Cincinnati Bell 2012 Annual Report Download - page 50

Effective January 24, 2013, the Company completed the initial public offering of CyrusOne, a qualifying
transaction, which resulted in full vesting of awards to participants who were continuously employed through this
date regardless of the achievement of performance measures. The Company has engaged a third party valuation
firm to assist in determining the equity value created. The value of the payments to the NEOs has not yet been
determined. The actual payout will be a percentage of the amounts shown in the table above based upon the
percentage of the equity value created in relation to the target of $1 billion.
Benefits
NEOs, hired prior to January 1, 2009, participate in the same pension plan as all other eligible salaried and
certain non-union hourly employees. The pension plan is a qualified defined benefit plan with a nonqualified
provision that applies to the extent that eligible earnings or benefits exceed the applicable Internal Revenue Code
limits for qualified plans. The Company makes all required contributions to this plan. In addition, Mr. Cassidy is
also covered under a nonqualified supplemental retirement plan, the Cincinnati Bell Pension Program (the
“SERP”), the benefits of which are payable by the Company. Mr. Cassidy is vested in his SERP benefits and
retired as of January 31, 2013. The Company and the Compensation Committee have determined that it is
unlikely that any new participants will be added to the SERP in the future. The pension plans are designed to
provide a reasonable level of replacement income upon retirement and provide an incentive for executives to
remain with the Company for a significant portion of their careers. The executives, along with all other salaried
employees, also participate in a 401(k) savings plan, which includes a Company matching contribution feature
that vests 100% of such matching contributions in the employee’s account as they are made to the plan.
The value of the Company’s retirement programs is not considered in any of the compensation decisions
made with respect to other elements of NEO compensation, because the Company believes that the alignment of
the interests of executives and shareholders is most effectively accomplished through its short- and long-term
incentive compensation programs, and because survey data used for benchmarking focuses on short- and long-
term incentive compensation programs, rather than retirement programs. In addition, long-term incentives do not
play a role in determining retirement benefits.
Each executive participates in a broad set of other benefit plans and programs, including medical, dental,
vision, life, short- and long-term disability plans and home telephone service price discount programs, on the
same basis as all other salaried employees. The Company believes that the various benefit plans and programs
provided are consistent with predominant U.S. employment practices and are necessary to attract and retain
executive talent.
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