Cincinnati Bell 2006 Annual Report Download - page 86

or not the applicable stock option is intended to be an ISO (or, if it does not so indicate, the stock option reflected
by such written agreement shall be deemed to be a stock option that is not an ISO).
7.3 Exercise Price of Stock Option. Unless otherwise prescribed by the Committee to be higher, the
Exercise Price with respect to any number of Common Shares that are subject to a stock option granted under the
Plan shall be 100% (and may not in any event be less than 100%) of the fair market value of such number of
Common Shares (disregarding lapse restrictions as defined in Regulation 1.83-3(i)) on the date the stock option
is granted.
7.4 Expiration of Option. Unless otherwise prescribed by the Committee, any stock option granted under
the Plan shall be exercisable in whole or in part after but not before the expiration of one year after the date on
which it is granted. Further, a stock option granted under the Plan shall not in any event be exercisable after the
expiration of ten years after the date on which it is granted (or after any earlier expiration date that is otherwise
prescribed for the stock option by the Committee).
7.5 Procedures for Exercise of Option.
(a) With respect to each exercise of a stock option granted under the Plan, written notice of the
exercise must be given and the purchase price for the Common Shares being purchased upon the exercise
and any taxes required to be withheld upon the exercise must be paid in full at the time of the exercise. The
procedures for meeting such requirements shall be established under the provisions of section 17 hereof.
(b) As soon as administratively practical after the receipt of the written notice and full payment
applicable to the exercise of any stock option granted under the Plan in accordance with the procedures
established under the provisions of section 17 hereof, CBI shall deliver to the applicable Participant (or such
other person who is exercising the stock option) a certificate or certificates representing the acquired
Common Shares.
7.6 Special Limit on Value of ISOs. If the aggregate fair market value of all Common Shares with respect
to which stock options that are intended to be ISOs and that are exercisable for the first time by any Participant
during any calendar year (under the Plan and all other plans of the Company) exceeds $100,000 (or, if such limit
amount is amended under Section 422 of the Code, such amended limit amount), such stock options (to the
extent of such excess) shall be treated as if they were not ISOs. The rule set forth in the immediately preceding
sentence shall be applied by taking stock options into account in the order in which they were granted. Also, for
purposes of the rules of this subsection 7.6, the fair market value of any Common Shares which are subject to a
stock option shall be determined as of the date the option is granted.
7.7 Ineligibility of Certain Employees for ISOs. Notwithstanding any other provision of the Plan to the
contrary, no person shall be eligible for or granted a stock option under the Plan that is intended to be an ISO if,
at the time the stock option is otherwise to be granted, the person owns more than 10% of the total combined
voting power of all classes of stock of the Company. For purposes hereof, a person shall be considered as owning
the stock owned, directly or indirectly, by or for his or her brothers or sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants, and stock owned, directly or indirectly, by or for a corporation,
partnership, estate, or trust shall be considered as being owned proportionately by or for its shareholders,
partners, or beneficiaries.
8. Stock Appreciation Right Awards. Any awards granted under the Plan in the form of stock appreciation
rights (for purposes of this section 8, “SARs”) shall be subject to the following terms and conditions of this
section 8.
8.1 Nature of SAR. A SAR means the right, upon any exercise of the SAR, to receive payment of a sum
not to exceed the amount, if any, by which the fair market value (determined as of the date on which the SAR is
exercised and disregarding lapse restrictions as defined in Regulation 1.83-3(i)) of a number of Common Shares,
up to a fixed maximum number of Common Shares, exceeds a fixed price (for purposes of this section 8, the
“Exercise Price”) of the Common Shares to which the exercise relates. A SAR may be granted free-standing, in
relation to a new stock option being granted at the same time as the SAR is granted, or in relation to a stock
option both which is not an ISO and which has been granted prior to the grant of the SAR.
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