Executive Directors: 
  

							
	 SI No
	  	 Parameter
	  	Weightage	 
	1	  	 Weighted Average Score of Businesses*
	  	 	40	% 
	2	  	 Market Capitalization of VR Plc**
	  	 	50	% 
	3	  	 Sustainability
	  	 	10	% 
		  		  	  
	  
	 
		  	 Total
	  	 	100	% 
		  		  	  
	  
	 

 
 

  

	*	Weightages for Business Scores of entities will be as follows: 

  

																					
	 Company
	  	HZL	  	SGL	  	KCM	  	Av of Balco, VAL & SEL	  	Av of ZI	  	S Cu	  	Malco	  	CMT	  	FG	  	VGCB
	 Score
	  	Simple average of above entities’ Business Score	  	Simple average of above entities’ Business Score
	 Weightage
	  	80%	  	20%

  

	**	The Comparator Group comprises of 14 companies as in Alcoa, Anglo American, Antofagasta, BHP Billiton, ENRC, First Quantum, FMG – Fortescue, Glencore, Khazamkhys, Rio Tinto, Teck, Tullow, Vale and Xstrata. The
score against market capitalization parameter for (ii) above shall be determines using the table below relying upon the relative ranking in the comparator Group. The relative ranking will be calculated on the basis of last 30 days average share
price at the beginning and at the end of the performance period (1st April to 31st March). 

  

			
	 Relative Ranking
	  	 Score

	 1 - 3
	  	100
	 4
	  	90
	 5
	  	85
	 6
	  	80
	 7
	  	75
	 8
	  	70
	 9
	  	60
	 10
	  	50
	 11
	  	40
	 12
	  	30
	 13 - 15
	  	Nil


  

			
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	d.	Business Performance Score: The weighted average score of the various parameters detailed out above will be known as the Business Performance Score. 


 

	e.	Vesting proportion: The vesting proportion will be dependent on the achievement of pre-determined performance conditions. Businesses have been classified as Category A and B on the basis of complexity and nature
of operations affecting the achievement of performance conditions. 

 For example, the vesting matrix for HZL will be as
follows: 
  

			
	 Business Performance Score
	  	Vesting %
	 90% - 100%
	  	50% plus 5% for every 1% score above 90%
	 85% - 90%
	  	30% plus 4% for every 1% score above 85%
	 At 85%
	  	30%
	 Below 85%
	  	Nil

 The vesting matrix for other businesses is provided in Annexure B. 

 

			
	Enclosed:	 	Annexure A – Performance Parameter Scorecard
		 	Annexure B – Vesting Matrix for Category A and B businesses

 Annexure A: Performance Parameter Scorecard 

The weightages of the various OD and Enabler parameters in each business will be as follows: 

 

																																																													
	 Parameters
	 	HZL	 	 	KCM	 	 	SGL	 	 	SGL
(VAB)	 	 	Balco	 	 	VAL-J	 	 	VAL-L	 	 	SEL	 	 	BMM
SZ	 	 	LM	 	 	S Cu	 	 	S Cu
CPP
Malco	 	 	CMT	 	 	FG10	 	 	VGCB	 
	 Operational Deliverables
	 				 				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Volume
	 	 	45	%1 	 	 	40	%3 	 	 	30	%4 	 	 	30	% 	 	 	30	%5 	 	 	30	% 	 	 	30	% 	 	 	20	% 	 	 	30	% 	 	 	40	% 	 	 	20	%7 	 	 	20	% 	 	 	50	% 	 	 	35	% 	 	 	20	% 
	 COP
	 	 	25	%2 	 	 	20	% 	 	 	20	% 	 	 	—  	  	 	 	20	%6 	 	 	20	% 	 	 	30	% 	 	 	—  	  	 	 	25	% 	 	 	25	% 	 	 	20	%8 	 	 	—  	  	 	 	40	% 	 	 	25	% 	 	 	10	% 
	 Free Cash Flow (excl buyers/suppliers credit)
	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	10	% 	 	 	20	% 	 	 	20	% 	 	 	—  	  	 	 	30	% 	 	 	20	% 	 	 	20	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	50	% 
	 EBITDA
	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	40	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	30	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  
	 Gross Working Capital (12 month average)
	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	20	% 	 	 	—  	  	 	 	20	% 	 	 	—  	  
	 Sustainability
	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	15	% 	 	 	15	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 
	 Enablers
	 				 				 				 				 				 				 				 				 				 				 				 				 				 				 			
	 Asset Optimization
	 	 	10	% 	 	 	20	% 	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  
	 Mine Planning Development
	 	 	10	% 	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  
	 ER / PR9
	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	20	% 	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	10	% 
	 Project Milestone
	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  

 Note: 
 For SGL, Aluminium and SC
common, the business score will be weighted average score of the respective businesses as follows: 
  

	 	•	 	SGL common - 70% of SGL, 20% of SGL (VAB) and 10% of WCL 

  

	1 	Volume weightage of 45% comprises 30% for MIC volume, 10% for Refined metal production and 5% for integrated saleable silver. 


