Document:

exv10w4

 

Exhibit 10.4

LodgeNet Entertainment Corporation 2003 Stock Option and

Incentive Plan Restricted Stock Award Agreement

(Time-Based Vesting)

Name: James G. Naro

Date of Award: 6-26-06

Number of Shares of Restricted Stock Awarded: 3,000

This Agreement, effective as of the Date of Award, represents an award of Restricted
Stock by LodgeNet Entertainment Corporation, a Delaware corporation (the “Company”),
to you, pursuant to the provisions of the LodgeNet Entertainment Corporation 2003
Stock Option and Incentive Plan (the “Plan”).

The Plan provides a description of the general terms and conditions governing the
Restricted Stock awarded hereunder. The parties hereto also agree to the following
additional terms and conditions governing this award of Restricted Stock:

     1. Termination of Risk of Forfeiture. The shares awarded hereby are subject to a risk of
forfeiture. Subject to Section 15 hereof (which provides for accelerated termination of risk of
forfeiture under the conditions set forth therein), and Section 8 hereof (which provides for
accelerated termination of the risk of forfeiture in the event of death or, in certain cases,
retirement or disability and adjustment thereto), the risk of forfeiture with respect to fifty
percent (50%) of the Restricted Stock (the “First Shares”) shall terminate on June 25, 2009, and
the risk of forfeiture with respect to fifty percent (50%) of the Restricted Stock (the “Second
Shares”) shall terminate on June 25, 2010 but, except as otherwise provided herein, only if you
have been continuously employed by the Company from the Date of Award (excluding any periods during
which you are on approved leaves of absence) up to and including each respective termination date.
The period between the date of this award and the date on which the risk of forfeiture terminates
for a portion of the shares awarded hereby is hereinafter referred to as the “Restriction Period”
with respect to such shares.

     2. Restricted Stock Certificates. Any Restricted Stock granted to you hereunder

shall be held by the Corporate Secretary of the Company or designee until such time as the
restrictions terminate or the Restricted Stock is forfeited.

     3. Certificate Legend. Each stock certificate representing shares of Restricted Stock granted
hereunder shall bear the following legend:

“The sale or other transfer of the shares of common stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject to
certain restrictions on transfer set forth in the LodgeNet Entertainment Corporation
2003 Stock Option and Incentive Plan and a LodgeNet Entertainment Corporation 2003
Stock Option and Incentive Plan Restricted Stock Award Agreement dated June 26,
2006.”

 

 

     4. Removal of Restrictions. When your Restricted Stock is no longer subject to the terms of
this Agreement, you will be entitled to have the legend required by Section 3 of this Agreement
removed from the stock certificates representing your shares of Restricted Stock and such
certificates will be distributed to you. The Company shall have no obligation to issue fractional
shares; all share amounts shall be rounded to the nearest whole amount.

     5. Voting Rights and Dividends. You may exercise full voting rights and shall receive any
dividends and other distributions paid with respect to the shares of Restricted Stock. If any such
dividends or distributions are paid in shares of common stock of the Company, those shares shall be
subject to the same restrictions on transferability as the shares of Restricted Stock under this
Agreement.

     6. No Employment Obligation. The award of the Restricted Stock hereunder shall not impose
upon the Company a separate obligation to employ you for any given period, or on any specific terms
of employment.

     7. Forfeiture. Any Restricted Stock granted to you hereunder shall be forfeited, and such
shares of Restricted Stock shall revert to the Company, without any obligation of the Company to
pay you any consideration therefor if, during the Restriction period, (i) you violate the terms of
this Agreement or (ii) your employment with the Company terminates during the term of this
Agreement (other than under the conditions set forth in Sections 8 or 15 hereof which entitle you
to accelerated termination of the risk of forfeiture). The Company shall initiate a forfeiture of
Restricted Stock pursuant to this Section 7 by giving notice to you at any time within the
thirty-day (30) period following the date of forfeiture. Upon the giving of such notice, the
Corporate Secretary of the Company shall promptly cancel the forfeited shares of Restricted Stock
and the stock register of the Company shall be revised accordingly. You are obligated to return to
the Company any certificates representing such forfeited shares, but your failure to do so shall
not affect the forfeiture or cancellation of such shares. You shall have no rights as a
stockholder of the Company with respect to forfeited and cancelled shares.

