Cincinnati Bell 2006 Annual Report Download - page 39

catastrophes; (xi) currency fluctuations; (xii) the issuance of stock options and/or other stock-based
compensation; (xiii) the early retirement of debt; and/or (xiv) the conversion of convertible debt securities.
6. Change in Control. In the event a change in control of the Company (as is defined in the terms of the
2007 Long Term Plan) occurs, then, in general terms and among other things (unless otherwise prescribed by the
terms of the applicable award): (i) all then outstanding stock options and SARs that were granted under the plan
will become exercisable in full; (ii) the restrictions still then in force and applicable to any common shares that
have been awarded under the plan as restricted stock shall lapse; and (iii) any performance share, share-based
performance unit, and nonshare-based performance unit awards granted under the plan shall become payable at
the maximum payment amount that was attainable under such awards if all performance goals and other criteria
or conditions applicable to the awards were satisfied.
In addition, unless otherwise prescribed by the Committee in an award, in the event of a change in control of
the Company, the Committee will have discretion (i) to pay in cash (in lieu of the right to exercise) the then value
of any then outstanding stock option or SAR provided that the then fair market value of the common shares that
are subject to such option or SAR exceeds such option’s or SAR’s purchase price or grant price as to such shares
and (ii) to pay in cash (instead of in common shares) the then value of any then outstanding performance share,
share-based performance unit, and nonshare-based performance unit awards.
7. Adjustments for Stock Dividends, Stock Splits, and Other Corporate Transactions. In the event of
any change affecting the Common Shares by reason of any stock dividend or split, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares, or other corporate change in the Company, or any
distributions to common shareholders of the Company other than cash dividends, the Committee will make such
adjustments in the aggregate number or class of Common Shares which may be distributed under the 2007 Long
Term Plan and in the number, class, and purchase, grant, or other price of shares on which the outstanding
awards granted under the plan are based as it determines to be necessary or appropriate to prevent any rights
provided under the plan and its awards from being enlarged or diluted by such event.
8. Fair Market Value of Common Shares. For purposes of the 2007 Long Term Plan, the fair market
value of a common share on any date shall generally be deemed to be the closing price of a common share on the
NYSE on such date (or, if no trading in any stocks occurred at all on such exchange on such date, on the next
subsequent date on which trading of stocks occurred on such exchange). If, however, common shares are not
listed or traded at all on the NYSE on any date as of which a common share’s fair market value is needed to be
determined for purposes of the plan, then the fair market value of a common share on such date will be
determined by the Committee in good faith.
9. Amendment and Termination. The 2007 Long Term Plan may generally be amended or terminated by
the Board, provided that no such action shall impair the rights of an employee with respect to a previously
granted award without the employee’s consent.
However, the 2007 Long Term Plan provides that no amendment to the plan shall be made without approval
of the Company’s shareholders: (i) if such amendment would increase the total number of common shares
reserved for issuance under all awards that may be granted under the plan; (ii) if such amendment would change
the class of employees eligible for awards under the plan; (iii) if such amendment would increase the total
number of shares reserved for issuance under all ISOs that may be granted under the plan; or (iv) if such
amendment would make any other change in the plan that is required by applicable law to be approved by the
Company’s shareholders in order to be effective.
Further, the purchase, grant, or other similar price applicable to any award granted under the 2007 Long
Term Plan, including a stock option or a SAR granted under the plan, cannot be reduced by any amendment to
the award, by the cancellation of the award and the granting of a new award, or by any other means unless such
reduction is approved by the Company’s shareholders.
10. Federal Income Tax Consequences. The following describes, in very general terms, the federal income
tax consequences arising with respect to awards granted under the 2007 Long Term Plan.
A stock option or SAR that is granted to an employee will generally create no tax consequences for the
employee or the Employer at the time of the grant of the award. Further, the employee will have no taxable
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Proxy Statement