Cincinnati Bell 2006 Annual Report Download - page 104

7. Stock Option Awards. Any awards granted under the Plan in the form of stock options shall be subject to the
following terms and conditions of this section 7.
7.1 Nature of Stock Option. A stock option means an option to purchase any number of Common Shares,
up to a fixed maximum number of Common Shares, in the future at a fixed price (for purposes of this section 7,
the “Exercise Price”) that applies to the Common Shares to which the purchase relates. Stock options granted
under the Plan to any Outside Director shall be stock options that are not incentive stock options (within the
meaning of Section 422 of the Code).
7.2 Terms and Conditions of Stock Option To Be Determined by Board. Subject to the other provisions
of this section 7 and the other sections of the Plan, the terms and conditions of any stock option granted under the
Plan shall be determined by the Board. The grant of a stock option shall be evidenced by a written agreement
signed by the Board or a representative thereof, which agreement shall contain the terms and conditions of the
stock option (as set by the Board).
7.3 Exercise Price of Stock Option. Unless otherwise prescribed by the Board 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 Stock Option.
(a) Unless otherwise prescribed by the Board, any stock option granted under the Plan shall be
exercisable in whole or in part at any time after the date on which it is granted. However, subject to the
provisions of paragraph (b) of this subsection 7.4, 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 Board).
(b) Unless otherwise prescribed by the Board and subject in any event to the provisions of paragraph
(a) of this subsection 7.4, if an Outside Director ceases to be a director of CBI other than for death or
Retirement when still eligible to exercise a stock option granted to him or her under the Plan (to the extent
such stock option has not previously been exercised), such stock option shall no longer be exercisable after
the earlier of the expiration of ten years after the date on which the stock option was granted or the
expiration of six months after the date on which the Outside Director ceased to be a director of CBI; except
that, if such Outside Director dies after he or she ceased to be a director of CBI but prior to the expiration of
six months after the date on which he or she ceased to be a director of CBI, the first reference in this
paragraph (b) to “six months” shall be deemed to be a reference to “one year.”
7.5 Procedures for Exercise of Stock 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 13 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 13 hereof, CBI shall deliver to the applicable Outside Director
(or such other person who is exercising the stock option) a certificate or certificates representing the
acquired Common Shares.
8. Restricted Stock Awards. Any awards granted under the Plan in the form of restricted stock shall be subject
to the following terms and conditions of this section 8.
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