Document:

Exhibit 10.51 Wilson Amended and Restated Employment Agreement

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (“Agreement”) is made as of the Effective Date between Cincinnati Bell Inc. (“Employer”) and Christopher J. Wilson (“Employee”).  For purposes of this Agreement, the “Effective Date” means January 1, 2015. 
Employer and Employee agree as follows: 
1.    Employment.  By this Agreement, Employer and Employee set forth the terms of Employer’s employment of Employee on and after the Effective Date.  Any prior agreements or understandings with respect to Employee’s employment by Employer are canceled as of the Effective Date.  Notwithstanding the preceding sentence, except as provided in Section 13 of this Agreement, all stock options, restricted shares and other long term incentive awards granted to Employee prior to the Effective Date, benefit plans in which Employee is eligible for participation and any Employer policies to which Employee is subject shall continue in effect in accordance with their respective terms and shall not be modified, amended or cancelled by this Agreement. 
2.    Term of Agreement.  The term of this Agreement initially shall be the one year period commencing on the Effective Date.  On the first anniversary of the Effective Date and on each subsequent anniversary of the Effective Date, the term of this Agreement automatically shall be extended for a period of one additional year.  Notwithstanding the foregoing, the term of this Agreement is subject to termination as provided in Section 13. 
3.    Duties. 
A.    Employee will serve as Vice President, General Counsel & Secretary for Cincinnati Bell Inc. or in such other equivalent capacity as may be designated by the Chief Executive Officer of Employer.  Employee will report to the Chief Executive Officer of Employer or to such other officer as the Chief Executive Officer of Employer may direct. 
B.    Employee shall furnish such managerial, executive, financial, technical and other skills, advice, and assistance in operating Employer and its Affiliates as Employer may reasonably request.  For purposes of this Agreement, “Affiliate” means each corporation or organization that is deemed to be a single employer with Employer under Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended (the “Code”) (i.e., as part of a controlled group of corporations that includes Employer or under common control with Employer).  
C.    Employee shall also perform such other duties, consistent with the provisions of Section 3.A., as are reasonably assigned to Employee by the Chief Executive Officer of Employer.  
D.    Employee shall devote Employee’s entire time, attention and energies to the business of Employer and its Affiliates.  The words “entire time, attention and energies” are intended to mean that Employee shall devote Employee’s full effort during reasonable working hours to the business of Employer and its Affiliates and shall devote at least 40 hours per week to the business of Employer and its Affiliates.  Employee shall travel to such places as are necessary in the performance of Employee’s duties. 

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4.    Compensation. 
A.    Employee shall receive a base salary (the “Base Salary”) of at least $353,600 per year, payable not less frequently than monthly, for each year during the term of this Agreement, subject to proration for any partial year.  Such Base Salary, and all other amounts payable under this Agreement, shall be subject to withholding as required by law. 
B.    In addition to the Base Salary, Employee shall be eligible to receive an annual bonus (the “Bonus”) for each calendar year for which services are performed under this Agreement.  Any Bonus for a calendar year shall be payable after the conclusion of the calendar year in accordance with Employer’s regular bonus payment policies.  Each year, Employee shall be given a Bonus target of not less than $353,600, subject to proration for a partial year.  The Bonus target shall be established from time to time by Employer’s Compensation Committee if Employee is a named executive officer for purposes of Employer’s annual proxy statement or is otherwise an executive officer whose compensation is determined by the Compensation Committee, or, if Employee is not so subject, then in accordance with the provisions of Employer’s then existing annual incentive plan or any similar plan made available to employees of Employer (“annual incentive plan”) in which Employee participates.  Any Bonus award to Employee shall further be subject to the terms and conditions of any such applicable annual incentive plan. 
C.    On at least an annual basis, Employee shall receive a formal performance review and be considered for Base Salary and/or Bonus target increases. 
5.    Expenses.  All reasonable and necessary expenses incurred by Employee in the course of the performance of Employee’s duties to Employer shall be reimbursable in accordance with Employer’s then current travel and expense policies. 
6.    Benefits. 
A.    While Employee remains in the employ of Employer, Employee shall be eligible to participate in all of the various employee benefit plans and programs, which are made available to similarly situated officers of Employer, in accordance with the eligibility provisions and other terms and conditions of such plans and programs. 
B.    Notwithstanding anything contained herein to the contrary, the Base Salary and any Bonuses otherwise payable to Employee shall be reduced by any benefits paid to Employee by Employer under any disability plans made available to Employee by Employer (“Disability Plans”). 
C.    In each year of this Agreement, Employee will be eligible to be considered for a grant of awards under Employer’s 2007 Long Term Incentive Plan and/or any similar plan made available to employees of Employer. 

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7.    Confidentiality.  Employer and its Affiliates are engaged in the telecommunications industry within the U.S. Employee acknowledges that in the course of employment with the Employer, Employee will be entrusted with or obtain access to information proprietary to Employer and its Affiliates with respect to the following (all of which information is referred to hereinafter collectively as the “Information”); the organization and management of Employer and its Affiliates; the names, addresses, buying habits and other special information regarding past, present and potential customers, employees and suppliers of Employer and its Affiliates; customer and supplier contracts and transactions or price lists of Employer, its Affiliates and their suppliers; products, services, programs and processes sold, licensed or developed by Employer or its Affiliates; technical data, plans and specifications, and present and/or future development projects of Employer and its Affiliates; financial and/or marketing data respecting the conduct of the present or future phases of business of Employer and its Affiliates; computer programs, systems and/or software; ideas, inventions, trademarks, trade secrets, business information, know-how, processes, improvements, designs, redesigns, discoveries and developments of Employer and its Affiliates; and other information considered confidential by any of the Employer, its Affiliates or customers or suppliers of Employer and its Affiliates.  At all times during the term of this Agreement and thereafter, Employee agrees to retain the Information in absolute confidence and not to disclose the Information to any person or organization except as required in the performance of Employee’s duties for Employer, without the express written consent of Employer; provided that Employee’s obligation of confidentiality shall not extend to any Information which becomes generally available to the public other than as a result of disclosure by Employee. 
8.    New Developments.  All ideas, inventions, discoveries, concepts, trade secrets, trademarks, service marks or other developments or improvements, whether patentable or not, conceived by Employee, alone or with others, at any time during the term of Employee’s employment, whether or not during working hours or on Employer’s premises, which are within the scope of or related to the business operations of Employer or its Affiliates (“New Developments”), shall be and remain the exclusive property of Employer.  Employee agrees that any New Developments which, within one year after the cessation of employment with Employer, are made, disclosed, reduced to a tangible or written form or description or are reduced to practice by Employee and which are based upon, utilize or incorporate Information shall, as between Employee and Employer, be presumed to have been made during Employee’s employment by Employer.  Employee further agrees that Employee will not, during the term of Employee’s employment with Employer, improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity and that Employee will not bring onto Employer premises any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity. 
At all times during the term of this Agreement and thereafter, Employee shall do all things reasonably necessary to ensure ownership of such New Developments by Employer, including the execution of documents assigning and transferring to Employer all of Employee’s rights, title and interest in and to such New Developments and the execution of all documents required to enable Employer to file and obtain patents, trademarks, service marks and copyrights in the United States and foreign countries on any of such New Developments. 

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9.    Surrender of Material Upon Termination.  Employee hereby agrees that upon cessation of Employee’s employment, for whatever reason and whether voluntary or involuntary, Employee will immediately surrender to Employer all of the property and other things of value in his possession or in the possession of any person or entity under Employee’s control that are the property of Employer or any of its Affiliates, including without any limitation all personal notes, drawings, manuals, documents, photographs or the like, including copies and derivatives thereof, and e-mails and other electronic and digital information of all types regardless of where or the type of device on which such materials may be stored by Employee, relating directly or indirectly to any Information, materials or New Developments, or relating directly or indirectly to the business of Employer or any of its Affiliates. 
10.    Remedies. 
A.    Employer and Employee hereby acknowledge and agree that the services rendered by Employee to Employer, the information disclosed to Employee during and by virtue of Employee’s employment and Employee’s commitments and obligations to Employer and its Affiliates herein are of a special, unique and extraordinary character, and that the breach of any provision of this Agreement by Employee will cause Employer irreparable injury and damage, and consequently the Employer shall be entitled to, in addition to all other remedies available to it, injunctive and equitable relief to prevent a breach of Sections 7, 8, 9, 11 and 12 of this Agreement and to secure the enforcement of this Agreement. 
B.    Except as provided in Section 10.A., the parties hereto agree to submit to final and binding arbitration any dispute, claim or controversy, whether for breach of this Agreement or for violation of any of Employee’s statutorily created or protected rights, arising between the parties that either party would have been otherwise entitled to file or pursue in court or before any administrative agency (herein “claim”), and each party waives all right to sue the other party. 
(i)    This agreement to arbitrate and any resulting arbitration award are enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”).  If the FAA is held not to apply for any reason, then Ohio Revised Code Chapter 271l regarding the enforceability of arbitration agreements and awards will govern this Agreement and the arbitration award. 
(ii)    (a)    All of a party’s claims must be presented at a single arbitration hearing.  Any claim not raised at the arbitration hearing is waived and released.  The arbitration hearing will take place in Cincinnati, Ohio. 
(b)    The arbitration process will be governed by the Employment Dispute Resolution Rules of the American Arbitration Association (“AAA”) except to the extent they are modified by this Agreement.  In the event that any provisions of this Section 10 are determined by AAA to be unenforceable or impermissibly contrary to AAA rules, then this Section 10 shall be modified as necessary to comply with AAA requirements. 
(c)    Employee has had an opportunity to review the AAA rules and the requirements that Employee must pay a filing fee for which Employer has agreed to split on an equal basis. 
(d)    The arbitrator will be selected from a panel of arbitrators chosen by the AAA.  After the filing of a Request for Arbitration, the AAA will send simultaneously to Employer and Employee an identical list of names of five persons chosen from the panel.  Each party will have 10 days from the transmittal date in which to strike up to two names, number the remaining names in order of preference and return the list to the AAA. 

