Document:

EX-10.2

Exhibit 10.2

Confidential materials omitted and filed

separately with the Securities and Exchange

Commission. Asterisks denote such omission.

CONSTELLATION BRANDS, INC.

ANNUAL MANAGEMENT INCENTIVE PLAN

2009 FISCAL YEAR AWARD PROGRAM

FOR EXECUTIVE OFFICERS

 

 

CONSTELLATION BRANDS, INC.

ANNUAL MANAGEMENT INCENTIVE PLAN

2009 FISCAL YEAR AWARD PROGRAM

FOR EXECUTIVE OFFICERS

TABLE OF CONTENTS

	 	 	 	 	 
	Paragraph	 	Page
	 
	1. PROGRAM OBJECTIVES
	 	 	1	 
	 
	 	 	 	 
	2. PROGRAM ADMINISTRATION
	 	 	1	 
	 
	 	 	 	 
	3. PROGRAM PARTICIPATION
	 	 	2	 
	 
	 	 	 	 
	4. TERMINATION OF EMPLOYMENT
	 	 	2	 
	 
	 	 	 	 
	5. AWARD LEVELS
	 	 	2	 
	 
	 	 	 	 
	6. PERFORMANCE TARGETS
	 	 	3	 
	 
	 	 	 	 
	7. EFFECT OF EXTRAORDINARY ITEMS, MERGER, ACQUISITION, REORGANIZATION, ETC.
	 	 	3	 
	 
	 	 	 	 
	8. PAYMENT OF AWARDS
	 	 	4	 
	 
	 	 	 	 
	9. ASSIGNMENT
	 	 	4	 
	 
	 	 	 	 
	10. EMPLOYMENT RIGHT
	 	 	4	 
	 
	 	 	 	 
	11. WITHHOLDING FOR TAXES
	 	 	4	 
	 
	 	 	 	 
	12. SPECIAL RULES FOR CERTAIN EXECUTIVES
	 	 	4	 
	 
	 	 	 	 
	13. DEFINITIONS
	 	 	5	 

ii 

 

CONSTELLATION BRANDS, INC.

EXECUTIVE ANNUAL MANAGEMENT INCENTIVE PLAN

2009 FISCAL YEAR AWARD PROGRAM

FOR EXECUTIVE OFFICERS

	 	 	 
	Purpose:

	 	This document is intended to describe parameters for making incentive awards for
the period commencing March 1, 2008 and ending February 28, 2009 during the Company’s 2009
fiscal year (the “Program”). The Company has adopted the Annual Management Incentive Plan
(the “Plan”) which authorizes the Company to grant incentive compensation to certain
employees. All awards granted under the Program will be granted pursuant and subject to the
terms of the Plan.

1. PROGRAM OBJECTIVES

     The objectives of the Program are to:

	 	A.	 	Support the Company’s annual planning, budget and strategic planning process;
	 
	 	B.	 	Provide compensation opportunities which are competitive with those of other beverage
alcohol or industry related companies in order to attract and retain key executives;
	 
	 	C.	 	Motivate executives to achieve profit and other key goals of the Company;
	 
	 	D.	 	Control overhead by designating a portion of annual compensation as a variable rather
than fixed expense.

2. PROGRAM ADMINISTRATION

	 	A.	 	The Human Resources Committee (the “Committee”) of the Company’s Board of Directors is
responsible for determining which employees shall receive awards and the amounts, terms and
conditions of all awards under the Program. The Committee will delegate certain
administrative duties to the Senior Vice President, Chief Human Resources Officer.

	 	B.	 	Decisions and determinations by the Committee will be final and binding upon all
persons, including, but not limited to, participants and their personal representatives,
heirs and assigns.

	 	C.	 	This Program creates no vested or contractual right to the compensation provided
herein. The Committee shall have the authority to interpret, amend or cancel the Program
at any time, or to make any other determinations that it believes necessary or advisable
for the administration of the Program. The Committee’s authority includes the power, in
its sole discretion, to reduce the amount of or eliminate an Award payable to a
participant.