	2 	COP weightage of 25% comprises 15% for Zn COP and 10% for Pb COP 


	3	Volume refers to integrated production 


	4 	Volume refers to Iron Ore sales 


	5 	Volume weightage of 30% comprises 15% for Al volume and 15% for power sales 


	6 	COP weightage of 20% comprises 10% for Al COP and 10% for commercial power COP 


	7 	Volume refers to production of fresh anode 


	8 	COP refers to Gross COP 


	9 	Refers to Top 3 actionable agenda 


	10 	For FG, all applicable parameters comprises 50% for CCR and 50% for PMR 


  

			
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 Project Milestones for Projects: 

 



					
	For WCL, Liberia	  			
	 •  Project timeline
	  	 	– 30	% 
	 •  Project Cost
	  	 	– 30	% 
	 •  Exploration
	  	 	– 15	% 
	 •  Sustainability
	  	 	– 15	% 
	 •  MAS grading
	  	 	– 10	% 

 


					
	For TSPL, Talwandi and VMRF	  
	 •  Project timeline
	  	–	 40	% 
	 •  Project Cost
	  	–	 35	% 
	 •  Sustainability
	  	–	 15	% 
	 •  MAS grading
	  	–	 10	% 

 
 


 ZI Common 
  

					
	 Operational Deliverables
	  	Weightage	 
	 Volume
	  	 	30	% 
	 COP
	  	 	25	% 
	 Free Cash Flow (excl buyers/suppliers credit)
	  	 	10	% 
	 Sustainability*
	  	 	15	% 
		
	 Enablers
	  	Weightage	 
	 Project Milestone
	  	 	20	% 
		  	  
	  
	 
	 Total
	  	 	100	% 
		  	  
	  
	 

 

 ZI projects: 
  

					
	 Operational Deliverables
	  	Weightage	 
	 Sustainability*
	  	 	15	% 
	 Gamsberg
	  	 	35	% 
	 Swartberg
	  	 	15	% 
	 Refinery Conversion
	  	 	15	% 
	 Gergarub
	  	 	15	% 
	 Power Projects
	  	 	5	% 
		  	  
	  
	 
	 Total
	  	 	100	% 
		  	  
	  
	 

 
 


 Note: *Sustainability weightage of 15% comprises 10% for safety and environmental performance and 5% for
sustainability initiatives. 
  

	**	Project Milestone scores would be based on progress on Gamsberg, Swartberg, Refinery Conversion, Gergarub and Magnetite Project




 Note: *Sustainability weightage of 15% comprises 10% for safety and environmental performance and 5% for
sustainability initiatives 

 

  
 Annexure B: Vesting Matrix for Category
A and B businesses. 
  

							
	 Category A
	 	 Business Performance Score
	 	 Vesting %

	 •  HZL
	  	 •  ZI
	 	90% - 100%	 	50% plus 5% for every 1% score above 90%
	 •  SC & SC (CPP)
	  	 •  CMT
	 	85% - 90%	 	30% plus 4% for every 1% score above 85%
	 •  Malco
	  	 •  FG
	 	At 85%	 	30%
		  		 	Below 85%	 	Nil
			
	 Category B
	 	 Business Performance Score
	 	 Vesting %

	 •  VAL-J
	  	 •  SEL
	 	90% - 100%	 	60% plus 4% for every 1% score above 90%
	 •  VAL-L
	  	 •  KCM
	 	80% - 90%	 	30% plus 3% for every 1% score above 80%
	 •  BALCO
	  	 •  VGCB
	 	At 80%	 	30%
	 •  SGL & SGL (VAB)
	  		 	Below 80%	 	Nil

 Note: In case, the business performance score exceeds 100%, Remco approval will be sought for higher vesting proportion. 

The above vesting matrix will ensure delivery of high performance levels due to higher exponential vesting percentage as the score improves. 

  

			
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