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(e)    Any pre-hearing disputes will be presented to the arbitrator for expeditious, final and binding resolution. 
(f)    The award of the arbitrator will be in writing and will set forth each issue considered and the arbitrator’s finding of fact and conclusions of law as to each such issue. 
(g)    The remedy and relief that may be granted by the arbitrator to Employee are limited to lost wages, benefits, cease and desist and affirmative relief, compensatory, liquidated and punitive damages and reasonable attorney’s fees, and will not include reinstatement or promotion.  If the arbitrator would have awarded reinstatement or promotion, but for the prohibition in this Agreement, the arbitrator may award front pay.  The arbitrator may assess to either party, or split, the arbitrator’s fee and expenses and the cost of the transcript, if any, in accordance with the arbitrator’s determination of the merits of each party’s position, but each party will bear any cost for its witnesses and proof. 
(h)    Employer and Employee recognize that a primary benefit each derives from arbitration is avoiding the delay and costs normally associated with litigation.  Therefore, neither party will be entitled to conduct any discovery prior to the arbitration hearing except that: (i) Employer will furnish Employee with copies of all non-privileged documents in Employee’s personnel file; (ii) if the claim is for discharge, Employee will furnish Employer with records of earnings and benefits relating to Employee’s subsequent employment (including self-employment) and all documents relating to Employee’s efforts to obtain subsequent employment; (iii) the parties will exchange copies of all documents they intend to introduce as evidence at the arbitration hearing at least 10 days prior to such hearing; (iv) Employee will be allowed (at Employee’s expense) to take the depositions, for a period not to exceed four hours each, of two representatives of Employer, and Employer will be allowed (at its expense) to depose Employee for a period not to exceed four hours; and (v) Employer or Employee may ask the arbitrator to grant additional discovery to the extent permitted by AAA rules upon a showing that such discovery is necessary. 
(i)    Nothing herein will prevent either party from taking the deposition of any witness where the sole purpose for taking the deposition is to use the deposition in lieu of the witness testifying at the hearing and the witness is, in good faith, unavailable to testify in person at the hearing due to poor health, residency and employment more than 50 miles from the hearing site, conflicting travel plans or other comparable reason. 
(j)    Arbitration must be requested in writing no later than 6 months from the date of the party’s knowledge of the matter disputed by the claim.  A party’s failure to initiate arbitration within the time limits herein will be considered a waiver and release by that party with respect to any claim subject to arbitration under this Agreement. 
(k)    Employer and Employee consent that judgment upon the arbitration award may be entered in any federal or state court that has jurisdiction. 
(1)    Except as provided in Section 10.A., neither party will commence or pursue any litigation on any claim that is or was subject to arbitration under this Agreement. 

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(m)    All aspects of any arbitration procedure under this Agreement, including the hearing and the record of the proceedings, are confidential and will not be open to the public, except to the extent the parties agree otherwise in writing, or as may be appropriate in any subsequent proceedings between the parties, or as may otherwise be appropriate in response to a governmental agency or legal process or as may be required to be disclosed by Employer pursuant to applicable law, rule or regulation to which Employer is subject, including requirements of the Securities and Exchange Commission and any stock exchanges on which Employer’s securities are listed. 
11.    Covenant Not to Compete, No Interference; No Solicitation.  For purposes of this Section 11 only, the: term “Employer” shall mean, collectively, Employer and each of its Affiliates.  At all times during the term of this Agreement and during the one year period following cessation of Employee’s employment with Employer for any reason (or if this period is unenforceable by law, then for such period as shall be enforceable), Employee will not engage in any business offering services related to the current business of Employer, whether as a principal, partner, joint venture, agent, employee, salesman, consultant, director or officer, where such position would involve Employee in any business activity in competition with Employer.  This restriction will be limited to the geographical area where Employer is then engaged in such competing business activity or to such other geographical area as a court shall find reasonably necessary to protect the goodwill and business of Employer. 
During the one year period following cessation of Employee’s employment with Employer for any reason (or if this period is unenforceable by law, then for such period as shall be enforceable), Employee will not interfere with or adversely affect, either directly or indirectly, Employer’s relationships with any person, firm, association, corporation or other entity which is known by Employee to be, or is included on any listing to which Employee had access during the course of employment, as a customer, client, supplier, consultant or employee of Employer and that Employee will not divert or change, or attempt to divert or change, any such relationship to the detriment of Employer or to the benefit of any other person, firm, association, corporation or other entity. 
During the one year period following cessation of Employee’s employment with Employer for any reason (or if this period is unenforceable by law, then for such period as shall be enforceable), Employee shall not, without the prior written consent of Employer, accept employment, as an employee, consultant or otherwise, with any company or entity which is a supplier of Employer at any time during the final year of Employee’s employment with Employer. 
Employee will not, during or at any time within one year after the cessation of Employee’s employment with Employer, induce or seek to induce any other employee of Employer to terminate his or her employment relationship with Employer. 

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Employee acknowledges and agrees that the covenants, restrictions, agreements and obligations set forth herein are founded upon valuable consideration and, with respect to the covenants, restrictions, agreements and obligations set forth in this Section 11, are reasonable in duration and geographic scope.  The time period and geographical area set forth in this Section 10 are each divisible and separable, and, in the event that the covenants not to compete and/or not to divert business or employees contained therein are judicially held invalid or unenforceable as to such time period and/or geographical area, they will be valid and enforceable in such geographical area(s) and for such time period(s) which the court determines to be reasonable and enforceable.  Employee agrees that in the event that any court of competent jurisdiction determines that the above covenants are invalid or unenforceable to join with Employer in requesting such court to construe the applicable provision by limiting or reducing it so as to be enforceable to the extent compatible with the then applicable law.  Furthermore, it is agreed that any period of restriction or covenant hereinabove stated shall not include any period of violation or period of time required for litigation or arbitration to enforce such restrictions or covenants. 
12.    Goodwill.  During the term of this Agreement and thereafter, Employee will not disparage Employer or any of its Affiliates in any way which could adversely affect the goodwill, reputation and business relationships of Employer or any of its Affiliates with the public generally, or with any of their customers, suppliers or employees, and Employer will not disparage Employee.  Employee understands and agrees that Employer shall be entitled to make any such public disclosures as are required by applicable law, rule or regulation regarding Employee, including termination of Employee’s employment with Employer, and that any public disclosures so made by Employer and other statements materially consistent with such public disclosures shall not be restricted in any manner by this Section 12. 
13.    Termination. 
A.    (i)    Employer or Employee may terminate this Agreement upon Employee’s failure or inability to perform the services required hereunder, because of any physical or mental infirmity for which Employee receives disability benefits under any Disability Plans, over a period of one hundred twenty consecutive working days during any twelve consecutive month period (a “Terminating Disability”). 
(ii)    If Employer or Employee elects to terminate this Agreement in the event of a Terminating Disability, such termination shall be effective immediately upon the giving of written notice by the terminating party to the other. 
(iii)    Upon termination of this Agreement on account of Terminating Disability, Employer shall pay Employee Employee’s accrued compensation hereunder, whether Base Salary, Bonus or otherwise (subject to offset for any amounts received pursuant to the Disability Plans), to the date of termination.  In the event of a Terminating Disability, Employer also shall provide Employee with disability benefits and all other benefits according to the provisions of the applicable Disability Plans and any other Employer plans in which Employee is then participating.  Furthermore, Employee shall continue to accrue service as an employee in accordance with the provisions of the applicable Disability Plans and pension plan(s), and for purposes of vesting under any outstanding incentive awards granted to Employee, as may be set forth in the applicable incentive plan or related award letter. 
(iv)    If the parties elect not to terminate this Agreement upon an event of a Terminating Disability and Employee returns to active employment with Employer prior to such a termination, or if such disability exists for less than one hundred twenty consecutive working days, the provisions of this Agreement shall remain in full force and effect. 

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B.    This Agreement terminates immediately and automatically on the death of Employee, provided, however, that Employee’s estate shall be paid Employee’s accrued compensation hereunder, whether Base Salary, Bonus or otherwise, to the date of death. 
C.    Employer may terminate this Agreement immediately, upon written notice to Employee, for Cause.  For purposes of this Agreement, Employer shall have “Cause” to terminate this Agreement only if Employer’s Board of Directors determines that there has been fraud, misappropriation, embezzlement or misconduct constituting serious criminal activity on the part of Employee.  Upon termination for Cause, Employee shall be entitled to receive only Employee’s accrued compensation hereunder, whether Base Salary, Bonus or otherwise, to the date of termination. 
D.    Employer may terminate this Agreement immediately, upon written notice to Employee for any reason other than those set forth in Sections 13.A., B. and C., provided, however, that Employer shall have no right to terminate this Agreement under this Section 13.D. within one year after a Change in Control.  In addition, Employee may terminate this Agreement immediately, upon written notice to Employer, as a result of a Constructive Termination, provided, however, that Employee shall have no right to terminate this Agreement under this Section 13.D. within one year after a Change in Control.  In the event of a termination of this Agreement by Employer, or by Employee as a result of a Constructive Termination, under this Section 13.D.: 
(i)    within five days after (and not before) the date which is six months after Employee’s termination of employment with Employer, Employer shall pay Employee in a lump sum cash payment an amount equal to two times the Employee’s annual Base Salary rate in effect at the time of the termination of this Agreement;
(ii)    for purposes of any outstanding stock option issued by Employer to Employee, outstanding restricted stock issued by Employer to Employee or other outstanding incentive award granted by Employer to Employee, Employee’s employment with Employer shall not be deemed to have terminated until the end of the Current Term;
(iii)    an amount equal to the sum of (a) any forfeitable benefits of Employee under any nonqualified (i.e., not qualified under Code Section 401(a)) pension, profit sharing, savings or deferred compensation plan of Employer or any Affiliate which would have vested prior to the end of the Current Term if this Agreement had not terminated, plus (b) any additional vested benefits which would have accrued for Employee under any nonqualified defined benefit pension plan if this Agreement had not terminated prior to the end of the Current Term and if Employee’s annual Base Salary and annual Bonus target had neither increased nor decreased after such termination, shall be payable by Employer at the same time and in the same manner as such benefits would have been paid under such plan or plans had such benefits become vested and accrued under such plan or plans at the time of the termination of this Agreement;
(iv)    an amount equal to the sum of (a) any forfeitable benefits of Employee under any qualified (i.e., qualified under Code Section 401(a)) pension, profit sharing, 401(k) or deferred compensation plan of Employer or any Affiliate which would have vested prior to the end of the Current Term if this Agreement had not terminated, plus (b) any additional vested benefits which would have accrued for Employee under any qualified defined benefit pension plan if this Agreement had not terminated prior to the end of the Current Term and if Employee’s annual Base Salary and annual Bonus target had neither increased nor decreased after such termination, shall be paid by Employer from its general assets (and not under such plan or plans) in one lump sum within five days after (and not before) the date which is six months after Employee’s termination of employment with Employer; and 