 

 

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3. PROGRAM PARTICIPATION

	 	A.	 	The Committee is responsible for determining who may participate in the Program. The
Company will provide a written recommendation to the Committee of the employees who it
believes should be included in the Program for a Plan Year. Generally, Awards will be made
to employees who the Committee believes are in a position to make significant contributions
to the financial success of the Company.

	 	B.	 	The participants for the Plan Year are identified in Schedule A. These schedules may
be revised at any time during the year, as appropriate.

	 	C.	 	To the extent permitted by Section 162(m) of the Internal Revenue Code, participants
may be added to the Program at any time during a Plan Year provided that such addition
occurs before December of the Plan Year. In this case, a participant’s Salary for purposes
of determining an Award shall be prorated for the period remaining in the Plan Year. For
purposes of proration, a participant shall be given credit for the entire month of any
month in which the participant participates in the Program.

4. TERMINATION OF EMPLOYMENT 

	 	A.	 	In the event that a participant terminates employment for reasons other than death,
Disability, Retirement or involuntary termination without Cause during a Plan Year, the
participant will forfeit all rights to an Award with respect to that Plan Year unless
otherwise stated in a ‘current’ employment contract.

	 	B.	 	In the event that a participant terminates employment for reasons of death, Disability,
Retirement, or involuntary termination without Cause, a ratable portion of any applicable
Award shall be paid, subject to the attainment of the applicable performance target at the
end of the plan year. The ratable portion of the Award shall be determined by multiplying
the Award by a fraction the numerator of which is the number of full or partial months
during the Plan Year during which the participant was employed and the denominator of which
is twelve. Such amount will be paid at the same time as when Awards are paid to other
participants.

5. AWARD LEVELS

	 	A.	 	The amount of a participant’s Award will be calculated based on three variables: the
participant’s management position, Salary and achieved performance for the Plan Year.

	 	B.	 	Each participant will be assigned to a certain category (“Participation Category”)
based on the participant’s management position in the Company (see Schedule A).

	 	C.	 	The Committee has established performance targets for each participant that are based
on one or more of the following: a Corporate performance target(s) (“Corporate Target”),
and a Division/Company performance target(s) (“Divisional Target”). Schedule C sets forth
the applicable Corporate and Divisional Targets.

	 	D.	 	A participant who has a Corporate Target(s) and/or a Divisional Target(s) will be
assigned a weighting to determine the percentage that each of the targets will contribute
towards the participant’s total Award. These weightings are set forth in Schedule D (e.g.,

 

 

- 3 -

	 	 	 	the Award for a Division CEO will be calculated 40% based on the Corporate Target and 60%
based on the participant’s Divisional Targets). The weightings assigned to the Corporate
and Divisional Targets will be referred to as the “Corporate Percentage(s)” and “Divisional
Percentage(s)”, respectively.

	 	E.	 	A participant’s Award will be calculated by multiplying the participant’s Salary by the
appropriate percentage set forth in the Award Schedule (Schedule B) taking into account the
participant’s Participation Category and performance level (e.g., threshold, target,
maximum, etc.) with respect to the participant’s Corporate Target(s) and multiplying such
amount by the participant’s Corporate Percentage(s). If the actual performance level falls
between the designated levels of performance set forth in Schedule B, the percentage by
which the participant’s salary is multiplied will be interpolated. For example, if the
actual performance level falls half way between the “threshold” and “midpoint” levels, the
percentage will be calculated as the average of the percentages for the “threshold” and
“midpoint” levels. A similar calculation is performed for the participant’s Divisional
Targets, if any, and the participant’s total Award will be the sum of these calculations.

	 	 	 	 	 
	 

	 	Example:
	 	Assume a Divison CEO of Constellation Brands was listed in Participation Category
A1,
had a salary of $450,000, and achieved the participant’s “threshold”
Corporate Target and “maximum” Divisional Targets. Based on these facts and Schedules
B, C and D, the participant’s Award would be
$409,500 (i.e., $450,000 x 40% x 17.5%+ $450,000 x 40% x 140% + $450,000 x 20% x 140%).

6. PERFORMANCE TARGETS

	 	A.	 	Performance measurement criteria will be established for the Plan Year and such
criteria will relate to corporate and/or divisional objectives. Performance targets will
be established based on the selected criteria. Schedule C sets forth the applicable
corporate and divisional performance criteria and targets for the Plan Year.

