Cincinnati Bell 2006 Annual Report Download - page 106

9. 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 9, 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 Board in good faith pursuant to methods and procedures
established by the Board.
10. Nonassignability of Awards. Except as may be required by applicable law, no award granted under the Plan
to an Outside Director may be assigned, transferred, pledged, or otherwise encumbered by the Outside Director
otherwise than by will, by designation of a beneficiary to take effect after the Outside Director’s death, or by the
laws of descent and distribution. Each stock option award shall be exercisable during the Outside Director’s
lifetime only by the Outside Director (or, if permissible under applicable law, by the Outside Director’s guardian
or legal representative). Notwithstanding the foregoing provisions of this section 10, the Board may, in its
discretion, permit transfers of stock option awards by gift or otherwise, subject to such terms and conditions as
the Board may prescribe.
11. Provisions Upon Change in Control.
11.1 Effect of Change in Control on Awards. In the event a Change in Control occurs on or after the
Effective Date, then, unless otherwise prescribed by the Board in the terms of an applicable award, (i) all
outstanding stock options granted under the Plan to an Outside Director shall immediately become exercisable in
full upon the date of the Change in Control and (ii) the restrictions still then in force and applicable to any
Common Shares awarded as restricted stock under the Plan to an Outside Director shall immediately lapse upon
the date of the Change in Control.
11.2 Cashout of Stock Options. In addition, unless the Board shall otherwise prescribe in the terms of a
stock option that was awarded under the Plan, in the event of a Change in Control the Board shall have discretion
to cause a cash payment to be made to the person who then holds such stock option, in lieu of the right to
exercise such stock option or any portion thereof, provided (i) that such stock option is still outstanding as of the
Change in Control and (ii) that the aggregate fair market value (on the date of the Change in Control) of the
Common Shares that are subject to such stock option exceeds the aggregate exercise price of such Common
Shares under such stock option. In the event the Board exercises its discretion to cause such cash payment to be
made, the amount of such cash payment shall be equal to the amount by which (i) the aggregate fair market value
(on the date of the Change in Control) of the Common Shares that are subject to such stock option exceeds
(ii) the aggregate exercise price of such Common Shares under such stock option.
11.3 Definition of Change in Control. For purposes of the Plan, a “Change in Control” means the
occurrence of any one of the events described in the following paragraphs of this subsection 11.3.
(a) A majority of the Board as of any date not being composed of Incumbent Directors. For purposes
of this subsection 11.3, as of any date, the term “Incumbent Director” means any individual who is a
director of CBI as of such date and either: (i) who was a director of CBI at the beginning of the 24
consecutive month period ending on such date; or (ii) who became a CBI director subsequent to the
beginning of such 24 consecutive month period and whose appointment, election, or nomination for election
was approved by a vote of at least two-thirds of the CBI directors who were, as of the date of such vote,
Incumbent Directors (either by a specific vote or by approval of the proxy statement of CBI in which such
person is named as a nominee for director). It is provided, however, that no individual initially appointed,
elected, or nominated as a director of CBI as a result of an actual or threatened election contest with respect
to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf
of any person other than the Board shall ever be deemed to be an Incumbent Director.
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