     8. Termination of Employment Due to Death, Disability or Retirement. If your employment is
terminated due to Death during the Restriction Period, the restrictions on any shares of Restricted
Stock shall terminate at the time of Death and the Restricted Stock shall be delivered to your
estate. In the event your employment is terminated due to Disability or Retirement (defined for
this purpose as the voluntary termination of full-time employment after reaching the age of 62)
during the Restriction Period, unless otherwise determined by the Compensation Committee of the
Company’s Board of Directors (the “Compensation Committee”), a pro rata number of the First Shares
or the Second Shares which have not vested, as applicable, shall be fully vested. For purposes
hereof, the pro rata number of First Shares or Second Shares, if any, vesting in accordance with
the foregoing shall be determined by the number of days of continuous employment through that date
on which your Disability is finally determined or through the date of your Retirement as with
respect to the First Shares and Second shares individually.

     9. Termination of Employment for Other Reasons. If your employment with the Company is
terminated for any reason other than those reasons set forth in Sections 8 or 15

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hereof, including without limitation a termination of your employment with or without cause,
all shares of Restricted Stock held by you at the time of such employment termination, as to which
the restrictions have not terminated, shall be forfeited by you to the Company, in accordance with
the provisions of Section 7 hereof.

     10. Acceleration. Notwithstanding anything to the contrary contained herein, the Compensation
Committee shall always have the power, in its sole discretion, to accelerate the dates of the
termination of risk of forfeiture.

     11. Nontransferability. Restricted Stock awarded pursuant to this Agreement and subject to a
risk of forfeiture may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated (each, a “Transfer”), other than by will or by the laws of descent and distribution.
If any Transfer, whether voluntary or involuntary, of Restricted Stock, as to which the
restrictions have not terminated, is made, or if any attachment, execution, garnishment, or lien
shall be issued against or placed upon the Restricted Stock, as to which the restrictions have not
terminated, such Restricted Stock shall be immediately forfeited by you to the Company, and this
Agreement shall be of no further effect.

     12. Tax Withholding. The Company shall have the power and the right to deduct or withhold,
or require you or your estate to remit to the Company, an amount sufficient to satisfy federal,
state, and local taxes, domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of this Agreement.

     13. Share Withholding. With respect to withholding required upon any other taxable event
arising as a result of Restricted Stock awards granted hereunder, you may elect, subject to the
approval of the Compensation Committee, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold shares having a fair market value on the date the tax is to be
determined equal to the minimum statutory total tax which could be withheld on the transaction.
All such elections shall be irrevocable, made in writing, signed by you, and shall be subject to
any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

     14. Administration. This Agreement and your rights hereunder are subject to all the terms
and conditions of the Plan, as the same may be amended from time to time, as well as to such rules
and regulations as the Committee may adopt for administration of the Plan. It is expressly
understood that the Committee is authorized to administer, construe, and make all determinations
necessary or appropriate to the administration of the Plan and this Agreement, all of which shall
be binding upon the Participant. Any inconsistency between this Agreement and the Plan shall be
resolved in favor of this Agreement.

     15. Acceleration of Termination Date.

	 	a.	 	If, in connection with or within two (2) years following the occurrence
of a Change in Control (as defined in subsection 15 (b) below), your employment
with the Company terminates voluntarily for Good Reason (as defined in subsection
15 (b) below), or involuntarily for any reason other than for Cause (as defined in

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	 	 	 	subsection 15 (b) below), the risk of forfeiture for all outstanding shares of
Restricted Stock as to which the risk of forfeiture was not previously terminated
pursuant to the terms of Section 1 hereof shall, without further action, terminate
as of the date of such employment termination.
	 