	 	B.	 	Schedule B sets forth the Award levels based on the attainment of the Corporate,
Divisional, Individual and Team Targets determined in accordance with the criteria and
targets set forth in Schedule C.

7. EFFECT OF EXTRAORDINARY ITEMS, MERGER, ACQUISITION, REORGANIZATION, ETC.

	 	A.	 	The Committee shall adjust the performance measurement criteria to take into account
the effects of any “Extraordinary Items.” “Extraordinary Items” means (1) items presented
as such (or other comparable terms) on the Company’s audited financial statements, (2)
extraordinary, unusual or nonrecurring items of gain or loss (including, without
limitation, an unbudgeted material expense incurred by or at the direction of the Board of
Directors or a Committee of the Board or a material litigation judgment or settlement), (3)
changes in tax or accounting laws or rules, and (4) the effects of mergers,

 

 

- 4 -

	 	 	 	acquisitions, divestitures, spin-offs or significant transactions (including, without
limitation, a corporate merger, consolidation, acquisition of property or stock,
reorganization, restructuring charge, or joint venture), each of which are identified in the
audited financial statements and notes thereto or in the “management’s discussion and
analysis” of the financial statements in a period report filed with the SEC under the
Exchange Act. The Committee shall make such adjustments to the performance measurement
criteria as shall be equitable and appropriate in order to make the criteria, as nearly as
practicable, equivalent to the criteria immediately prior to such transaction or event.

	 	B.	 	In the event of a Change of Control, as defined under the Plan, the Plan Year shall end
on the date of the Change in Control and the Corporate and Divisional Targets shall be
adjusted to reflect the early termination of the Plan Year. If the Corporate and
Divisional Targets, as adjusted, are deemed satisfied by the Committee, a participant may
receive a ratable portion of the Award that would have been paid if the Plan Year had not
been terminated early and the Corporate and Divisional Targets had been satisfied. The
ratable portion of the Award shall be determined by multiplying the original Award by a
fraction with a numerator equal to the number of months from the first day of the Plan Year
to the date of the Change of Control (including any fractional month) and a denominator
equal to twelve.

8. PAYMENT OF AWARDS

The entire Award calculated in accordance herewith shall be payable within thirty (30) days
after the Committee approves the final year end performance in accordance with the plan
document. Before any Award is paid to a participant, the Committee will certify, in writing,
that the applicable performance targets were achieved and the amount of the Award is accurately
calculated.

9. ASSIGNMENT

No right or interest of any Participant in the Program shall be assignable or transferable, or
subject to any lien, directly, by operation of law, or otherwise, including levy, garnishment,
attachment, pledge or bankruptcy.

10. EMPLOYMENT RIGHT

The Program shall not confer upon any participant any right to continued employment. The right
to dismiss any employee with or without cause or notice is specifically reserved to the Company.

11. WITHHOLDING FOR TAXES

The Company shall have the right to deduct from all payments under this Program any federal or
state taxes or other employment related withholdings required by law to be withheld with respect
to such payments.

 

 

- 5 -

12. SPECIAL RULES FOR CERTAIN EXECUTIVES

	 	A.	 	The Company’s Chief Executive Officer and certain other individuals designated by the
Committee (“Covered Employees”) will be subject to special rules to ensure that the Awards
granted to such individuals will be treated as qualified “performance-based compensation”
under Internal Revenue Code Section 162(m). All provisions of the Program and the Plan
shall be interpreted and administered consistently with that intent. The Committee will
designate those individuals who are to be treated as “Covered Employees” on Schedule A.

	 	B.	 	Notwithstanding any provision to the contrary, the following rules will apply to
Covered Employees:

	 	(1)	 	The Committee shall establish Corporate and Divisional Targets for Covered
Employees that are tied to one or more of the Performance Criteria set forth in the
Plan.

	 	(2)	 	The Committee shall establish a Corporate Target(s) and, if applicable, a
Divisional Target(s) for Covered Employees within 90 days of the commencement of the
Plan Year. The satisfaction of such targets shall be substantially uncertain at the
time they are established.