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(v)    for the remainder of the Current Term, Employer shall continue to provide Employee with medical, dental, vision and group term life coverage comparable to the medical, dental, vision and group term life coverage in effect for Employee immediately prior to the termination of this Agreement (with the cost of such benefits shared between Employee and Employer on a basis comparable to the cost-sharing of such benefits immediately prior to the termination of this Agreement), and, to the extent that Employee would have been eligible for any post-retirement medical, dental, vision or group term life benefits from Employer if Employee had continued in employment through the end of the Current Term, Employer shall provide such post-retirement benefits to Employee after the end of the Current Term. 
E.    This Agreement shall terminate automatically in the event and at the time that both there is a Change in Control and either (1) Employee elects to terminate his employment with Employer within one year after the Change in Control as a result of a Constructive Termination or (2) Employee’s employment with Employer is actually terminated by Employer within one year after the Change in Control for any reason other than those set forth in Sections 13.A., B. and C.  In the event of a termination of this Agreement under this Section 13.E.:   
(i)    within five days after (and not before) the date which is six months after Employee’s termination of employment with Employer, Employer shall pay Employee in a lump sum cash payment an amount equal to the product obtained by multiplying (a) the sum of the annual Base Salary rate in effect at the time of the termination of this Agreement and the annual Bonus target in effect at the time of such termination by (b) 2.5;
(ii)    all outstanding stock options and other incentive awards issued by Employer to Employee that are not vested and exercisable at the time of the termination of this Agreement shall become immediately vested and exercisable (and Employee shall be afforded the opportunity to exercise them until the earlier of (a) the latest date, determined in accordance with the terms of such stock options or awards, that would apply if such stock options or awards had become vested and exercisable immediately before the termination of this Agreement or (b) the end of the Current Term and the restrictions applicable to all outstanding restricted stock issued by Employer to Employee shall lapse upon the termination of this Agreement; 
(iii)    an amount equal to the sum of (a) any forfeitable benefits of Employee under any nonqualified (i.e., not qualified under Code Section 401(a)) pension, profit sharing, savings or deferred compensation plan of Employer or any Affiliate which would have vested prior to the end of the Current Term if this Agreement had not terminated, plus (b) any additional vested benefits which would have accrued for Employee under any nonqualified defined benefit pension plan if this Agreement had not terminated prior to the end of the Current Term and if Employee’s annual Base Salary and annual Bonus target had neither increased nor decreased after such termination, shall be payable by Employer at the same time and in the same manner as such benefits would have been paid under such plan or plans had such benefits become vested and accrued under such plan or plans at the time of the termination of this Agreement; 
(iv)    an amount equal to the sum of (a) any forfeitable benefits of Employee under any qualified (i.e., qualified under Code Section 401(a)) pension, profit sharing, 401(k) or deferred compensation plan of Employer or any Affiliate which would have vested prior to the end of the Current Term if this Agreement had not terminated, plus (b) any additional vested benefits which would have accrued for Employee under any qualified defined benefit pension plan if this Agreement had not terminated prior to the end of the Current Term and if Employee’s annual Base Salary and annual Bonus target had neither increased nor decreased after such termination, shall be paid by Employer from its general assets (and not under such plan or plans) in one lump sum within five days after (and not before) the date which is six months after Employee’s termination of employment with Employer; and

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(v)    for the remainder of the Current Term, Employer shall continue to provide Employee with medical, dental, vision and group term life coverage comparable to the medical, dental, vision and group term life coverage in effect for Employee immediately prior to the termination of this Agreement (with the cost of such benefits shared between Employee and Employer on a basis comparable to the cost-sharing of such benefits immediately prior to the termination of this Agreement), and, to the extent that Employee would have been eligible for any post-retirement medical, dental, vision or group term life benefits from Employer if Employee had continued in employment through the end of the Current Term, Employer shall provide such post-retirement benefits to Employee after the end of the Current Term.  
F.    Employee may resign upon 60 days’ prior written notice to Employer.  In the event of a resignation under this Section 13.F., this Agreement shall terminate and Employee shall be entitled to receive Employee’s Base Salary through the date of termination, any Bonus earned but not paid at the time of termination and any other vested compensation or benefits called for under any compensation plan or program of Employer. 
G.    Upon termination of this Agreement as a result of an event of termination described in this Section 13 and except for Employer’s payment of the required payments under this Section 13 (including any Base Salary accrued through the date of termination, any Bonus earned for the year preceding the year in which the termination occurs and any nonforfeitable amounts payable under any employee plan), all further compensation under this Agreement shall terminate.  Employee further agrees that as a condition precedent to Employee’s receipt of payments under this Section 13 (other than any Base Salary accrued through the date of termination, any Bonus earned for the year preceding the year in which the termination occurs and all payments pursuant to Section 13.E.), upon the request of Employer and by a reasonable deadline set by Employer (to ensure that payments can be made by the dates specified in this Section 13 following the expiration of the time for revocation of such release as permitted by law), Employee will execute and not revoke a release of claims against Employer, which release shall contain customary and appropriate terms and conditions as determined in good faith by Employer. 
H.    The termination of this Agreement shall not amend, alter or modify the rights and obligations of the parties under Sections 7, 8, 9, 10, 11 and 12 hereof, the terms of which shall survive the termination of this Agreement.  
I.    To the extent provided below, the following provisions apply under this Section 13 and the other provisions of the Agreement.
(i)    Notwithstanding any other provision of this Agreement, for purposes of Section 13.D “Current Term” means the one year period beginning at the time of the termination of this Agreement and for purposes of Section13.E., “Current Term” means the two year period beginning at the time of the termination of this Agreement.
(ii)    For purposes of Sections 13.D. and 13.E., “Change in Control” means a Change in Control as defined under the Cincinnati Bell Inc. Executive Deferred Compensation Plan (as such plan is amended and restated effective as of January 1, 2005 and as it may thereafter be amended).
(iii)    For purposes of Section 13.D. and 13.E., “Constructive Termination” shall be deemed to have occurred if, without Employee’s consent, there is a material reduction by Employer in Employee’s authority, reporting relationship or responsibilities, there is a reduction by Employer in Employee’s Base Salary or Bonus target or Employee is required by Employer to relocate from the Greater Cincinnati, Ohio Area by 50 or more miles.

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(iv)    When an amount (referred to in this Section 13.I.(iv) as the “principal sum”) that is payable under Section 13.D.(i), 13.D.(iv), 13.E.(i), or 13.E.(iv) within five days after the date which is six months after Employee’s termination of employment with Employer is paid, such payment shall also include an amount that is equal to the amount of interest that would have been earned by such principal sum for the period from the date of Employee’s termination of employment with Employer to the date which is six months after Employee’s termination of employment had such principal sum earned interest for such period at an annual rate of interest of 3.5%.  
(v)    To the extent that any of the benefits applicable to medical, dental and vision coverage provided to Employee under Section 13.D.(v) or 13.E.(vi) (referred to in this Section 13.I. as “healthcare plan benefits”) are subject to federal income taxation, the following conditions shall apply:
(a)    the amount of healthcare plan benefits provided or paid during any tax year of Employee under Section 13.D.(v) or 13.E.(vi) shall not affect the amount of healthcare plan benefits that are provided or eligible for payment in any other tax years of Employee (disregarding any limit on the amount of medical expenses, as defined in Code Section 213(d), that may be paid or reimbursed over some or all of the period in which such coverage is in effect because of a lifetime, annual or similar limit on any covered person’s expenses that can be paid or reimbursed under Employer’s health care plans under which the terms of such coverage is determined);
(b)    the payment or reimbursement of an expense for healthcare plan benefits that is eligible for payment or reimbursement shall not be made prior to the date immediately following the date which is six months after Employee’s termination of employment with Employer and shall in any event be made no later than the last day of the tax year of Employee next following the tax year of Employee in which the expense is incurred; and
(c)    Employee’s right to healthcare plan benefits shall not be subject to liquidation or exchange for any other benefit.
(vi)    For purposes of this Agreement (including but not limited to Sections 13.D.(iii), (iv) and (v) and 13.E.(iii), (iv), and (v)), any reference to the termination of this Agreement or to the termination of Employee’s employment with Employer shall mean and require that, as of the date of such termination, Employee’s services for Employer and its Affiliates shall have completely ceased or that Employee shall have otherwise separated from service with Employer and its Affiliates within the meaning of Treasury Regulation Section 1.409-1(h).
14.    Assignment.  As this is an agreement for personal services involving a relation of confidence and a trust between Employer and Employee, all rights and duties of Employee arising under this Agreement, and the Agreement itself, are non-assignable by Employee. 
15.    Notices.  Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if delivered personally or by certified mail to Employee at Employee’s place of residence as then recorded on the books of Employer or to Employer at its principal office. 
16.    Waiver.  No waiver or modification of this Agreement or the terms contained herein shall be valid unless in writing and duly executed by the party to be charged therewith.  The waiver by any party hereto of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by such party. 