	 	b.	 	For purposes hereof: (i) termination of employment for “Cause” shall
mean termination of your employment by the Company or any of its subsidiaries
because of: (A) your dishonesty, fraud or breach of trust or substantial misconduct
in the performance of, or substantial nonperformance of, your duties, (B) any act
or omission by you that is a substantial cause for a regulatory body with
jurisdiction over the Company or any of its subsidiaries to request or recommend
your suspension or removal or to impose sanctions upon the Company, or (C) a
material breach by you of any applicable employment agreement between you and the
Company or any of its subsidiaries; (ii) termination with “Good Reason” shall mean
voluntary termination of your employment because, without your express written
consent: (A) the Company or any subsidiary materially breaches any of the terms of
an employment agreement, severance agreement or other compensation arrangement
between the Company or any of its subsidiaries and you, (B) you are assigned duties
materially inconsistent with your position, duties, and status immediately prior
the Change in Control, (C) the Company or any subsidiary reduces your base salary
and/or benefits under the Company’s or a subsidiary’s incentive, stock option,
retirement, welfare, disability, health, insurance, benefit or other compensatory
plan (including, without limitation, cash paid in lieu of any such benefit) in
existence immediately prior to the Change in Control (without substitution of a
substantially equivalent plan or benefit), such that your compensation, in the
aggregate, has been materially reduced, or (D) failure by the Company to cause any
successor or resulting entity to expressly assume and agree to perform the
Company’s obligations under this Agreement; and (iii) a “Change in Control” shall
mean the occurrence of any of the following: (A) any person (as such term is used
in Section 13 of the Securities Exchange Act of 1934 (the “Exchange Act”) and the
rules and regulations thereunder and including any Affiliate or Associate of such
person, as defined in Rule 12b-2 under said Act, and any person acting in concert
with such person), directly or indirectly, acquires or otherwise becomes the
“beneficial owner” (as such term is defined in Rule 13d-3 of the Exchange Act,
except that a person or entity shall also be deemed the beneficial owner of all
securities which such person or entity may have a right to acquire, whether or not
such right is presently exercisable) of securities representing thirty percent
(30%) or more of the voting power entitled to be cast at elections for directors
(“Voting Power”) of the Company; or (B) there occurs any merger or consolidation
(in one or more transactions) of the Company, or any sale, lease or exchange (in
one or more transactions) of all or any substantial part of the consolidated assets
of the Company (meaning assets representing thirty percent (30%) or more of the
Company’s consolidated net tangible assets or generating thirty percent (30%) or
more of the Company’s consolidated operating cash flow, in each case as measured
over the Company’s preceding four full fiscal quarters) to any other person and (y)
in the case of a

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	 	 	 	merger or consolidation, the holders of outstanding stock of the Company entitled to
vote in elections of directors immediately before such merger or consolidation
(excluding for this purpose any person (including any Affiliate or Associate) that
directly or indirectly owns or is entitled to vote thirty percent (30%) of more of
the Voting Power of the Company) hold less than seventy percent (70%) of the Voting
Power of the survivor of such merger or consolidation or its parent, or (z) in the
case of any such sale, lease or exchange, the Company does not own more than fifty
percent (50%) of the Voting Power of the other person; or (C) during any period
subsequent hereto, a majority of the Company’s directors shall not for any reason be
board members who at the beginning of such period constituted a majority of the
Board of Directors or persons nominated as new directors by a majority of such
continuing directors.

     16. Miscellaneous.

	 	a.	 	All obligations of the Company under the Plan and this Agreement, with
respect to the Restricted Stock, shall be binding on any successor as to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially all
of the business and/or assets of the Company.
	 
	 	b.	 	To the extent not preempted by federal law, this Agreement shall be
governed by, and construed in accordance with, the laws of the State of Delaware,
without regard to such jurisdiction’s conflict of laws principles.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed effective as of the
Date of Award first above written.

	 	 	 	 	 
	 	LODGENET ENTERTAINMENT CORPORATION

 	 
	 	By:  	/s/ Gary H. Ritondaro
 	 
	 	 	Gary H. Ritondaro – SVP/CFO 	 
	 	 	 	 
	 

5exv4w3

 

EXHIBIT 4.3

BROADWING CORPORATION

AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

 

 

BROADWING CORPORATION

AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

          1. Purpose; Effective Date. The Broadwing Corporation Amended and Restated Employee
Stock Purchase Plan has been established to provide employees of Broadwing Corporation
(“Broadwing”) and its Participating Subsidiaries (as defined below) with an opportunity to become
owners of Broadwing through the purchase of shares of Broadwing’s common stock (“Stock”). For
purposes of the Plan, the term “Participating Subsidiary” means any corporation in which Broadwing
has, either directly or indirectly, at least a 50 percent ownership interest and which has been
designated by Broadwing as a Participating Subsidiary. It is intended that the Plan, and all
rights granted hereunder, will meet the requirements of an “employee stock purchase plan” within
the meaning of section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). The
Plan, in all respects, shall be interpreted and construed so as to be consistent with such
requirements. The Plan shall be effective as of the date of the final prospectus relating to the
initial public offering of the Stock (the “Effective Date”) and shall remain in effect until all
shares reserved for issuance hereunder have been issued or until the Plan is otherwise terminated
in accordance with the provisions of Section 10 hereof.