	 	(3)	 	The amount of the Award shall be computed under an objective formula and the
Committee shall have no discretionary authority to increase the amount of the Award or
alter the methodology for calculating the Award, except as permitted by Section 162(m)
of the Internal Revenue Code and the regulations promulgated thereunder.

	 	(4)	 	The maximum amount a Covered Employee can receive under the Plan for the Plan
Year cannot exceed $5 million.

	 	(5)	 	Before any Award is paid to a Covered Employee, the Committee will certify, in
writing, that the Corporate Target(s) and, if applicable, the Divisional Target(s) was
achieved and the amount of the Award is accurately calculated.

13. DEFINITIONS

A. AWARD

“Award” shall mean the award to a Participant as determined under the Program.

B. CAUSE

“Cause” means gross negligence or willful misconduct or commission of a felony or an act of
moral turpitude determined by the Committee to be detrimental to the best interests of the
Company or, such other definition set forth in a written employment agreement with the Company.

C. THE COMPANY

“The Company” shall mean Constellation Brands, Inc. and its direct and indirect subsidiaries.

 

 

- 6 -

D. DISABILITY

“Disability” is defined as termination of employment due to the inability of a Participant to
engage in any substantial gain activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than six months, all as verified by a
physician acceptable, or selected by, the Committee.

E. PLAN and PLAN YEAR

“Plan” shall mean the Constellation Brands, Inc. Annual Management Incentive Plan.

“Plan Year” shall be the period commencing on March 1, 2008 and ending on February 28, 2009.

F. RETIREMENT

“Retirement” shall mean a termination of employment by an employee who is at least 60 years of
age and after at least 10 years of service with the Company. For an individual who becomes
employed by the Company in connection with a business acquisition (regardless of the form of the
transaction), service shall include the individual’s service with the acquired business, unless
the Committee determines otherwise.

G. SALARY

“Salary” shall mean the participant’s actual base compensation earned for the 2009 Fiscal Year.
Actual base compensation earned shall be determined exclusive of any other compensation such as
stock option income, grants of any kind, bonus awards, etc.

 

 

- 7 -

SCHEDULE
A

CONSTELLATION BRANDS, INC. ANNUAL MANAGEMENT INCENTIVE PLAN FOR EXECUTIVE OFFICERS

EXECUTIVE PARTICIPATION LIST

	 	 	 	 	 
	Participation Category	 	Title	 	Participant
	[****]

	 	Chairman of the Board, COB
	 	R. Sands *
	 

	 	President, CEO
	 	R.S. Sands *
	[****]
	 	 	 	 
	 

	 	EVP Chief Financial Officer
	 	R. Ryder*
	 

	 	EVP Chief Legal Officer
	 	T. Mullin *
	 

	 	EVP Strategy & Business Development
	 	P. Hetterich *
	 

	 	EVP Chief Administrative Officer
	 	K. Wilson *
	 

	 	President & CEO Constellation Beers & Spirits
	 	A. Berk*
	 

	 	CEO Constellation International
	 	J. Moramarco*
	 

	 	President & CEO Constellation Wines North America
	 	J. Fernandez*

 

			
	*	 	“Covered” employee

 

 

			
	Confidential materials omitted and filed separately with the Securities and Exchange Commission.
Asterisks denote such omission.

  

 

 

- 8 -

SCHEDULE B

AWARD SCHEDULE

FOR EXECUTIVE OFFICERS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Participation	 	 	 	 	 	 	 	 	 	 
	Category	 	Threshold	 	Midpoint	 	Target	 	Midpoint	 	Maximum
	A2

	 	 	30	%	 	 	60	%	 	 	120	%	 	 	180	%	 	 	240	%
	A1

	 	 	17.5	%	 	 	35	%	 	 	70	%	 	 	105	%	 	 	140	%

 

 

- 9 -

SCHEDULE C

PERFORMANCE SCHEDULE

(000,000’s)

EBIT

	 	 	 	 	 	 	 	 	 
	AMIP Factor	 	[****]*	 	[****]*	 	[****]**	 	[****]**
	 
	2.00
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.75
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.50
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.25
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	1.00
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	0.50
	 	$[****]	 	$[****]	 	$[****]	 	$[****]
	0.25
	 	$[****]	 	$[****]	 	$[****]	 	$[****]

	 		
	*	 	The measure of “EBIT” (Earnings Before Interest and Taxes) for purposes hereof shall be
determined as the sum of Operating Income plus Equity in Earnings of Equity Method Investees.
“EBIT” is measured based on the Company’s performance for the period from March 1, 2008 through
February 28, 2009.
	 
