Cincinnati Bell 2005 Annual Report Download - page 43

Employment Agreement with Mr. Dir
Effective July 26, 2005, the Company entered into a new Employment Agreement with Mr. Dir which
provides for the employment and retention of Mr. Dir for a one-year term subject to automatic one-year
extensions. The Employment Agreement provides for a minimum base salary of $300,000 per year, a minimum
bonus target of $255,000 per year, a guaranteed bonus for 2005 (payable in early 2006 when other annual
bonuses are customarily paid) of $255,000 and a grant of 200,000 stock options on July 11, 2005—his first day
of employment.
The Employment Agreement provides that, in the event that the Company terminates Mr. Dir’s employment
other than for cause or disability, Mr. Dir will receive a lump sum payment equal to one times his base salary rate
and bonus target, plus certain continued medical, dental, vision and life insurance coverages. If Mr. Dir’s
employment is terminated within one year following a change in control, Mr. Dir will receive a lump sum
payment equal to two times his base salary rate and bonus target, plus certain continued medical, dental, vision
and life insurance coverages. In addition, to the extent that Mr. Dir is deemed to have received an excess
parachute payment by reason of a change in control, the Company will pay Mr. Dir an additional sum sufficient
to pay (i) any taxes imposed under Section 4999 of the Internal Revenue Code plus (ii) any federal, state and
local taxes applicable to such additional sum.
Employment Agreement with Mr. Callaghan
Effective December 4, 2001 (as amended on February 3, 2003, October 22, 2003, December 3, 2004 and
December 15, 2005), the Company entered into an Employment Agreement with Mr. Callaghan which provides
for the employment and retention of Mr. Callaghan for a two-year term subject to automatic one-year extensions.
The Employment Agreement provides for a minimum base salary of $250,000 per year; a bonus target of
$100,000 per year; and a grant of options to purchase 100,000 common shares in 2001 and an amount to be
determined each year for subsequent years.
The Employment Agreement provides that, in the event that the Company terminates Mr. Callaghan’s
employment other than for cause or disability; or terminates his employment within one year of a change in
control of the Company; or if he resigns within 90 days following a change in control of the Company,
Mr. Callaghan will receive a lump sum payment equal to two times his base salary rate and bonus target, plus
certain continued medical, dental, vision and life insurance coverages. In addition, to the extent that
Mr. Callaghan is deemed to have received an excess parachute payment by reason of a change in control, the
Company will pay Mr. Callaghan an additional sum sufficient to pay (i) any taxes imposed under Section 4999 of
the Code plus (ii) any federal, state and local taxes applicable to such additional sum.
On February 3, 2003, Mr. Callaghan’s Employment Agreement was amended in connection with the
implementation of a Success Plan. Under the Success Plan, Mr. Callaghan became eligible to receive a one-time
bonus payment equal to 50% of the sum of his then current annual base salary and bonus target upon completion
of the sale of the Company’s broadband business. In addition, the February 3, 2003 amendment gave
Mr. Callaghan the right to terminate his Employment Agreement at any time within the seven calendar days
following completion of the Success Plan with the same rights and privileges that would have accrued to
Mr. Callaghan had the Company terminated his Employment Agreement within one year of a change in control.
On October 22, 2003, Mr. Callaghan’s Employment Agreement was amended to postpone this self-termination
right to the time period between December 15, 2004 and December 31, 2004. Similar amendments were executed
on December 3, 2004 and December 15, 2005 to further postpone this self-termination right. Currently,
Mr. Callaghan has the right to terminate his Employment Agreement at any time within the period between
December 26, 2006 and December 31, 2006.
Employment Agreement with Mr. Wilson
Effective July 26, 2005, the Company entered into a new Employment Agreement with Mr. Wilson which
provides for the employment and retention of Mr. Wilson for a one-year term subject to automatic one-year
extensions. The Employment Agreement provides for a minimum base salary of $250,000 per year and a
minimum bonus target of $125,000 per year.
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