          2. Administration by Committee; Authority. The Plan shall be administered by the
Compensation Committee of Broadwing’s Board of Directors (the “Committee”). Subject to the terms
and conditions of the Plan, the Committee shall have the authority to (a) manage and control the
operation of the Plan; (b) conclusively interpret and construe the provisions of the Plan, and
prescribe, amend and rescind rules, regulations and procedures relating to the Plan; (c) correct
any defect or omission and reconcile any inconsistency in the Plan; and (d) make all other
determinations and take all other actions as it deems necessary or desirable for the implementation
and administration of the Plan. The determination of the Committee on matters within its authority
shall be conclusive and binding on Broadwing, the Participating Subsidiaries and all other persons.

          3. Participation. Subject to the terms and conditions of the Plan, each regular,
full-time or part-time employee of Broadwing and the Participating Subsidiaries who regularly works
more than 20 hours per week shall be eligible to participate in the Plan for an Offering Period (as
defined below) if, as of the first day of the Offering Period, he is employed by Broadwing or a
Participating Subsidiary; provided, however, that, notwithstanding any other provision of the Plan,
individuals who are not treated as common law employees by Broadwing and the Participating
Subsidiaries on their payroll records are excluded from Plan participation even if a court or
administrative agency determines that such individuals are common law employees and not independent
contractors. For purposes of the Plan, an “Offering Period” means (1) the period beginning on the
Effective Date ending on the June 30 or December 31 which is nearest to the 24 month anniversary of
the Effective Date (but not more than 27 months after the Effective Date), (2) the six month
period beginning on the first January 1 or July 1 next following the Effective Date and ending on
the next following June 30 or December 31, as applicable, and (3) the six month period commencing
on the first July 1 or January 1, as applicable, immediately following the last day of the Offering
Period described in paragraph (2) and ending on the next following June 30 or December 31, as
applicable, and each six month period thereafter. An employee who is eligible to participate in
the Plan for an Offering Period may elect to become a “Participant” in the Plan for that Offering
Period by completing and filing

 

 

with Broadwing, or its designee, an “Election Form” which authorizes payroll deductions from
the Participant’s pay. Subject to the terms and conditions of the Plan, deductions pursuant to a
Participant’s Election Form shall commence with the first payroll period ending after the first day
of the Offering Period, shall continue until the Participant terminates participation in the Plan
in accordance herewith or until the Plan is terminated, whichever occurs first, and shall be
credited to his Plan Account (as described in paragraph 6(d)). An eligible employee may participate
in the Plan only through payroll deductions. Other contributions will not be accepted. All
Election Forms shall be filed in accordance with uniform and nondiscriminatory rules established by
the Committee.

          4. Shares Subject to Plan.

	 	(a)	 	Number of Shares Reserved. The shares of Stock which may be issued
under the Plan shall be shares currently authorized but unissued or currently held or
subsequently acquired by Broadwing as treasury shares, including shares purchased in
the open market or in private transactions. Subject to the provisions of paragraph
4(c), the number of shares of Stock which may be issued under the Plan during the term
of the Plan may not exceed 3,500,000 in the aggregate.
	 
	 	(b)	 	Reusage of Shares. In the event of the expiration, withdrawal or other
cancellation of an Option (as defined in Section 5) under the
Plan, the number of shares of Stock that were subject to the Option but not delivered shall again be
available for issuance under the Plan.
	 
	 	(c)	 	Adjustments to Shares Reserved. In the event of any transaction
involving Broadwing (including, without limitation, any merger, consolidation,
reorganization, recapitalization, spinoff, stock dividend, extraordinary cash dividend,
stock split, reverse stock split, combination, exchange or other distribution with
respect to shares of Stock or other change in the corporate structure or capitalization
affecting the Stock), the Committee may make adjustments to Options under the Plan to
preserve the benefits or potential benefits of the Options. Action by the Committee
may include (i) adjustment of the number and kind of shares which are or may be subject
to Options under the Plan (ii) adjustment of the number and kind of shares subject to
outstanding Options under the Plan, (iii) adjustment to the exercise price of
outstanding Options under the Plan, and (iv) any other adjustments that the Committee
determines to be equitable.
	 