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17.    Governing Law.  This agreement shall be governed by the laws of the State of Ohio and, to the extent applicable, federal law.  
18.    Entire Agreement.  This Agreement contains the entire agreement of the parties with respect to Employee’s employment by Employer.  There are no other contracts, agreements or understandings, whether oral or written, existing between them except as contained or referred to in this Agreement. 
19.    Severability.  In case anyone or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or other enforceability shall not affect any other provisions hereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provisions have never been contained herein. 
20.    Successors and Assigns.  Subject to the requirements of Paragraph 14 above, this Agreement shall be binding upon Employee, Employer and Employer’s successors and assigns. 
21.    Confidentiality of Agreement Terms.  The terms of this Agreement shall be held in strict confidence by Employee and shall not be disclosed by Employee to anyone other than Employee’s spouse, Employee’s legal counsel and Employee’s other advisors, unless required by law.  Further, except as provided in the preceding sentence, Employee shall not reveal the existence of this Agreement or discuss its terms with any person (including but not limited to any employee of Employer or its Affiliates) without the express authorization of the President of Employer, provided that Employee shall advise any prospective new employer of the existence of Employee’s non-competition, confidentiality and similar obligations under this Agreement.  To the extent that the terms of this Agreement have been disclosed by Employer, in a public filing or otherwise, the confidentiality requirements of this Section 21 shall no longer apply to such terms. 

12

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
	
			
	CINCINNATI BELL INC.
	 
	EMPLOYEE

	 
	 
	 

	By:  /s/ Theodore H. Torbeck
	 
	/s/ Christopher J. Wilson

	Title:  Chief Executive Officer
	 
	 

	Date: February 23, 2015
	 
	Date: February 23, 2015

13Exhibit 4.5

 

Matching Program

 

2015 Cycle

 

Rewarding Long Term Sustainable Performance

 

Important notice: The concession of the Program and the definition of all its conditions are a prerogative of the company, and participation in this program is completely optional and voluntary to employees, once all of the eligibility criteria are met and all conditions for participation are formally accepted by the employee, and mandatory for Vale’s Executive Directors and CEO. The purchase of shares is characterized as a risky investment, since it represents the investment of funds in variable income (e.g. publicly traded shares). By choosing to enter the program, the employee recognizes and takes risks, such as: capital market volatility, share liquidity and oscillation of their amounts in the stock exchange. The combination of these risks may bring earnings or losses to the employee who enters the program.

 

The purchase and the sale of the shares issued by Vale S.A., after a certain time, as well as the profits (dividends, interests, etc) earned by each employee between the purchase and the sale, may have tax consequences, especially the eventual incurrence of personal income taxes, if there is a positive result from the sale of the shares. We clarify that the guidelines and eligibility criteria contained herein are subjected to changes and interpretation dynamics from country to country. The Human Resources Centers will provide generic and relevant information about these consequences and each employee should be responsible for evaluating their specific individual financial condition, and for consulting their own accountants/financial advisors to ensure they are aware of all of the financial implications linked to participating in this Program.

 

Human Resources

 

Variable Pay Department | RH CoE

 

January, 2015

 

 

	
I.
    	
Table of Contents
    	
 
    
	
 
    	
 
    	
 
    
	
I.
    	
Table of Contents
    	
2
    
	
 
    	
 
    	
 
    
	
II.
    	
About the   Matching Program | 2015 Cycle
    	
3
    
	
 
    	
 
    	
 
    
	
III.
    	
Eligibility   and Investment Options
    	
4
    
	
 
    	
 
    	
 
    
	
III.1.                      Fundamental Conditions   for Eligibility to the Program
    	
4
    
	
 
    	
 
    
	
III.2.                    Rules for Placing   the Executives in Groups A, B or C
    	
4
    
	
 
    	
 
    	
 
    
	
IV.
    	
How to Join the Program
    	
6
    
	
 
    	
 
    	
 
    
	
IV.1.                     Enrollment Form
    	
6
    
	
 
    	
 
    
	
IV.2.                     Opening of account   and/or Updating the Registration Information with the Brokerage Firms
    	
6
    
	
 
    	
 
    
	
IV.3.                     Funds for Investment in   the Program
    	
8
    
	
 
    	
 
    	
 
    
	
V.
    	
Acquisition   of Shares or ADRs with the Investment
    	
9
    
	
 
    	
 
    	
 
    
	
V.1.                          Acquisition Date and Type of Shares
    	
9
    
	
 
    	
 
    
	
V.2.                          Calculation of the Number of Shares or ADRs   Acquired
    	
9
    
	
 
    	
 
    
	
V.3.                          Administration of the   Acquired Shares or ADRs
    	
9
    
	
 
    	
 
    
	
V.4.                          Brokerage Fees
    	
10
    
	
 
    	
 
    
	
V.5.                          Dividends and Interests on Equity
    	
10
    
	
 
    	
 
    
	
V.6.                          Conditions for Staying in the Program
    	
10
    
	
 
    	
 
    	
 
    
	
VI.
    	
Reward of   Matching at the End of the Cycle
    	
11
    
	
 
    	
 
    	
 
    
	
VII.
    	
Specificities   Regarding Expatriate and/or Repatriate Employees
    	
11
    
	
 
    	
 
    	
 
    
	
VIII.
    	
Early   Payment for Employees Terminated During the Cycle of the Program
    	
12
    
	
 
    	
 
    	
 
    
	
VIII.1.           Resignation or Dismissal for Cause
    	
12
    
	
 
    	
 
    
	
VIII.2.           Dismissal by Vale / Retirement
    	
12
    
	
 
    	
 
    
	
VIII.3.           Death or Retirement for Disability
    	
12
    
	
 
    	
 
    
	
VIII.4.           Executives from Associated or Subsidiary Companies   that Undergo Change of Control or Vale’s Divestiture
    	
12
    
	
 
    	
 
    
	
VIII.5.           Summary Table of Conditions for Early Payment   (Before the End of the Cycle)
    	
13
    
	
 
    	
 
    	
 
    
	
IX.
    	
Main Dates   of the 2015 Cycle
    	
14
    
	
 
    	
 
    	
 
    
	
Annex A: List of Participating Companies
    	
15
    
	
 
    	
 
    
	
Annex B: Methodology For Currency Conversion
    	
19
    
	
 
    	
 
    
	
For   Acquisition of Shares/ADRs
    	
19
    
	
 
    	
 
    
	
For   Payments Before the End of the Cycle
    	
19
    
	
 
    	
 
    
	
Annex C: Methodology for Calculating the Average Price of   Shares
    	
20
    
	
 
    	
 
    
	
Annex E: Distribution for Placement of the Eligible   Executives
    	
22
    

 

2

 

II.                                   About the Matching Program | 2015 Cycle

 

Matching is a long term incentive program that composes the total reward of Vale’s executives and its associated/subsidiary companies’ employees that also participate in the program(1) according to rules and conditions set forth herein. The program aims to:

 

·                  Encourage the sense of “ownership”;

 

·                  Increase the capacity of retention and attraction of talents; and

 

·                  Reinforce the culture of sustainable performance and skill development of our executives.

 

Fundamental characteristics of the program:

 

·                  The level of investment with which an executive can enroll depends on:

 

(i) the position of the executive in the last cycle of Career & Succession (C&S);

 

(ii) the hierarchical level of the executive in the company on December 31st, 2014(2);

 

(iii) the location where the executive is based on and/or the group’s company he/she is active at, both on December 31st, 2014(2);

 

(iv) the base salary of the executive on December 31st, 2014(2).

 

·                  The program has duration of three years (vesting): it begins in March 18th, 2015 and it ends in March, 2018(3).

 

Important note:

 

Note that the rules described in this document are valid only for the Matching Program that starts in 2015(4).

 

(1)  See the attached list of companies whose executives may be eligible to the Matching Program | 2015 Cycle. (Annex A: List of Participating Companies).

(2)  As registered in payroll systems in that date. 1The base/basic salary adopted must comply with the definition of “base salary” of each location.

(3)  The closing date of the program may be reviewed if Vale is in a restricted negotiation period (“black-out period”), as stipulated by Vale ́s Securities Trading Policy.

(4)  The concession of the Matching Program, in the cycle starting in 2015, does not oblige Vale or its associated/subsidiary companies to grant this incentive, or any other similar program, in future years. Vale reserves the right to examine and determine the eventual concession of similar incentives in subsequent years. Thus, employee’s participation in the 2015 Cycle shall not generate expectations of future entitlement to similar programs.

 

3

 

III.                              Eligibility and Investment Options

 

III.1.                    Fundamental Conditions for Eligibility to the Program

 

The executives who meet all of the following conditions will be eligible to participate in the Matching | 2015 Cycle(5):

 

·                  He/she must be working for Vale or one of the participating companies (see Annex A: List of Participating Companies) on December 31st, 2014, and occupying one of the below positions:

 

(i)                 CEO;

 

(ii)              Executive Director;

 

(iii)           Director (or the equivalent in the Technical Career);

 

(iv)          Manager (or the equivalent in the Technical Career); and

 

(v)             Project Leader.

 

·                  He/she must be an active employee of Vale, or one of the participating companies at the time of the shares acquisition;

 

·                  He/she must accept all the conditions to participate in the Program through the formal enrollment option (Enrollment Form), within the deadline established.

