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BROADWING INC.
PENSION PROGRAM
(AS AMENDED AND RESTATED EFFECTIVE JULY 24, 2000)
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BROADWING INC.
PENSION PROGRAM
TABLE OF CONTENTS
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Statement of Purpose........................................................1
Definitions; Gender and Number..............................................1
Administration..............................................................2
Benefits....................................................................3
Death Benefits..............................................................5
General Provisions..........................................................5
Plan Modification...........................................................9
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BROADWING INC.
PENSION PROGRAM
(AS AMENDED AND RESTATED EFFECTIVE JULY 24, 2000)
1. Statement of Purpose.
The purpose of the Broadwing Inc. Pension Program is to provide
supplementary pension benefits and death benefits for Senior Managers of
Broadwing Inc. and its subsidiaries. The Plan is intended to amend and supersede
the plan that was named the Cincinnati Bell Inc. Pension Program and all
predecessor versions of such plan (the "Prior Plan") effective as of July 24,
2000. For all purposes hereof, any reference to the Plan contained herein refers
to the Plan both as amended and restated by this document and to the Prior Plan
as it was in effect prior to July 24, 2000.
2. Definitions; Gender and Number.
2.1 For purposes of the Plan, the following terms shall have the
meanings hereinafter set forth unless the context otherwise requires:
2.1.1 "Board of Directors" means the Board of Directors of the
Company.
2.1.2 "Class 1 Senior Manager" means a Senior Manager who was
first designated as a Senior Manager eligible to participate in the Plan prior
to March 3, 1997 and who is an active Employee of a Participating Company on
March 3, 1997.
2.1.3 "Class 2 Senior Manager" means a Senior Manager who was
first designated as a Senior Manager eligible to participate in the Plan on or
after March 3, 1997.
2.1.4 "Committee" means the Compensation Committee of the
Board of Directors.
2.1.5 "Company" means Broadwing Inc. (or, for any period prior
to April 20, 2000, Cincinnati Bell Inc.).
2.1.6 "Designated Beneficiary" mean the person or entity
designated by a Senior Manager, on forms furnished and in the manner prescribed
by the Committee, to receive any benefit payable under the Plan after the Senior
Manager's death. If a Senior Manager fails to designate a beneficiary or if, for
any reason, such designation is not effective, his "Designated Beneficiary"
shall be his surviving spouse, or, if none, his estate.
2.1.7 "Employee" means any person who is employed as a common
law employee of a Participating Company.
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2.1.8 "Participating Company" means the Company and each
direct and indirect subsidiary of the Company.
2.1.9 "Pension Plan" means the Broadwing Pension Plan (which
prior to January 1, 2000 was named the Cincinnati Bell Management Pension Plan).
2.1.10 "Plan" means this Broadwing Inc. Pension Program.
2.1.11 "Senior Manager" means an Employee whose participation
in the Plan has been approved by the Board of Directors or the Committee.
2.1.12 "Years of Service" means a Senior Manager's full years
of service as an Employee, computed on the basis that 12 full months of service
(whether or not consecutive) constitutes one full year of service.
2.2 For purposes of the Plan, words used in any gender shall include
all other genders, words used in the singular form shall include the plural form
and words used in the plural form shall include the singular form.
3. Administration.
3.1 The Company shall be the Plan Administrator and the Sponsor of the
Plan as those terms are defined in the Employee Retirement Income Security Act
of 1974.
3.2 The Committee shall have the specific powers elsewhere herein
granted to it and shall have such other powers as may be necessary in order to
enable it to administer the Plan, except for powers herein granted or provided
to be granted to others.
3.2.1 The Committee may adopt such rules and regulations and
may employ such persons as it deems appropriate for the proper administration of
the Plan.
3.2.2 The Committee shall grant or deny claims for benefits
under the Plan, and authorize disbursements according to this Plan. Notice shall
be provided in writing to any participant or beneficiary whose claim has been
denied, setting forth the specific reasons for such denial. In the event that a
claim for benefits has been denied, the Committee shall afford the claimant a
full and fair review of the decision denying the claim.
3.2.3 The Committee shall determine conclusively for all
parties all questions arising in the administration of the Plan.
3.2.4 The expenses of the Committee in administering the Plan
shall be borne by the Participating Companies.
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3.2.5 The Board of Directors and the Committee may designate
in writing other persons to carry out their responsibilities under the Plan, and
may employ persons to advise them with regard to any such responsibilities.
4. Benefits
4.1 If a Class 1 Senior Manager ceases to be an Employee for any reason
(other than his death), he shall be entitled to receive the same monthly
benefit, and in the same form, which he would have been entitled to receive if
the provisions of the Plan in effect on March 2, 1997 continued in effect
unamended after that date.