	**	 	Given the intra-company transfers and transactions that occur in these entities, the Company
has determined that Divisional EBIT for the wine divisions, for purposes of this program, shall
be calculated as EBIT (Earnings Before Interest and Taxes) of the Operating Company for the
period from March 1, 2008 through February 28, 2009, plus EBIT earned by inter-company trading
companies for exported products and EBIT earned by brand owner companies for imported products.

 

Confidential materials omitted and filed separately with the Securities and Exchange Commission.
Asterisks denote such omission.

 

 

- 10 -

Free Cash Flow

	 	 	 	 	 	 	 	 	 	 
	AMIP Factor	 	 	[****]	 	[****]	 	[****]	 	[****]
	2.00

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.75

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.50

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.25

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	1.00

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	0.50

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]
	0.25

	 	 	$[****]
	 	$[****]
	 	$[****]
	 	$[****]

The measure of “Free Cash Flow” for purposes hereof shall be calculated as follows: Net Cash
Provided by (Used in) Operating Activities minus Purchases of Property, Plant and Equipment.
“Free Cash Flow” is measured based on the Company’s performance for the period from March 1,
2008 through February 28, 2009. For divisional Free Cash Flow, results are calculated before
tax payments.

 

 

			
	Confidential materials omitted and filed separately with the Securities and Exchange Commission.
Asterisks denote such omission.

 

 

- 11 -

SCHEDULE D

WEIGHTINGS FOR CORPORATE AND DIVISIONAL/COMPANY TARGETS

	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	 	 	 
	Corporate/CBI	 	EBIT	 	Corporate Free Cash Flow
	Chairman/CEO

	 	 	80%	 	 	 	20%	 
	EVP

	 	 	80%	 	 	 	20%	 

	 	 	 	 	 	 	 	 	 
	 	 	Corporate	 	Divisional	 	Divisional Free
	Division/Company	 	EBIT	 	EBIT/Other	 	Cash Flow
	CEO
	 	40%	 	40%	 	 	20%EX-10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     This Agreement is made as of the Effective Date between Cincinnati Bell Inc. (“Employer”), and
Gary J.Wojtaszek (“Employee”). For purposes of this Agreement, the “Effective Date” is August 1,
2008.

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, other than
any incentive awards granted to Employee prior to the date hereof, benefit plans in which Employee
is eligible for participation and any Employer policies to which Employee is subject.

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 Senior Vice President and Chief Financial Officer 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 which is a member of a
controlled group of corporations (within the meaning of section 1563(a) of the Internal Revenue
Code of 1986, as amended (the “Code”)) which includes 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.

4. Compensation.

     A. Employee shall receive a base salary (the “Base Salary”) of at least $350,000.00 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 $350,000.00. The Bonus target shall be established from time to time by the
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”).

2

 

     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.

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 the 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 the Employer or its
Affiliates; technical data, plans and specifications, 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 the 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.

3

 

     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.

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 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 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 2711 regarding the enforceability of
arbitration agreements and awards will govern this Agreement and the arbitration award.

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          (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 the 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.

               (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

5

 

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.

               (l) 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.

               (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

6

 

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 the 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.

          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.

7

 

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
Plan 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 Plan 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.

     B. This Agreement terminates immediately and automatically on the death of the Employee,
provided, however, that the Employee’s estate shall be paid Employee’s accrued compensation
hereunder, whether Base Salary, Bonus or otherwise, to the date of death.