 

III.2.                    Rules for Placing the Executives in Groups A, B or C

 

Investment Options

 

If the executive chooses to participate in the Matching | 2015 Cycle, there are two options for investment:

 

(i)                 Standard Option; and

 

(ii)              Extra Option (option only granted to employees with potential and performance as described below, being mandatory for the Executive Directors and CEO).

 

In both possibilities, Standard and Extra, the investment amount varies by hierarchical level and by region or participating company (see Annex A: List of Participating Companies). The amount is defined according to the following criteria:

 

(i)                 Pre-set amount based on the base salary of the executive on December 31st, 2014(6); and

 

(ii)              Time proportion, considering the number of months the executive worked at Vale, or any participating company, in the course of 2014.

 

Placement of the Executives in Groups A, B or C

 

In addition to meeting the main conditions, the executives must meet specific conditions to be classified into one of the three groups, A, B, or C, shown in Table III.1 below:

 

(5)  Situations not covered in this Manual should be evaluated and defined case by case by the Matching Program Management Committee, composed of the CFO and the HR Executive Director.

(6)  As registered in payroll systems in that date. The base/basic salary adopted must comply with the definition of “base salary” of each location.

 

4

 

Table III.1: Eligibility to the different investment options.

 

	
Group
    	
 
    	
Who should be placed in the group
    	
 
    	
Investment options
    
	
Group A
    	
 
    	
·    Executives who meet the fundamental conditions (see section III.1)   and are deemed (according to the last C&S evaluation) as employees with   recognized potential and solid or high performance(7).
    	
 
    	
·    These executives have the   following investment options in the Matching | 2015 Cycle:

·    Extra   Option related to their level and region/company;

·    Standard   Option related to their level and region/company; or

·    Do not   invest in the program.
    
	
Group B
    	
 
    	
·    Executives who meet the   fundamental conditions (see section III.1) and are deemed (according to the   last C&S evaluation) as employees at potential and solid or high   performance; and

·    Executives who meet the fundamental conditions (see section III.1)   and have been recently hired (not evaluated in the last C&S), recently   shifted(8) or were evaluated in the C&S in a position hierarchically   different to the one they are entitled to the program(9).
    	
 
    	
·    These executives have the   following investment options in the Matching | 2015 Cycle:

·    Standard   Option related to their level and region/company; or

·    Do not   invest in the program.
    
	
Group C
    	
 
    	
·    Executives who meet the fundamental conditions (see section III.1)   and were evaluated (according to the last C&S evaluation) as   low-performance employees, regardless his/her potential.
    	
 
    	
·    These executives are not eligible to invest in the program.
    

 

Each approving manager must ensure that, amongst those eligible in his/her approval scope (executives from Groups A and B), only a maximum of 30%, are classified into Group A (for reasons of numerical rounding, the distribution indicated in Annex E: Distribution for Placement of the Eligible Executives must be used). The approving manager varies from executive to executive, as shown in the following table:

 

Table III.2: Approving manager for each hierarchical level.

 

	
Hierarchical level of   the eligible executive
    	
 
    	
Approving manager
    
	
·                  Managers (and equivalent in the Technical Career); and

·                  Project Leaders (except Executive Project Leaders).
    	
 
    	
·                  Immediate Director or Executive Project Leader.
    
	
·                  Directors (and equivalent in the Technical Career); and

·                  Executive Project   Leaders.
    	
 
    	
·                  Immediate Director or Executive Director.
    

 

(7)  Executives with solid or high performance are the ones evaluated as such according to the most recent C&S cycle, and executives with recognized potential are those who have been evaluated with potential of “1 to 3 years” or potential of “0 to 1 year” according to the most recent C&S cycle.

(8)  Recent shiftings: changes that took place after June 31st, 2014 and represent a rise in career of, at least, two (2) salary grades.

(9)  Cases in which this occurs: (i) evaluated in the C&S as Staff or Supervisor and eligible to the program as Manager (or equivalent); (ii) evaluated in the C&S as Manager (or equivalent) and eligible to the program as Director (or equivalent).

 

5

 

IV.          How to Join the Program

 

IV.1.                     Enrollment Form

 

The adhesion of the executive to the program will happen through his/her formal acceptance of the guidelines and rules of the Matching | 2015 Cycle by signing (electronically or physically) the Enrollment Form (except for Executive Directors, who don ́t have an enrollment document, since their participation is mandatory), and by submitting the required documentation for registration or re-registration in the stock market regulatory bodies, and for opening their brokerage account, as follows:

 

·                  Bradesco, for the executives who are in Brazil when they sign the Enrollment Form;

 

·                  JP Morgan, for the executives who are outside Brazil when they sign the Enrollment Form.

 

IV.2.                     Opening of account and/or Updating the Registration Information with the Brokerage Firms

 

For Executives in Brazil on December 31st, 2014

 

Executives who receive their (monthly) fixed remuneration in Brazil, must complete/update the forms received from Bradesco and send them as follows:

 

(i)                Registration of new executives

 

Executives who are not currently registered with Bradesco shall provide the following documentation:

 

·                  Bradesco Enrollment Form

 

·                  Intermediation and Sub-custody Contract

 

·                  Copy of documents (ID or Driver’s License with CPF (Individual Taxpayer’s Roll))

 

·                  Copy of proof of residence (this is the address where participants will receive important information regarding their account)

 

The Enrollment Form and the Intermediation and Sub-custody Contract must be filled in, signed and submitted (original documents), along with the copy of the other documents listed above, by the date informed by your local HR, to Bradesco, to the following address: Avenida Paulista, 1450 - 7th Floor - CEP: 01310-100, to Bruna Sampaio and Jessica Fanini.

 

Questions related to the documentation should be directly addressed with Bradesco, through the email address comercial@bradescobbi.com.br, or the phone number +55 11 2178 5088.

 

Important note:

 

The Enrollment Form and the Intermediation and Sub-custody Contract must have, in addition to the participant’s signature, the grant of an authorizer from Vale’s HR or from its associated and subsidiary companies (procurator) in order to be accepted by the brokerage. The Enrollment Form, on the other hand, must have the signature of a witness, besides the signature of the participant and the grant mentioned above.

 

(ii)            Information revalidation of the executives already registered

 

Executives that are active in the company and willing to participate in the program must update, every 2 (two) years, their registration information. Therefore, the participant whose registration has been performed/revalidated 2 (two) years ago or more, will receive from Bradesco, by email, their registration form, which must be updated/revalidated and submitted to the brokerage firm, highlighting in the body of the email, 

 

6

 

the updates in the Registration Form, if applicable, otherwise, the executive must return the email with the file stating that there was no change in their data to date, with the documents listed below. In order to be accepted by the brokerage, the information should be sent through the corporate business email (this will be the evidence for revalidation of the data). The documents necessary for the revalidation are listed below:

 

·                  Enrollment Form

 

·                  Copy of documents (ID or Driver’s License with CPF - Individual Taxpayer’s Roll)

 

·                  Copy of proof of residence (this is the address where participants will receive important information regarding their account).

 

Important note:

 

The information revalidation process is solely the responsibility of the participant. The executive that does not send the registration information within the deadline set by the broker may lose the right to participate in the program

 

(iii)        Share status consultation via internet

 

For online consultation about transactions and number of shares, the participant may access the web address http://www.myportfolio.com.br/bradesco/ at anytime. Questions related to online access should be sorted out through the email address comercial@bradescobbi.com.br, or the phone number +55 11 2178 5088.

 

For executives outside Brazil on December 31st, 2014

 

Executives who receive their fixed remuneration outside Brazil (including those on international assignment) will be contacted by their local HR Center for filling/updating their enrollment information and will be required to submit it as below:

 

(i)                Registration of new employees

 

The participants will receive the following documents from their local HR:

 

·                  Personal information sheet

 

·                  W-8BEN Form

 

Participants’ personal information sheet shall be filled in and submitted, via e-mail, to JP Morgan.

 

New participants must also fill in the W-8BEN Form (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding), referring to the income declaration, in case of receiving dividends or selling ADRs (American Depositary Receipt). If this form is not completed, the participant may be subject to pay taxes under his/her own responsibility.

 

The W-8BEN Form (original document) shall be filled in, dated, signed, and mailed to the brokerage firm.

 

Important note:

 

The W-8BEN Form is valid for 3 years and the brokerage firm will contact each participant by email about its update.

 

7

 

(ii)            Information revalidation of the employees already registered

 

Annually, before the beginning of each Cycle, JP Morgan will request the validation, via e-mail, of the personal information of each executive participating in the Matching Program. The following information will need to be revalidated:

 

·                  Full address (this is the address where the participant will receive important information related to his/her account)

 

·                  Option for reinvesting, or not, the dividends in ADRs

 

Questions related to the required documentation, or the sale of ADRs, should be directly addressed with JP Morgan, contact person Marcos Rivero, through the email address marcos.rivero@jpmorgan.com, or the phone number +1 302 552 0257.

 

Participants who are outside the United States and wish to have general information about their account (registration, ADRs balance, dividends, etc.), may call 800 990 1135 (within the U.S.) or +1 651 453 2128 (outside the U.S.).

 

IV.3.                     Funds for Investment in the Program

 

The eligible executive, who voluntarily chooses to invest in this program, is responsible for funding the acquisition of the shares.

 

In order to facilitate the availability of funds for the participant to invest in the Matching | 2015 Cycle, Vale or the associated/subsidiary company will use funds from the Short-Term Variable Remuneration (AIP — Annual Incentive Plan), to be paid to the executive in 2015 (related to the year of 2014), via the automatic payroll deduction of the amount chosen by the executive to join the program. The deduction will be performed under the condition that the net amount of the Short-Term Variable Remuneration (AIP) is equal to or greater than the amount of the adhesion to the program, to be deducted, and that all of the conditions of enrollment have been formally accepted by him/her.