4.2 If a Class 2 Senior Manager who has attained age 55 and completed
at least 10 Years of Service ceases to be an Employee for any reason (other than
his death), he shall be entitled to receive a monthly benefit, commencing on the
day next following the date he ceases to be an Employee and payable for his
life, equal to the result obtained (not less than zero) by subtracting (a) the
sum of his Pension Benefit and Social Security Benefit from (b) 50% of his
Average Monthly Compensation; provided, however, that if the number of the
Senior Manager's years of age and Years of Service total less than 75, the
amount of his monthly benefit shall be reduced by 2.5% for each year by which
the number of his years of age and Years of Service total less than 75.
4.2.1 For purposes of this Section 4.2, a Senior Manager's
"Average Monthly Compensation" shall be the average obtained by dividing (a) his
base salary and annual bonuses from the Participating Companies earned for the
36-month period during the 60-month period ending on the date he ceases to be an
Employee which produces the highest dollar result by (b) 36. Any annual bonus
shall be deemed to have been earned on the last day of the performance period to
which it relates. A Senior Manager's base salary and annual bonuses shall
include base salary and annual bonus amounts deferred by the Senior Manager
pursuant to any deferred compensation plan or agreement, 401(k) plan or
cafeteria plan, as well as base salary and bonus amounts paid in the form of
securities or other property which are not immediately taxable to the Senior
Manager.
4.2.2 For purposes of this Section 4.2, "Pension Benefit"
means the benefit (if any) which the Senior Manager is entitled to receive under
the Pension Plan, expressed as a monthly benefit commencing on the day following
the date on which he ceases to be an Employee and payable for his life. If a
Senior Manager has received or is entitled to receive a benefit from a
Participating Company which, in the opinion of the Committee, is intended to
supplement or be in lieu of a benefit under the Pension Plan, the value of such
other benefit shall be deemed to be a benefit under the Pension Plan.
4.2.3 For purposes of this Section 4.2, "Social Security
Benefit" means: (a) in the case of a Senior Manager who has attained his social
security retirement age on the date he ceases to be an Employee, the unreduced
primary monthly benefit to which he would be entitled on such date, on proper
application, under the Federal Social Security Act in effect on such date; and
(b) in the case of a Senior Manager who has not attained his social security
retirement age on
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the date he ceases to be an Employee, a monthly benefit commencing on the day
following the date he ceases to be an Employee and payable for his life which
is actuarially equivalent to the unreduced primary monthly benefit to which
he would be entitled upon attaining his social security retirement age, on
proper application, under the Federal Social Security Act as in effect on the
date he ceases to be an Employee, assuming that he did not receive any
compensation after ceasing to be an Employee. For purpose of this
Section 4.2.3, "social security retirement age" means the age used as the
Senior Manager's retirement age under section 216(1) of the Federal Social
Security Act. For purposes of this Section 4.2.3, the Social Security Benefit
of a Senior Manager shall not be adjusted to reflect reductions because the
Senior Manager disqualified himself by earnings or otherwise to receive the
full amount of such benefit.
4.3 If a Senior Manager who has completed five or more Years of Service
dies while an active Employee, his Designated Beneficiary shall be entitled to
receive a benefit payable in fifteen annual installments, commencing as of the
day following the date of the Senior Manager's death, which shall be actuarially
equivalent (as determined by the Committee) to the monthly benefit which would
have been payable to the Senior Manager if he had retired on the day preceding
the date of his death.
4.4 The Committee, in its sole discretion, may elect to waive in whole
or in part any service or age reduction or discount, or any minimum age or
service requirement, otherwise applicable to the amount of a benefit payable to
a Senior Manager under the Plan, on such terms and conditions as the Committee
may prescribe.
4.5 In the case of a Senior Manager who retires prior to attaining age
62, the Committee may, in its sole discretion, elect to provide the Senior
Manager with a monthly Social Security supplement from the date of his
retirement through the date he attains age 62 (or, if earlier, to the date of
his death) in the amount of the Senior Manager's unreduced monthly primary
Social Security benefit at age 62. This Social Security supplement shall be in
addition to any other benefits provided under the Plan.
4.6 In lieu of a monthly benefit payable for the life of the Senior
Manager, with the consent of the Committee, and subject to such rules as the
Committee may prescribe, a Senior Manager may elect to have his benefit paid in
one of the following forms: (a) fifteen equal annual installments; or (b) an
annuity payable for the life of the Senior Manager and continuing to the Senior
Manager's contingent annuitant for his life at one-half of the rate payable
during their joint lives. Any optional form of benefit hereunder shall be
actuarially equivalent (as determined by the Committee) to the standard form of
benefit otherwise payable to the Senior Manager. If a Senior Manager whose
benefit is being paid in fifteen annual installments dies before receiving all
of the installments, the remaining installments shall be paid, when due, to his
Designated Beneficiary.
