Cincinnati Bell 2006 Annual Report Download - page 43

The Board shall exercise its discretion when taking any action described above with the intent that the
awards it changes or makes under such action, together with other compensation provided the Outside Directors
that is either paid in the form of common shares or has its value determined in relation to the value of common
shares (“equity-based compensation”), provides equity-based compensation for the Outside Directors that each
year is approximately equal to the median level of the value of equity-based compensation provided by a group
of comparable peer group companies to their non-employee directors.
5. Shares Reserved For Issuance. Subject to adjustment in the case of certain changes in the capital
structure of the Company, the following limits apply to the number of common shares that may be issued or paid
under or with respect to awards granted under the 2007 Directors Plan:
(a) The maximum number of common shares which may be issued or paid under or with respect to all of the
awards (considered in the aggregate) granted under the plan during the plan’s entire existence shall be equal to
1,000,000 common shares.
(b) The maximum number of common shares which may be issued or paid under or with respect to all stock
options (considered in the aggregate but separately from all restricted stock awards) granted under the plan
during the plan’s entire existence shall be equal to 1,000,000 common shares.
(c) The maximum number of common shares which may be issued or paid under or with respect to all
restricted stock awards (considered in the aggregate but separately from all stock option awards) granted under
the plan during the plan’s entire existence shall be equal to 300,000 common shares.
6. Change in Control. In the event a change in control of the Company (as is defined in the terms of the
2007 Directors 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 that were granted under the plan will
become exercisable in full; and (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.
In addition, unless otherwise prescribed by the Board in an award, in the event of a change in control of the
Company, the Board will have discretion to pay in cash (in lieu of the right to exercise) the then value of any then
outstanding stock option provided that the then fair market value of the common shares that are subject to such
option exceeds such option’s purchase price as to such shares.
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 Board will make such
adjustments in the aggregate number or class of common shares which may be distributed under the 2007
Directors Plan and in the number, class, and purchase 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 Directors 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 Board in good faith.
9. Amendment and Termination. The 2007 Directors Plan may generally be amended or terminated by the
Board, provided that no such action shall impair the rights of an Outside Director with respect to a previously
granted award without the Outside Director’s consent.
However, the 2007 Directors 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
persons eligible for awards under the plan; or (iii) 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.
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Proxy Statement