 

If the net amount of the Short-Term Variable Remuneration (AIP) of the employee is lower than the amount of his/her investment for joining the program, Vale or the associated/subsidiary company will not perform its deduction. In this case, the participant will be informed by local HR, that in order to participate in the Matching | 2015, they will need to carry out a wire transfer of the total amount of the investment for his/her enrollment to the program (amount in cash equivalent to the investment option - Standard or Extra - chosen by him/her and formalized through the signing of the Enrollment Form), until the date informed by the local HR, in local currency, to a specific account to be indicated by Vale or the associated/subsidiary company.

 

Important note:

 

Executives living abroad who have tax registration in Brazil (CPF) should take special care to ensure that the registry data reported to the broker reflect the current status of the tax situation in the Brazilian treasury department, ie, domiciled in Brazil or outside Brazil. Any discrepancy between the registers may cause tax implications to the executive.

 

8

 

V.            Acquisition of Shares or ADRs with the Investment

 

V.1.                          Acquisition Date and Type of Shares

 

The Matching | 2015 Cycle starts on March 18th, 2015 upon the purchase of class “A” preferred shares(10) or ADRs(11) backed in preferred shares of same class, and issued by Vale(12) through the authorized brokerage firms for each location (in Brazil, Bradesco; in other countries, JP Morgan). The executives located in Brazil shall purchase VALE5 shares, while executives outside Brazil shall buy ADRs VALE.P.

 

 

V.2.                          Calculation of the Number of Shares or ADRs Acquired

 

For the executives that acquire shares at BM&FBOVESPA, the brokerage firm in Brazil (Bradesco) will purchase the largest number of whole shares, and the remaining funds shall be wired back to the executive bank account as informed in the Bradesco Enrollment Form(13). For the employees that acquire Vale ADRs at NYSE, the brokerage firm in the USA (JP Morgan) has a procedure that allows the purchase of fractional numbers of shares, therefore, no remaining funds will be returned.

 

The brokerage firm will execute the purchase of shares at market prices in March, 2015

 

(i)                Example of calculation for executives that acquire shares at BM&FBOVESPA:

 

·                  Funds remitted = R$ 50,000.00

 

·                  Hypothetical share price = R$ 30.00

 

·                  Number of shares purchased = 1,666

 

·                  Remaining funds to be wired to the Employee’s bank account = R$ 20.00

 

(ii)            Employee that has acquired Vale ADR’s at NYSE

 

·                  Funds remitted = $ 25,000.00

 

·                  Hypothetical share price = $ 15.50

 

·                  Number of shares purchased = 1,612.90

 

V.3.                          Administration of the Acquired Shares or ADRs

 

The brokerage firms will be responsible for the custody of shares and/or ADRs throughout the entire cycle of the program. Vale will be informed about any stock transaction made by the participants.

 

The executives may sell all or part of their shares and/or ADRs at any time. However, by doing so, they shall forfeit the right to receive the reward of the Matching | 2015 and shall also be responsible for any costs arising from such sale.

 

(10)  They offer: (a) priority in receiving dividends, which will be calculated according to Vale’s Bylaws’ Chapter VII, corresponding to (i) at least 3% (three per cent) of the amount of the stockholder’s equity, calculated based on the obtained financial statements that served as reference for the payment of dividends, or (ii) 6% (six per cent) on the portion of capital represented by this class of shares, whichever is the highest one among them; (b) the right to participate in distributed profits, on an equal basis with common shares, after the latter paid a dividend equal to the minimum established in accordance with subparagraph “a”; and (c) the right to participate in occasional bonuses, on an equal basis with common shares, observing the established priority for the dividends distribution.

(11)  American Depositary Receipt (ADR) is a negotiable title that represents shares of a non-US company that trades in the US financial markets.

(12)  ADRs based on class “A” preferential shares traded on the New York Stock Exchange.

(13)  Keeping the account information updated with the brokerage firm is responsibility of the executive.

 

9

 

V.4.                          Brokerage Fees

 

During the cycle, participants will not incur any administration or brokerage fee expenses (they will be defrayed by Vale or its associated/subsidiary companies).

 

The participants cannot acquire shares and/or ADRs for personal investment using the same account reserved for the Matching Program. Shares and/or ADRs purchased outside the program, through the same brokerage firms that administer the shares/ADRs of the Matching, should be acquired in a separate account and will be subject to the management and brokerage fees imposed by each brokerage firm, without any involvement of Vale.

 

V.5.                          Dividends and Interests on Equity

 

In the event of declaration of dividends and / or interest on equity by Vale:

 

·                  Executives who use a brokerage firm in Brazil will have the dividend amounts deposited into their respective bank accounts;

 

·                  Executives who use a brokerage firm outside of Brazil may receive a cheque in dollars or opt for automatic reinvestment in new ADRs.

 

The shares / ADRs acquired with amounts received as dividends and / or interest on equity will not be considered for Matching and therefore not accrue the balance of shares / ADRs to be awarded by the end of the cycle.

 

V.6.                          Conditions for Staying in the Program

 

In order to receive the Matching | 2015 reward, at the end of the cycle of 3 (three) years, the participating executives must meet the following conditions:

 

·                  They cannot sell and/or transfer shares from their account during the term of the cycle.

 

·                  Investments can only be performed in the Matching account with amounts received as dividends and/or interests on equity, when allowed by the brokerage. The Matching account shall be blocked for other share acquisitions, also subject to the provisions of section V.5 above.

 

·                  Transactions involving derivatives, that constitute short selling of Vale shares, are prohibited, as well as renting of purchased shares linked to the program to third parties, since the purpose of the plan is the exposure and alignment of executives to Vale listed shares during the period of the program.

 

·                  The transactions described above are also prohibited (involving derivatives or shares renting) for any Vale shares held by the executive, while he/she is an active participant, even if they were purchased outside of the program, while he is an active participant of the program. Any breach of this rule will be subject to consequences set out in Vale ́s Code of Ethics.

 

10

 

VI.          Reward of Matching at the End of the Cycle

 

At the end of the cycle, three years after the acquisition of shares, the executive’s balance will be checked with the brokerage firms. Participants who have kept, under their property, all of the shares/ADRs acquired in the beginning of the program, during the entirety of the term of the cycle, will be eligible to a reward equivalent (1:1) to the number of shares/ADRs purchased by the executive in the beginning of the cycle(14).

 

Some points should be taken into consideration at the time of payment:

 

·                  Vale or the associated/subsidiary company assumes the taxes on the payment of the participant’s reward (gross up).

 

·                  The area/company responsible for the executive costs at the time of the payment, will also be responsible for his/her Matching | 2015(15) reward.

 

VII.         Specificities Regarding Expatriate and/or Repatriate Employees

 

The responsibility for monitoring the Matching process (communication, calculations, validations etc.) of the eligible expatriates will be with their respective local HR (in case of expatriates / repatriates, Host Country HR). If the participant is expatriated before the cycle completion, the purchased shares will remain in his/her account with the brokerage firm that acquired the shares in the beginning of the cycle, as well as the shares/ ADRs received as dividends. As for the Matching | 2015 reward, the payment will be made by the company in the country where he/she is located (this rule are valid for all the cycles the executive is participating in).

 

If the participant starts and ends a cycle outside his/her home country, the shares/ADRs purchased abroad will remain in his/her account and the reward will be paid by the respective brokerage. If the executive is repatriated before the end of the cycle, he will be rewarded in the country where he/she is located at the time of the payment.

 

According to the Brazilian legislation, non-resident employees are not allowed to purchase shares in Brazil. Therefore, Brazilians expatriates must have their participation acquired in ADRs with the brokerage outside Brazil, JP Morgan.

 

(14)  In case of stock split of shares/ ADRs during the cycle, the number of shares / ADRs to be awarded will also be adjusted to reflect any stock split

(15)  The amount to be disbursed by the respective areas/companies must be budgeted and provisioned by them, according to the guidelines of the applicable budget cycles.

 

11

 

VIII.       Early Payment for Employees Terminated During the Cycle of the Program

 

The conditions below define what shall happen in case the executive leaves Vale or the associated/subsidiary companies before the conclusion of Matching | 2015 Cycle:

 

VIII.1.           Resignation or Dismissal for Cause

 

The executive shall not be eligible for the Matching | 2015 reward. However, he/she may sell or keep the shares/ADRs that were acquired with his/her funds. The employee will become responsible for the administration costs of the fund, if applicable, starting from the effective date of resignation or dismissal for cause.

 

VIII.2.           Dismissal by Vale / Retirement

 

The executive dismissed without cause or retired will receive his/her Matching | 2015 reward, in cash, proportionally to the number of months worked for Vale, or associated/subsidiary company (see Annex A: List of Participating Companies), during this cycle. The area/company responsible for the personnel expenses of the executive (e.g. base salary) at the time that he/she leaves Vale or the associated/subsidiary company, is also responsible for the payment of his/her Matching | 2015 reward. The employee may sell or keep the shares/ADRs that were acquired with his/her funds and he/she will become responsible for the administration costs of the fund, if applicable, starting from the effective date of dismissal.

 

VIII.3.           Death or Retirement due to Disability

 

The employee or his/her legal heirs will receive the full Matching | 2015 Cycle reward in cash. The area/company responsible for the personnel expenses of the executive (e.g. base salary) at the time of his/her death or retirement due to permanent disability, is also responsible for the payment of the Matching | 2015 reward to the executive or his/her legal heirs. They may also sell or keep the shares/ADRs acquired with the executive’s funds. The employee or his/her legal heirs will become responsible for the administration costs of the fund, if applicable, starting from the effective date of retirement for disability or death.

 

VIII.4.           Executives from Associated or Subsidiary Companies that Undergo Change of Control or Vale’s Divestiture

 

Executives from associated or subsidiary companies (see Annex A: List of Participating Companies) that undergo Change of Control or Vale ́s divestiture, will receive the Matching | 2015 Cycle reward, in cash, proportionally to the number of months worked for the associated/subsidiary company during this cycle and before the Change of Control or Vale ́s divestiture. The area/company responsible for the personnel expenses of the executive (e.g. base salary) on the date when the Change of Control or divestiture occurs, is also responsible for the payment of his/her Matching | 2015 reward. The employee may sell or keep the shares/ADRs acquired with his/her own funds and will become responsible for the administration costs of the fund, if applicable, starting from the effective date of the termination.

