Cincinnati Bell 2011 Annual Report Download - page 27

Non-Employee Directors Plan
The Company grants its non-employee directors time-based restricted shares and/or options to purchase
common shares under the Cincinnati Bell Inc. 2007 Stock Option Plan for Non-Employee Directors (the “2007
Directors Plan”). Pursuant to the current terms of such plan, each non-employee director of the Company, at the
discretion of the Board, may be granted a number of restricted common shares and/or a stock option for a number
of common shares (as determined by the Board) on the date of each annual meeting, if such director first became
a non-employee director of the Company before the date of such annual meeting, and continues in office as a
non-employee director after such meeting.
As described in more detail on page 27, the shareholders of the Company are being asked to approve an
amendment to the 2007 Directors Plan. The amendment, if approved, would permit all of the shares available for
issuance under the 2007 Directors Plan to be issued in the form of restricted stock awards. Currently, only a
portion of the shares available for issuance under the 2007 Directors Plan may be issued in the form of restricted
stock awards. The current terms of the 2007 Directors Plan permit all of the shares available for issuance under
the plan to be issued in the form of stock option awards.
For 2010 and earlier, the Board decided to annually grant time-based restricted shares with an aggregate
value of $35,000 on the date of grant to each incumbent non-employee director. In 2011, because of the restricted
share limits set forth in the 2007 Directors Plan, the Board granted time-based restricted shares with an aggregate
value of $28,438 on the date of grant to each incumbent non-employee director. Beginning in 2012, assuming
that the shareholders approve the amendment to the 2007 Directors Plan described on page 27, the Board has
decided to annually grant time-based restricted shares with an aggregate value of $70,000 on the date of grant to
each incumbent non-employee director. These restricted shares will vest on the third anniversary of the grant
date. The Board increased the annual grant value to offset the elimination of the annual phantom share grant in
2012. If the shareholders do not approve the amendment to the 2007 Directors Plan described on page 27, no
further restricted stock awards will be granted under the 2007 Directors Plan.
The Board will exercise its discretion in granting such options and/or time-based restricted shares with the
intent that such grants, together with other Company equity-based compensation, provide Company equity-based
compensation that is competitive with the value of equity-based compensation provided by comparable
companies to their non-employee directors.
Each stock option granted to a non-employee director under the 2007 Directors Plan, or a predecessor plan,
requires that upon the exercise of the option, the price to be paid for the common shares that are being purchased
under the option will be equal to 100% of the fair market value of such shares as determined at the time the
option is granted. With certain exceptions provided in the 2007 Directors Plan, a non-employee director of the
Company who is granted an option under the plan generally will have ten years from the date of the grant to
exercise the option.
In general, each restricted share award will require that the restrictions not lapse in full unless the
non-employee director continues to serve as a director of the Company for at least three years after the award
grant date or ends service as a Company director under special circumstances (e.g., death, disability, or attaining
retirement age).
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Proxy Statement