	 	(d)	 	Insufficient Shares. If, on an Exercise Date (as defined in paragraph
8(a)), Participants in the aggregate have outstanding Options to purchase more shares
of Stock than are then available for purchase under the Plan, each Participant shall be
eligible to purchase a reduced number of shares of Stock on a pro rata basis and any
excess payroll deductions shall be returned to such Participants, without interest, all
as provided by uniform and nondiscriminatory rules adopted by the Committee.

 

 

     5. Grant of Options. As of the first day of each Offering Period (the “Grant
Date”), each employee who is a Participant for such Offering Period shall be deemed to have been
granted an “Option” under the Plan; provided, however, that:

	 	(a)	 	no Participant shall be granted an Option to purchase shares
of Stock on any Grant
Date if such Participant, immediately after the Option is granted, owns stock
possessing 5% or more of the total combined voting power or value of all classes of
stock of Broadwing or any subsidiary of Broadwing (determined in accordance with
section 424(f) of the Code (each a “Subsidiary”)); and
	 
	 	(b)	 	no Participant may purchase under the Plan (or any other employee stock
purchase plan of Broadwing or any Subsidiary) more than $25,000 of Fair Market Value
(as defined in paragraph 9(h)) of shares of Stock (determined at the Grant Date) for
each calendar year.

The provisions of paragraph 5(b) shall be interpreted in accordance with section 423(b)(8) of the
Code. For purposes of this Section 5, the rules of section 424(d) of the Code shall apply in
determining the stock ownership of an individual, and Stock which the Participant may purchase
under outstanding Options shall be treated as Stock owned by the Participant.

     6. Payroll Deductions.

	 	(a)	 	Source and Amount of Payroll Deductions. Payroll deductions shall be
made from the Base Earnings (as defined in paragraph 6(e)) paid to each Participant for
each payroll period in such amounts as the Participant shall authorize in his Election
Form. Subject to the provisions of Section 5, the Committee may, from time to time,
establish uniform and nondiscriminatory minimum and maximum payroll deductions for any
period. Unless otherwise specified by the Committee, payroll deductions for any
payroll period must be made in whole percentage increments and may not exceed 15% of
the Participant’s Base Earnings for that payroll period.
	 
	 	(b)	 	Insufficient Pay. If a Participant’s Base Earnings are insufficient
in any payroll period to allow the entire payroll deduction contemplated under the
Plan, no deduction will be made for such payroll period. Payroll deductions will
resume with the next payroll period in which the Participant has Base Earnings
sufficient to allow for the deductions. Payroll deductions under the Plan shall be
made in any payroll period only after other withholdings, deductions, garnishments and
the like have been made, and only if the remaining Base Earnings are sufficient to
allow the entire payroll deduction contemplated.
	 
	 	(c)	 	Changes to Deductions. Subject to any minimum and maximum deductions
established by the Committee and the terms and conditions of the Plan, a Participant
may change the amount of his payroll deduction for any payroll period occurring within
an Offering Period (but not retroactively and not more than twice during any Offering
Period) by filing a new Election Form with Broadwing or its designated recordkeeper in
accordance with uniform and nondiscriminatory rules

 

 

	 	 	 	established by the Committee. Any change to payroll deductions for an Offering
Period shall be implemented as soon as administratively feasible.
	 
	 	(d)	 	Plan Accounts. The Committee shall cause a separate bookkeeping
account (a “Plan Account”) to be maintained for each Participant, which Plan Account
will reflect the accumulated payroll deductions made on behalf of the Participant from
time to time, reduced for any distributions from such Plan Account pursuant to the
provisions of the Plan.
	 
	 	(e)	 	Base Earnings. For purposes of the Plan, the term “Base Earnings” for
any period shall have the usual meaning given to that term by Broadwing from time to
time which are payable to a Participant for that period.

     7. Termination of Participation.

	 	(a)	 	Voluntary Termination. A Participant, at any time and for any reason,
may voluntarily terminate participation in the Plan by written notification of
withdrawal delivered to the appropriate payroll office at least 10 business days (or
such other period provided by the Committee) before the next payroll period.
	 
