Cincinnati Bell 2004 Annual Report Download - page 45

(g) Mr. Callaghan’s bonus amount consisted of an annual bonus in the amount of $119,306 and a “success
bonus” in the amount of $181,250, which was paid in connection with the sale by the Company of the
broadband business of BCSI Inc. (f/k/a Broadwing Communications Services Inc.).
(h) Mr. Wilson’s base salary reflected a blend of his starting annual salary rate of $140,000 and, following
his appointment as Vice President and General Counsel, an ending annual salary rate of $225,000.
(i) Mr. Keating’s base salary reflected a blend of his starting annual salary rate of $154,020 and, following
his appointment as Vice President Human Resources and Administration of Cincinnati Bell Inc., an
ending annual salary rate of $205,000.
Grants of Stock Options in Last Fiscal Year
The following table shows all individual grants by the Company of stock options to purchase common
shares granted to the named executive officers of the Company during the fiscal year ended December 31, 2004:
Potential Realizable Value
At Assumed Annual Rates of
Stock Price Appreciation
for Option Term(b)
Name
Number of
Securities
Underlying
Options
Granted (#)(a)
% of Total
Options
Granted to
Employees In
Fiscal Year
Exercise
Price
($/Sh)
Expiration
Date 5%($) 10%($)
John F. Cassidy ................ 666,100 31.70% $3.700 12/03/14 $1,550,015 $3,927,858
Brian A. Ross .................. 150,000 7.14% $3.700 12/03/14 $ 349,050 $ 884,520
300,000 14.28% $5.570 01/29/14 $1,050,840 $2,663,220
Michael W. Callaghan ......... 75,000 3.57% $3.700 12/03/14 $ 174,525 $ 442,260
Christopher J. Wilson .......... 75,000 3.57% $3.700 12/03/14 $ 174,525 $ 442,260
Brian G. Keating .............. 75,000 3.57% $3.700 12/03/14 $ 174,525 $ 442,260
(a) The material terms of the options granted are: grant type: non-incentive; exercise price: fair market value
on grant date; exercise period: generally exercisable 28% after one year, and 3% per month for the next
24 months thereafter; term of grant: 10 years; termination: except in case of retirement, disability, death
or change in control of the Company, any unexercisable options are generally cancelled upon termination
of employment.
(b) As required by rules of the SEC, potential values stated are based on the prescribed assumption that the
common shares will appreciate in value from the date of the grant to the end of the option term (ten
years from the date of the grant) at annualized rates of 5% and 10% (total appreciation of 62.9% and
159.4%) resulting in values of $9.0728 and $14.4474 for all options expiring on January 29, 2014 and
$6.0270 and $9.5968 for all options expiring on December 3, 2014. They are not intended, however, to
forecast possible future appreciation, if any, in the price of the common shares. The total of all stock
options granted to employees, including executive officers, during fiscal 2004 was approximately 0.85%
of the total number of common shares outstanding as of December 31, 2004. As an alternative to the
assumed potential realizable values stated in the above table, the SEC’s rules would permit stating the
present value of such options at date of grant. Methods of computing present values suggested by
different authorities can produce significantly different results. Moreover, since stock options granted by
the Company are not transferable to persons other than family members, there are no objective criteria by
which any computation of present value can be verified. Consequently, the Company’s management does
not believe there is a reliable method of computing the present value of such stock options for proxy
disclosure purposes.
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Proxy Statement