 

12

 

VIII.5.           Summary Table of Conditions for Early Payment (Before the End of the Cycle)

 

Table VIII.1: Summary of conditions for early pay.

 

	
#
    	
 
    	
Condition for
   early pay
    	
 
    	
Eligibility
   for reward
    	
 
    	
Reward
   Form
    	
 
    	
Reference date for
   calculations(16)
    	
 
    	
Time proportion for
   calculating the
   reward
    	
 
    	
Timing of reward payment
    	
 
    	
Responsibility for the
   costs related to the
   reward
    	
 
    	
Ownership of
   the shares
   acquired to join
   the program
   (with
   executive’s
   funds)
    	
 
    	
Responsibility
   for
   administration
   costs of the
   fund as of the
   resignation date
    
	
1
    	
 
    	
Resignation or   Dismissal For Cause
    	
 
    	
No
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
Executive
    	
 
    	
Executive
    
	
2
    	
 
    	
Dismissal by Vale   / Retirement
    	
 
    	
Yes
    	
 
    	
Cash
    	
 
    	
Last business day   of the month preceding the termination of the employment
    	
 
    	
Number of months   worked for Vale during this cycle
    	
 
    	
Should follow   local laws and practices and should be made, preferably, along with the   payment of severance.
    	
 
    	
Area/company   responsible for the personnel expenses of the executive at the date of   termination
    	
 
    	
Executive
    	
 
    	
Executive
    
	
3
    	
 
    	
Death or   Retirement due to Disability
    	
 
    	
Yes
    	
 
    	
Cash
    	
 
    	
Last business day   of the month preceding the termination or retirement of the employee
    	
 
    	
Full reward (no   time proportion)
    	
 
    	
Should   follow local laws and practices and should be made, preferably, along with   other payments due upon the referred incident.
    	
 
    	
Area/company   responsible for the personnel expenses of the executive at the date of   termination or retirement
    	
 
    	
Executive or   his/her heirs
    	
 
    	
Executive or   his/her heirs
    
	
4
    	
 
    	
Executives from   Associated or Subsidiary Companies that Undergo Change of Control or Vale’s   Divestiture
    	
 
    	
Yes
    	
 
    	
Cash
    	
 
    	
Last business day   of the month preceding the date of the effective change of control (closing of operation)
    	
 
    	
Number of months   worked for the associated/subsidiary company during this cycle before the   change of control or Vale’s divestiture
    	
 
    	
Preferably on the   first event of payroll after the change of control or Vale’s divestiture, or   as stipulated in the change of control /Vale’s divestiture contracts.
    	
 
    	
Area/company   responsible for the personnel expenses of the executive at the date of the   change of control or Vale’s divestiture
    	
 
    	
Executive
    	
 
    	
Executive
    

 

(16)  See Annex B: Methodology For Currency Conversion and Annex C: Methodology for Calculating the Average Price of Shares for methodologies for early pays (before the end of the cycle).

 

13

 

 

IX.          Main Dates of the 2015 Cycle

 

Table IX.1: Main dates of the 2015 Cycle.

 

	
#
    	
 
    	
Date
    	
 
    	
Brief description of the event
    
	
01
    	
 
    	
Jan/Feb, 2015
    	
 
    	
·      Period for the executive to formalize the   option of enrollment
    
	
02
    	
 
    	
Feb/Mar, 2015
    	
 
    	
·      Payroll deduction date of the amount of   Matching|2015 Cycle(17)
    
	
03
    	
 
    	
March/April, 2015(18)
    	
 
    	
·      Acquisition of shares   and/or ADRs for the Matching|2015 Cycle
    
	
04
    	
 
    	
March/April,   2018
    	
 
    	
·      Payment of Matching|2015   reward to the eligible Executives
    

 

(17)  Eligible executives, who choose to participate in the program and do not have their bonus discounted from the short-term payment (STI) may make the contribution with its own resources.

(18)  The amount invested by the Executive will not be adjusted in the period between investment (bonus discount or employee contribution) and the purchase of shares.

 

14

 

Annex A: List of Participating Companies

 

Below is the list of the associated/subsidiary companies whose executives may be eligible to the Matching Program commencing in 2015, with the respective countries where these companies are established and the HR teams in charge of them.

 

Important notes:

 

The pieces of information in the table below are subject to change during the cycle. It is the responsibility of the executive to stay updated about them through their local HR.

 

The following list indicates companies that may have eligible executives. It does not mean that executives of these companies are necessarily eligible to the program.

 

Table A.1: List of subsidiary and associated companies whose executives may be eligible to the Matching | 2015 Cycle.

 

	
#
    	
 
    	
Empresa
    	
 
    	
País sede
    	
 
    	
Equipe de RH
    	
 
    	
Solution Center de RH
    
	
1
    	
 
    	
Associação Instituto Tecnologico Vale
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
2
    	
 
    	
California Steel Industries, Inc.
    	
 
    	
UNITED STATES
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
3
    	
 
    	
Camberwell Coal Pty Ltd.
    	
 
    	
AUSTRALIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
4
    	
 
    	
Carborough Downs   Coal Management Pty Ltd.
    	
 
    	
AUSTRALIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
5
    	
 
    	
Companhia Portuaria Baia de Sepetiba
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
6
    	
 
    	
Compañia Minera Miski Mayo S.R.L.
    	
 
    	
PERU
    	
 
    	
RH Fertilizantes
    	
 
    	
Fertilizantes
    
	
7
    	
 
    	
Fundação Vale do Rio Doce
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
8
    	
 
    	
Glennies Creek   Coal Management Pty Ltd.
    	
 
    	
AUSTRALIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
9
    	
 
    	
Integra Coal   Operations Pty Ltd.
    	
 
    	
AUSTRALIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
10
    	
 
    	
Potássio Rio Colorado S.A.
    	
 
    	
ARGENTINA
    	
 
    	
RH Fertilizantes
    	
 
    	
Fertilizantes
    
	
11
    	
 
    	
PT International   Nickel Indonesia Tbk
    	
 
    	
INDONESIA
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    

 

15

 

	
#
    	
 
    	
Empresa
    	
 
    	
País sede
    	
 
    	
Equipe de RH
    	
 
    	
Solution Center de RH
    
	
12
    	
 
    	
PT Vale Eksplorasi Indonesia
    	
 
    	
INDONESIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
13
    	
 
    	
Salobo Metais S.A
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
14
    	
 
    	
Transbarge Navegacion S.A
    	
 
    	
PARAGUAY
    	
 
    	
RH América Latina
    	
 
    	
América Latina
    
	
15
    	
 
    	
Vale Americas Inc
    	
 
    	
UNITED STATES
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
16
    	
 
    	
Vale Asia Kabushiki Kaisha
    	
 
    	
JAPAN
    	
 
    	
Singapore HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
17
    	
 
    	
Vale Australia Pty Ltd
    	
 
    	
AUSTRALIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
18
    	
 
    	
Vale Canada Limited
    	
 
    	
CANADA
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
19
    	
 
    	
Vale Europe Ltd.
    	
 
    	
UNITED KINGDOM
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
20
    	
 
    	
Vale Exploracion Argentina S.A.
    	
 
    	
ARGENTINA
    	
 
    	
RH América Latina
    	
 
    	
América Latina
    
	
21
    	
 
    	
Vale Exploraciones Mexico S.A.
    	
 
    	
MEXICO
    	
 
    	
Austria HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
22
    	
 
    	
Vale Exploration Peru SAC
    	
 
    	
PERU
    	
 
    	
RH América Latina
    	
 
    	
América Latina
    
	
23
    	
 
    	
Vale Exploration Pty Ltd
    	
 
    	
AUSTRALIA
    	
 
    	
Australia HR
    	
 
    	
Asia Pacific, Europe &   Middle East
    
	
24
    	
 
    	
Vale Fertilizantes S.A.
    	
 
    	
BRAZIL
    	
 
    	
RH Fertilizantes
    	
 
    	
Fertilizantes
    
	
25
    	
 
    	
Vale International Holdings GmbH
    	
 
    	
AUSTRIA
    	
 
    	
Austria HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
26
    	
 
    	
Vale International S.A
    	
 
    	
SWITZERLAND
    	
 
    	
Switzerland HR
    	
 
    	
Asia Pacific, Europe &   Middle East
    

 

16

 

	
#
    	
 
    	
Empresa
    	
 
    	
País sede
    	
 
    	
Equipe de RH
    	
 
    	
Solution Center de RH
    
	
27
    	
 
    	
Vale International SA-DIFC
    	
 
    	
UAE
    	
 
    	
Singapore HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
28
    	
 
    	
Vale International Singapore
    	
 
    	
SINGAPORE
    	
 
    	
Singapore HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
29
    	
 
    	
Vale International Korea
    	
 
    	
KOREA
    	
 
    	
Japan HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
30
    	
 
    	
Vale Japan Ltd.
    	
 
    	
JAPAN
    	
 
    	
Singapore HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
31
    	
 
    	
Vale Logística da Argentina S.A
    	
 
    	
ARGENTINA
    	
 
    	
RH América Latina
    	
 
    	
América Latina
    
	
32
    	
 
    	
VALE LOGISTICS LIMITED
    	
 
    	
MALAWI
    	
 
    	
RH África
    	
 
    	
África
    
	
33
    	
 
    	
Vale Malaysia Minerals SDN. BHD.
    	
 
    	
MALAYSIA
    	
 
    	
Malaysia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
34
    	
 
    	
Vale Manganês S.A
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
35
    	
 
    	
Vale Minerals   China Co. Ltd
    	
 
    	
CHINA
    	
 
    	
China HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
36
    	
 
    	
Vale Mozambique Ltda.
    	