	 	(b)	 	Automatic Termination. Except as provided in paragraphs (c) or (d), a
Participant’s participation in the Plan shall be automatically terminated immediately
upon termination of his employment with Broadwing and the Participating Subsidiaries
for any reason.
	 
	 	(c)	 	Special Rule for Death. Notwithstanding the provisions of paragraph
(b), if a Participant’s termination of employment with Broadwing and the Participating
Subsidiaries occurs on account of death, the Participant’s beneficiary may elect to
continue to participate in the Plan (but only to the extent of the Participant’s Plan
Account balance as of the date of his death) through the Exercise Date coincident with
or next following the Participant’s death, at which time the Participant’s
participation in the Plan shall automatically terminate. Any election pursuant to the
preceding sentence must be made within 30 days after the Participant’s death; provided,
however, that if the Participant’s death occurs less than 30 days prior to the next
Exercise Date, the beneficiary’s election must be made no later than the Exercise Date
coincident with or next following the Participant’s death. If the beneficiary does not
elect to continue participation in the Plan pursuant to the foregoing provisions of
this paragraph (c), the Participant’s participation in the Plan will be deemed to have
terminated as of the date of his death and any existing account balance will be
refunded to the beneficiary in cash without interest.
	 
	 	(d)	 	Special Rule for Retirement. Notwithstanding the provisions of
paragraph (b), if a Participant’s termination of employment with Broadwing and the
Participating Subsidiaries occurs on account of Retirement (as defined below) within
three months prior to an Exercise Date, the Participant may elect to continue to
participate in the Plan (but only to the extent of his Plan Account balance as of the

 

 

	 	 	 	date of his Retirement) through the Exercise Date coincident with or next following
his Retirement, at which time the Participant’s participation in the Plan shall
automatically terminate. For purposes of the Plan, the term “Retirement” means the
Participant’s termination of employment with Broadwing and the Participating
Subsidiaries on or after the Participant attains age 65. A Participant will be
deemed to have elected to continue participation in accordance with this paragraph
(d) if, as of the Exercise Date coincident with or next following his Retirement, he
has not given notice of his cessation of Plan participation in accordance with the
terms of the Plan.
	 
	 	(e)	 	Effect of Termination. In the event a Participant’s participation in
the Plan is terminated for any reason, payroll deductions shall immediately cease and
any amounts then credited to the Participant’s Plan Account shall be returned to the
Participant, without interest, as soon as practicable thereafter. A Participant whose
participation in the Plan has terminated may not rejoin the Plan until the next
Offering Period following the date of such termination, subject to the terms and
conditions of the Plan.

5. Exercise of Option/Purchase of Shares.

	 	(a)	 	Exercise of Option. On each June 30 and December 31 (or, if such day
is not a business day, the next preceding business day) (each an “Exercise Date”), each
Participant who is then employed by Broadwing or a Participating Subsidiary (or who is
otherwise eligible to exercise an Option pursuant to paragraph 7(c)) shall be deemed to
have exercised his Option with respect to that number of shares of Stock equal to the
quotient of (i) the balance in the Participant’s Plan Account as of the Exercise Date
and (ii) the Exercise Price. For purposes of the Plan, the “Exercise Price” shall be
the lesser of (1) 85% of the Fair Market Value of a share of Stock on the Grant Date,
or (2) 85% of the Fair Market Value of a share of Stock on the Exercise Date, rounded
up to the nearest 1/8 point, but in no event less than the par value of a share of
Stock. In the event of overlapping or concurrent Offering Periods, Options shall be
exercised in the order granted.
	 
	 	(b)	 	Statements. As soon as practicable after each Exercise Date, a
statement shall be delivered to each Participant which shall include
the number of shares of Stock purchased on the Exercise Date on behalf of such Participant under the
Plan.
	 
	 	(c)	 	Certificates. When requested by a Participant, a stock certificate for
whole shares of Stock purchased by the Participant under the Plan shall be issued in
the name of the Participant or, if so specified in the Participant’s Election Form, in
the Participant’s name and the name of another person as joint tenants with right of
survivorship or as tenants in common. The value of any fractional shares shall be paid
to the Participant in cash.
	 