8

 

     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 under this Section 13.D. within one year after a Change in
Control. In the event of a termination by Employer under this Section 13.D., Employer shall
within five days after the termination, unless later payment is required by applicable law, rule or
regulation, pay Employee an amount equal to one times the sum of the annual Base Salary rate in
effect at the time of termination and the Bonus target in effect at the time of termination. For
the remainder of the Current Term, Employer shall continue to provide Employee with medical,
dental, vision and life insurance coverage comparable to the medical, dental, vision and life
insurance coverage in effect for Employee immediately prior to the termination; and, to the extent
that Employee would have been eligible for any post-retirement medical, dental, vision or life
insurance 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. For purposes of any stock option, restricted stock grant or other incentive award
outstanding immediately prior to the termination, Employee’s employment with Employer shall not be
deemed to have terminated until the end of the Current Term. In addition, Employee shall be
entitled to receive, as soon as practicable after termination, an amount equal to the sum of (i)
any forfeitable benefits under any qualified or nonqualified 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 Employee’s employment had not terminated plus (ii) if Employee is participating
in a qualified or nonqualified defined benefit plan of Employer or any Affiliate at the time of
termination, an amount equal to the present value of the additional vested benefits which would
have accrued for Employee under such plan if Employee’s employment had not terminated prior to the
end of the Current Term and if Employee’s annual Base Salary and Bonus target had neither increased
nor decreased after the termination. For purposes of this Section 13.D., “Current Term” means the
one year period beginning at the time of termination. For purposes of this Section 13.D. and
Section 13.E., “Change in Control” means a change in control as defined in Employer’s 1997 Long
Term Incentive Plan, as amended and in effect as of the Effective Date.

     E. This Agreement shall terminate automatically in the event that there is a Change in Control
and Employee’s employment with Employer is actually or constructively 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. For purposes of the preceding sentence, a “constructive” termination of Employee’s
employment shall be

9

 

deemed to have occurred if, without Employee’s consent, there is a material reduction in
Employee’s authority or responsibilities or if there is a reduction in Employee’s Base Salary or
Bonus target from the amount in effect immediately prior to the Change in Control or if Employee is
required by Employer to relocate from the city where Employee is residing immediately prior to the
Change in Control to a city located 50 or more miles from the aforementioned city. In the event of
a termination under this Section 13.E., Employer shall pay Employee an amount equal to two times
the sum of the annual Base Salary rate in effect at the time of termination and the Bonus target in
effect at the time of termination, all stock options, restricted stock grants and other incentive
awards shall vest in full and/or become immediately exercisable (and Employee shall be afforded the
opportunity to exercise same until the end of the Current Term). For the remainder of the Current
Term, Employer shall continue to provide Employee with medical, dental, vision and life insurance
coverage comparable to the medical, dental, vision and life insurance coverage in effect for
Employee immediately prior to the termination; and, to the extent that Employee would have been
eligible for any post-retirement medical, dental, vision or life insurance 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. Employee’s accrued
benefit under any nonqualified pension or deferred compensation plan maintained by Employer or any
Affiliate shall become immediately vested and nonforfeitable and Employee also shall be entitled to
receive a payment equal to the sum of (i) any forfeitable benefits under any qualified pension or
profit sharing or 401(k) plan maintained by Employer or any Affiliate plus (ii) if Employee is
participating in a qualified or nonqualified defined benefit plan of Employer or any Affiliate at
the time of termination, an amount equal to the present value of the additional benefits which
would have accrued for Employee under such plan if Employee’s employment had not terminated prior
to the end of the Current Term and if Employee’s annual Base Salary and Bonus target had neither
increased nor decreased after the termination. Finally, to the extent that Employee is deemed to
have received an excess parachute payment by reason of the Change in Control, Employer shall pay
Employee 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 any taxes imposed under section 4999 of
the Code. For purposes of this Section 13.E., “Current Term” means the one year period beginning
at the time of termination.

     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

10

 

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 Section 13.E.), upon the request of Employer,
Employee will execute 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.

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.

17. Governing Law. This agreement shall be governed by the laws of the State of Ohio.

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 any one 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.

11

 

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.

     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.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John F. Cassidy
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	John F. Cassidy- Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Gary J. Wojteszek	 	 
	 	 	 	 	 
	 	 	Gary Wojtaszek	 	 

12

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