 
    	
MOZAMBIQUE
    	
 
    	
RH África
    	
 
    	
África
    
	
37
    	
 
    	
Vale Newfoundland & Labrador Ltd.
    	
 
    	
CANADA
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
38
    	
 
    	
Vale Nickel (Dalian) Co. Ltd
    	
 
    	
CHINA
    	
 
    	
China HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
39
    	
 
    	
Vale Nouvelle-Calédonie S.A.S.
    	
 
    	
NEW CALEDONIA
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
40
    	
 
    	
Vale Óleo e Gás S.A
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
41
    	
 
    	
Vale Oman Distribution Center LLC
    	
 
    	
OMAN
    	
 
    	
Oman HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
42
    	
 
    	
Vale Oman   Pelletizing Company LLC
    	
 
    	
OMAN
    	
 
    	
Oman HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    

 

17

 

	
#
    	
 
    	
Empresa
    	
 
    	
País sede
    	
 
    	
Equipe de RH
    	
 
    	
Solution Center de RH
    
	
43
    	
 
    	
Vale Projectos e Desenvolvimento Moçambique Ltd.
    	
 
    	
MOZAMBIQUE
    	
 
    	
RH África
    	
 
    	
África
    
	
44
    	
 
    	
Vale S.A.
    	
 
    	
BRAZIL
    	
 
    	
RH Brasil
    	
 
    	
América Latina
    
	
45
    	
 
    	
Vale Taiwan Limited
    	
 
    	
TAIWAN
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
46
    	
 
    	
Vale Technology   Development (Canada) Limited
    	
 
    	
CANADA
    	
 
    	
Base Metals &   North America HR
    	
 
    	
Base Metals & North America
    
	
47
    	
 
    	
Vale Trading   (Shanghai) Co., Ltd
    	
 
    	
CHINA
    	
 
    	
China HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    
	
48
    	
 
    	
Vale Zambia, pty LTD.
    	
 
    	
ZAMBIA
    	
 
    	
RH África
    	
 
    	
África
    
	
49
    	
 
    	
ValeServe Malaysia Sdn. Bhd.
    	
 
    	
MALAYSIA
    	
 
    	
Malaysia HR
    	
 
    	
Asia Pacific,   Europe & Middle East
    

 

18

 

Annex B: Methodology For Currency Conversion

 

For Acquisition of Shares/ADRs

 

When the currency conversion is needed, it is recommended to use the following calculation methodology:

 

·                  Source of information: http://www.oanda.com/;

 

·                  Reference currency [A]: Currency in which the executive received his/her base salary on December 31st, 2014(19) (in the case of expatriates, host country currency);

 

·                  Currency of share trading [B]: Currency in which shares/ADRs are negotiated (BRL for shares negotiated in Brazil and USD for ADRs negotiated outside Brazil);

 

·                  Reference date for calculation: AIP payment day;

 

·                  Conversion rate: average selling (bid) rate which reflects reference date, in the form [B] for 1 (one) unit of [A];

 

·                  Conversion: the reference amount shall be converted into the currency of share trading, thus, determining the amount for the purchase of shares/ADRs;

 

·                  Rounding rules: all amounts used in the calculations must be rounded to 2 (two) significant digits, following the internationally recognized rounding rules.

 

For Payments Before the End of the Cycle

 

Cases of payment before the end of the cycle are detailed in section VIII.1. For these cases, when the currency conversion is necessary, it is recommended to use the following calculation methodology:

 

·                  Source of information: http://www.oanda.com/;

 

·                  Reference currency [A]: Currency in which the executive receives his/her base salary (in the case of expatriates, host country currency);

 

·                  Currency of share trading [B]: Currency in which shares/ADRs are negotiated (BRL for shares negotiated in Brazil and USD for ADRs negotiated outside Brazil);

 

·                  Reference period for calculation: 30 trade sessions previous to the reference dates informed in Table VIII.1, according to each specific case;

 

·                  Conversion rate: weighted average of selling (bid) rate, based on the trading amount in each of the 30 trade sessions considered, in the form [A] for 1 (one) unit of [B];

 

·                  Conversion: the amount due (calculated in the currency of share trading) must be converted into the reference currency, thus, determining the amount for payment;

 

·                  Rounding rules: all amounts used in the calculations must be rounded to 2 (two) significant digits, following the internationally recognized rounding rules.

 

(19)  As registered in payroll systems in that date.

 

19

 

Annex C: Methodology for Calculating the Average Price of Shares

 

Cases of payment before the end of the cycle are detailed in section VIII.1. For those cases, when the calculation of price of the share/ADR is needed, it is recommended to use the following calculation methodology:

 

·                  Source of information: http://www.vale.com;

 

·                  Reference currency [A]: Currency in which the executive receives his/her base salary (in the case of expatriates, host country currency);

 

·                  Currency of share trading [B]: Currency in which shares/ADRs are negotiated (BRL for shares negotiated in Brazil and USD for ADRs negotiated outside Brazil);

 

·                  Reference period for calculation: 30 trade sessions previous to the reference dates informed in Table VIII.1, according to each specific case;

 

·                  Average price (in [B]): weighted average of the daily closing prices of the shares/ADRs, based on the trading amount in each of the 30 trade sessions considered; and

 

·                  Rounding rules: all amounts used in the calculations must be rounded to 2 (two) significant digits, following the internationally recognized rounding rules.

 

20

 

Annex E: Distribution for Placement of the Eligible Executives

 

Table E.1: Distribution for placement of the executives according to the total of eligible executives.

 

	
Total number of
   eligible
   (Group A + Group B)
    	
 
    	
Maximum number of
   executives placed in
   Group A
    
	
1
    	
 
    	
1
    
	
2
    	
 
    	
1
    
	
3
    	
 
    	
1
    
	
4
    	
 
    	
2
    
	
5
    	
 
    	
2
    
	
6
    	
 
    	
2
    
	
7
    	
 
    	
3
    
	
8
    	
 
    	
3
    
	
9
    	
 
    	
3
    
	
10
    	
 
    	
3
    
	
11
    	
 
    	
4
    
	
12
    	
 
    	
4
    
	
13
    	
 
    	
4
    
	
14
    	
 
    	
5
    
	
15
    	
 
    	
5
    
	
16
    	
 
    	
5
    
	
17
    	
 
    	
6
    
	
18
    	
 
    	
6
    
	
19
    	
 
    	
6
    
	
20
    	
 
    	
6
    
	
21
    	
 
    	
7
    
	
22
    	
 
    	
7
    
	
23
    	
 
    	
7
    
	
24
    	
 
    	
8
    
	
25
    	
 
    	
8
    
	
26
    	
 
    	
8
    
	
27
    	
 
    	
9
    
	
28
    	
 
    	
9
    
	
29
    	
 
    	
9
    
	
30
    	
 
    	
9
    
	
31
    	
 
    	
10
    
	
32
    	
 
    	
10
    
	
33
    	
 
    	
10
    
	
34
    	
 
    	
11
    
	
35
    	
 
    	
11
    
	
36
    	
 
    	
11
    
	
37
    	
 
    	
12
    
	
38
    	
 
    	
12
    
	
39
    	
 
    	
12
    
	
40
    	
 
    	
12
    
	
41
    	
 
    	
13
    
	
42
    	
 
    	
13
    
	
43
    	
 
    	
13
    
	
44
    	
 
    	
14
    
	
45
    	
 
    	
14
    
	
46
    	
 
    	
14
    
	
47
    	
 
    	
15
    
	
48
    	
 
    	
15
    
	
49
    	
 
    	
15
    
	
50
    	
 
    	
15
    

 

21

 

	
Total number of
   eligible
   (Group A + Group B)
    	
 
    	
Maximum number of
   executives placed in
   Group A
    
	
51
    	
 
    	
16
    
	
52
    	
 
    	
16
    
	
53
    	
 
    	
16
    
	
54
    	
 
    	
17
    
	
55
    	
 
    	
17
    
	
56
    	
 
    	
17
    
	
57
    	
 
    	
18
    
	
58
    	
 
    	
18
    
	
59
    	
 
    	
18
    
	
60
    	
 
    	
18
    
	
61
    	
 
    	
19
    
	
62
    	
 
    	
19
    
	
63
    	
 
    	
19
    
	
64
    	
 
    	
20
    
	
65
    	
 
    	
20
    
	
66
    	
 
    	
20
    
	
67
    	
 
    	
21
    
	
68
    	
 
    	
21
    
	
69
    	
 
    	
21
    
	
70
    	
 
    	
21
    
	
71
    	
 
    	
22
    
	
72
    	
 
    	
22
    
	
73
    	
 
    	
22
    
	
74
    	
 
    	
23
    
	
75
    	
 
    	
23
    
	
76
    	
 
    	
23
    
	
77
    	
 
    	
24
    
	
78
    	
 
    	
24
    
	
79
    	
 
    	
24
    
	
80
    	
 
    	
24
    
	
81
    	
 
    	
25
    
	
82
    	
 
    	
25
    
	
83
    	
 
    	
25
    
	
84
    	
 
    	
26
    
	
85
    	
 
    	
26
    
	
86
    	
 
    	
26
    
	
87
    	
 
    	
27
    
	
88
    	
 
    	
27
    
	
89
    	
 
    	
27
    
	
90
    	
 
    	
27
    
	
91
    	
 
    	
28
    
	
92
    	
 
    	
28
    
	
93
    	
 
    	
28
    
	
94
    	
 
    	
29
    
	
95
    	
 
    	
29
    
	
96
    	
 
    	
29
    
	
97
    	
 
    	
30
    
	
98
    	
 
    	
30
    
	
99
    	
 
    	
30
    
	
100
    	
 
    	
30
    

 

22

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