	 	(d)	 	Excess Plan Account Balances. Any amounts remaining in a Participant’s
Plan Account as of any Exercise Date after the purchase of shares described herein
shall remain in the Participant’s Plan Account and shall be used as of the next

 

 

	 	 	 	Exercise Date to purchase shares of Stock in accordance with the terms of the Plan;
provided, however, that nothing in this paragraph (d) shall affect a Participant’s
right to cease participation in the Plan in accordance with the terms hereof.

     9. Miscellaneous.

	 	(a)	 	Compliance with Applicable Laws; Limits on Issuance. Notwithstanding
any other provision of the Plan, Broadwing shall have no obligation to issue any shares
of Stock under the Plan unless such issuance would comply with all applicable laws and
the applicable regulations or requirements of any securities exchange or similar
entity. Prior to the issuance of any shares of Stock under the Plan, Broadwing may
require a written statement that the recipient is acquiring the shares for investment
and not for the purpose or with the intention of distributing the shares and will not
dispose of them in violation of the registration requirements of the Securities Act of
1933.
	 
	 	(b)	 	Transferability. Neither the right of a Participant to purchase shares
of Stock hereunder, nor his Plan Account balance, may be transferred, pledged or
assigned by the Participant other than by will or the laws of descent and distribution
and his rights hereunder may be exercised during his lifetime only by him.
	 
	 	(c)	 	Notices. Any notice or document required to be filed with the
Committee under or with respect to the Plan will be properly filed if delivered or
mailed by registered mail, postage prepaid, to the Committee at Broadwing’s principal
executive offices. The Committee may, by advance written notice to affected persons,
revise any notice procedure from time to time. Any notice required under the Plan may
be waived by the person entitled to notice.
	 
	 	(d)	 	Withholding. All amounts withheld pursuant to the Plan, shares of
Stock issued hereunder and any payments pursuant to the Plan are subject to withholding
of all applicable taxes and Broadwing and its subsidiaries shall have the right to
withhold from any payment or distribution of shares or to collect as a condition of any
payment or distribution under the Plan, as applicable, any taxes required by law to be
withheld. To the extent provided by the Committee, a Participant may elect to have any
distribution of shares otherwise required to be made pursuant to the Plan to be
withheld or to surrender to Broadwing or its subsidiaries shares of Stock already owned
by the Participant to fulfill any tax withholding obligation; provided, however, in no
event shall the fair market value of the number of shares so withheld (or accepted)
exceed the amount necessary to meet the minimum Federal, state and local marginal tax
rates then in effect that are applicable to the Participant and to the particular
transaction.
	 
	 	(e)	 	Limitation of Implied Rights. The Plan does not constitute a contract
of employment or continued service and participation in the Plan will not give any
employee the right to be retained in the employ of Broadwing or any Participating
Subsidiary or any right or claim to any benefit under the Plan unless such right or

 

 

	 	 	 	claim has specifically accrued under the terms of the Plan. Participation in the
Plan by a Participant shall not create any rights in such Participant as a
stockholder of Broadwing until shares of Stock are registered in the name of the
Participant.
	 
	 	(f)	 	Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on it
considers pertinent and reliable, and signed, made or presented by the proper party or
parties.
	 
	 	(g)	 	Gender and Number. Where the context admits, words in one gender shall
include the other gender, words in the singular shall include the plural and the plural
shall include the singular.
	 
	 	(h)	 	Definition of Fair Market Value. For purposes of the Plan, the “Fair
Market Value” of a share of Stock as of any date shall be the closing market composite
price for such Stock as reported on the Nasdaq National Market on that date or, if
Stock is not traded on that date, on the immediately preceding date on which Stock was
traded. In the event that the Stock is not listed for trading on a national exchange
or quoted on an inter-dealer quotation system, the Fair Market Value shall be
determined by the Committee. Notwithstanding the foregoing, the “Fair Market Value” of
a share of Stock for the Grant Date occurring on the Effective Date shall be the per
share “Price to Public” shown on the cover page of the final Prospectus filed in
connection with Broadwing’s initial public offering.

            6. Amendment or Termination of Plan. The Board may, at any time and in any manner,
amend, suspend or terminate the Plan or any election outstanding under the Plan; provided, however,
that no such amendment shall be made without approval of Broadwing’s stockholders to the extent
such approval would be required under section 423 of the Code, the rules of any securities exchange
or similar entity on which the Stock is listed or otherwise by applicable law.

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