Cincinnati Bell 2006 Annual Report Download - page 38

Such maximum number of common shares could be the basis of awards of any one of such forms (either
stock option, SAR, restricted stock, performance share, share-based performance unit, or non-restricted stock
awards) granted to an employee during any calendar year or divided among more than one of such forms of
awards that are granted to the employee during the year.
For example, if a SAR granted to an employee under the 2007 Long Term Plan during a certain calendar
year provides that the employee, if he or she properly exercises on any date the entire SAR, will receive payment
of a sum equal to the amount, if any, by which (i) the fair market value of 30,000 common shares as determined
as of the date on which the SAR is exercised exceeds (ii) the fair market value of such number of common shares
as determined as of the date on which the SAR was granted, then, for purposes of applying the above-described
1,000,000 common share limit to such employee for such calendar year, the maximum number of common shares
on which such SAR shall be deemed to be based is 30,000 common shares, regardless of whether or not the
employee actually exercises all or any part of the SAR and regardless of whether or not any payment made upon
the exercise of the SAR is made in cash, common shares or other property, or a combination thereof.
Similarly and for another example, if a share-based performance unit granted to an employee under the 2007
Long Term Plan during a certain calendar year provides that the employee will receive a maximum payment (of
cash, common shares or other property, or a combination thereof) that is equal to 200% of the fair market value
of 50,000 common shares as determined as of the date of payment if all of the performance goals and other
criteria or conditions required to be satisfied under the award are met (or will receive no payment if none, or a
lesser amount of payment if some but not all, of the performance goals and other criteria or conditions required to
be satisfied under the award are met), then, for purposes of applying the above-described 1,000,000 common
share limit to such employee for such calendar year, the maximum number of common shares on which such
share-based performance unit shall be deemed to be based is 50,000 common shares, regardless of whether or not
the share-based performance unit’s maximum payment actually becomes payable under the terms of the award.
(b) The maximum value that is payable under all nonshare-based performance unit awards granted under the
plan to any person during each and any calendar year shall be $5,000,000.
5. 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 2007 Long Term Plan, the Committee
may base such performance goals on, and only on, one or more of the following criteria: (i) free cash flow (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); (ii) EBITDA (earnings
before interest, taxes, depreciation, and amortization); (iii) earnings per share; (iv) operating income; (v) total
shareholder returns; (vi) profit targets; (vii) revenue targets; (viii) profitability targets as measured by return
ratios; (ix) net income; (x) return on sales; (xi) return on assets; (xii) return on equity; and (xiii) corporate
performance indicators (indices based on the level of certain services provided to customers).
Any performance criteria shall be measured or determined on the basis of a period of not less than one year
or in excess of ten years and shall be able to be objectively determined by the Committee. In addition, any such
performance criteria (i) may be measured or determined for the Company, for any organization other than the
Company that is part of the Employer, for the entire Employer in the aggregate, or for any group of corporations
or organizations that are included in the Employer and (ii) may also be measured and determined in an absolute
sense and/or in comparison to the analogous performance criteria of other publicly-traded companies (that are
selected for such comparison purposes by the Committee).
Further, the Committee may provide in the terms of an award granted under the 2007 Long Term Plan that,
in determining whether any of the above listed performance criteria has been attained, certain special or technical
factors shall be ignored or, conversely, taken into account, in whole or in part. Such special factors may include,
but are not limited to, the gain, loss, or other impact of any one or more of the following: (i) changes in generally
accepted accounting principles; (ii) an extraordinary event; (iii) nonrecurring events; (iv) the disposition of a
business, in whole or in part, the sale of investments or non-core assets, or discontinued operations, categories, or
segments of businesses; (v) claims and/or litigation and insurance recoveries relating to claims or litigation;
(vi) the impairment of tangible or intangible assets; (vii) restructuring activities, including reductions in force;
(viii) investments or acquisitions; (ix) political and legal changes that impact operations, as a consequence of
war, insurrection, riot, terrorism, confiscation, expropriation, business interruption, or similar events; (x) natural
26