Cincinnati Bell 2006 Annual Report Download - page 62

Discussion of Summary Compensation Table and Grant of Plan-Based Awards
Employment Agreements
During 2006, all of the Named Executive Officers were employed pursuant to agreements with the
Company. Each employment agreement sets forth, among other things, the Named Executive Officer’s base
salary, bonus opportunities, entitlement to participate in the Company’s benefit and pension plans and to receive
equity awards, and post-termination benefits and obligations.
Mr. Cassidy’s employment agreement, which was effective as of January 1, 1999 (and amended on
September 20, 2002 and July 26, 2005), provides for the employment and retention of Mr. Cassidy for a four-
year term commencing January 1, 1999 subject to automatic one-year extensions. Mr. Cassidy’s employment
agreement provides for:
•a minimum base salary of $550,000 per year and a minimum bonus target of $495,000 per year;
•an initial grant of options in 1999 to purchase 30,000 common shares and additional grants to be
determined each subsequent year;
•an initial restricted stock award in 1999 of 40,000 common shares which vested on May 23, 2003; and
•a nonqualified supplemental retirement plan.
Because Mr. Cassidy has been employed by the Company for over 10 years and was employed after April 8,
2006, his nonqualified supplemental retirement plan benefit has vested and is equal to the portion of his accrued
pension under the Cincinnati Bell Management Pension Plan that is attributable to his first ten years of service.
Mr. Cassidy’s supplemental pension shall be paid to him (or his estate if his employment terminates by reason of
his death) in a single lump sum within ninety days after the termination of his employment.
Mr. Ross’s employment agreement, which was effective July 26, 2005, provides for the employment and
retention of Mr. Ross for a one-year term subject to automatic one-year extensions. Mr. Ross’s employment
agreement provides for a minimum base salary of $350,000 per year and a minimum bonus target of $297,500
per year.
Mr. Dir’s employment agreement, which was effective July 26, 2005, provides for the employment and
retention of Mr. Dir for a one-year term subject to automatic one-year extensions. Mr. Dir’s 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 (which was paid in early 2006 when other annual bonuses are customarily
paid) of $255,000 and an initial grant of 200,000 stock options on his first day of employment (July 11, 2005).
Mr. Callaghan’s employment agreement, which was effective December 4, 2001 (and amended on
February 3, 2003, October 22, 2003, December 3, 2004 and December 15, 2005), provides for the employment
and retention of Mr. Callaghan for a two-year term subject to automatic one-year extensions. Mr. Callaghan’s
employment agreement provides for a minimum base salary of $250,000 per year; a bonus target of $100,000 per
year; and an initial grant of options to purchase 100,000 common shares in 2001 and additional grants to be
determined each subsequent year. In addition, under the February 3, 2003 amendment to his employment
agreement, 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 (the “Success Plan”). The February 3, 2003 amendment also 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. Amendments to his employment agreement
dated October 22, 2003, December 3, 2004 and December 15, 2005 effectively postponed this self-termination
right to the time period between December 26, 2006 and December 31, 2006. Mr. Callaghan exercised this self-
termination right and terminated his employment with the Company effective December 31, 2006.
Mr. Wilson’s employment agreement, which was effective July 26, 2005, provides for the employment and
retention of Mr. Wilson for a one-year term subject to automatic one-year extensions. Mr. Wilson’s 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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