Cincinnati Bell 2008 Annual Report Download - page 94

12. Fair Market Value of Common Shares.For purposes of the Plan, the fair market value of a Common Share
on any date (for purposes of this section 12, the “subject date”) shall be deemed to be the closing price of a
Common Share on the New York Stock Exchange on the subject date (or, if no trading in any stocks occurred at
all on such exchange on the subject date, on the next subsequent date on which trading of stocks occurred on
such exchange). Notwithstanding the foregoing, if Common Shares are not listed or traded at all on the New
York Stock Exchange on the date as of which a Common Share’s fair market value for the subject date is to be
determined under the terms of the immediately preceding sentence, then the fair market value of a Common
Share on the subject date shall be determined by the Committee in good faith pursuant to methods and
procedures established by the Committee.
13. Performance Goals.
13.1 Criteria for Performance Goals.To the extent the meeting of performance goals set by the Committee
may be a condition to the exercise of or payment under any award granted under the Plan, the Committee may
base such performance goals on, and only on, one or more of the following criteria applicable to the Company:
(a) free cash flow (defined as cash generated by operating activities, minus capital expenditures and
other investing activities, dividend payments and proceeds from the issuance of equity securities, and
proceeds from the sale of assets);
(b) earnings before interest, taxes, depreciation, and amortization;
(c) earnings per share;
(d) operating income;
(e) total shareholder returns;
(f) profit targets;
(g) revenue targets;
(h) profitability targets as measured by return ratios;
(i) net income;
(j) return on sales;
(k) return on assets;
(l) return on equity; and
(m) corporate performance indicators (indices based on the level of certain services provided to
customers).
13.2 Method By Which Performance Criteria Can Be Measured.
(a) Any performance criteria described in subsection 13.1 hereof that is used to determine the
performance goals applicable to an award granted under the Plan shall be measured or determined on the
basis of a period of such duration (for purposes of this subsection 13.2, a “performance period”), which
period may be of any length, but not less than one year or in excess of ten years, as is set by the Committee
either prior to the start of such period or within its first 90 days (provided that the performance criteria is not
in any event set after 25% or more of the applicable performance period has elapsed) and shall be criteria
that will be able to be objectively determined by the Committee.
(b) Further, the Committee may provide in the terms of an award granted under the Plan that any factor
used to help determine any performance criteria identified in subsection 13.1 hereof shall be taken into
account only to the extent it exceeds or, conversely, is less than a certain amount. The Committee may also
provide in the terms of an award granted under the Plan that, in determining whether any performance
criteria identified in subsection 13.1 hereof has been attained, certain special or technical factors shall be
ignored or, conversely, taken into account, in whole or in part, including but not limited to any one or more
of the following factors:
(1) a gain, loss, income, or expense resulting from changes in generally accepted accounting
principles that become effective during the applicable performance period or any previous period;
A-10