4.7 The last Participating Company to employ a Senior Manager prior to
his retirement or termination of employment shall be responsible for the full
benefit, if any, payable to the Senior Manager or his beneficiary under the
Plan.
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4.8 Except as otherwise provided in this Section 4 and Section 5, if a
Senior Manager ceases to be an Employee for any reason, neither he nor any
person claiming by or through him shall be entitled to receive any benefit under
the Plan.
5. Death Benefits.
All Senior Managers whose base salaries and annual bonuses are set by
the Board of Directors and who are participants in the Death Benefit Plan within
the Pension Plan shall be participants in the Pension Program Death Benefit
Plan. The Pension Program Death Benefit Plan provides for accident, sickness and
pensioner death benefits in addition to, and subject to the same terms and
conditions and administered in the same manner as, the Death Benefit Plan within
the Pension Plan, except that for an eligible Senior Manager who dies while an
active Employee or who retires on or after March 3, 1997, one year's wages shall
be the last annual bonus target set by the Board of Directors for the Senior
Manager.
6. General Provisions.
6.1 All benefits for which a Senior Manager would be otherwise eligible
hereunder may be forfeited, in the sole and absolute discretion of the
Committee, under the following circumstances;
(a) The Senior Manager is discharged by a Participating
Company for cause (as determined by the Board of Directors or the Committee in
its sole and absolute discretion); or
(b) Determination by the Board of Directors or the Committee,
in its sole and absolute discretion, that the Senior Manager engaged in
misconduct in connection with his employment with a Participating Company; or
(c) The Senior Manager, without the express written consent of
the Board of Directors or the Committee, at any time is employed by, becomes
associated with, renders service to, or owns an interest in any business that,
in the sole and absolute discretion of the Board of Directors or the Committee,
is competitive with any Participating Company or with any business in which a
Participating Company has a substantial interest (other than as a shareholder
with a nonsubstantial interest in such business).
6.2 Assignment or alienation of pensions or other benefits under this
Plan will not be permitted or recognized.
6.3 In all questions relating to age and service for eligibility for
any benefit hereunder, or relating to term of employment and rates of pay for
determining benefits, the decision of the Committee, based upon this Plan and
upon the records of the Participating Company last employing such individual and
insofar as permitted by applicable law, shall be final.
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6.4 All benefits payable pursuant to the Plan shall be paid from
participating Company operating expenses, or through the purchase of insurance
from an insurance company or otherwise, as the Board of Directors may determine.
If the Board of Directors elects to purchase insurance or other assets to
provide benefits under the Plan, no Senior Manager, beneficiary or annuitant
shall have any right or interest in such insurance or other assets.
6.5 Benefits payable to a former employee or retiree unable to execute
a proper receipt may be paid to other person(s) on behalf of such employee or
retiree.
6.6 Should a claim other than under the Plan be presented or suit
brought against any Participating Company for damages on account of death of a
Senior Manager, nothing shall be payable under the Plan on account of such death
except as provided in Section 6.8; provided, however, that the Committee may in
its discretion and upon such terms as it may prescribe, waive this provision if
such claims be withdrawn or if such suit be discontinued, and provided further
that this provision shall not preclude the payment of death benefits under
Section 4.3.
6.7 In case any judgment is recovered against any Participating Company
or any settlement is made of any claim or suit on account of the death of a
Senior Manager, and the amount paid to the beneficiaries who would have received
benefits under the Plan is less than what would otherwise have been payable
under the Plan, the difference between the two amounts may, in the discretion of
the Committee, be distributed to such beneficiaries.
6.8 In case any benefit, which the Committee shall determine to be of
the same general character as a payment provided by the Plan, shall be payable
under any law now in force or hereafter enacted to any Senior Manager, to his
beneficiaries or his annuitant under such law, the excess only, if any, of the
amount prescribed in the Plan above the amount of such payment prescribed by law
shall be payable under the Plan; provided, however, that no benefit payable
under this Plan shall be reduced by reason of any government benefit or pension
payable on account of military service or any reason of any benefit which the
recipient would be entitled to receive under the Social Security Act or Railroad
Retirement Act. In those cases where, because of differences in the
beneficiaries, or differences in the time or methods of payment, or otherwise
whether or not there is such excess is not ascertainable by mere comparison but
adjustments are necessary, the Committee has discretion to determine whether or
not in fact any such excess exists and to make the adjustments necessary to
carry out in a fair and equitable manner the spirit of the provision for the
payment of such excess.
6.9 A Senior Manager who retired prior to March 3, 1997 shall continue
to receive the same benefits and in the same form and amount, which he was
entitled to receive under the provisions of the Plan in effect on March 2, 1997.
6.10 In the event of a Change in Control, the provisions of this
Section 6.10 will supersede any conflicting provisions of the Plan.
6.10.1 In the event of a Change in Control, the full present
value of all accrued benefits under the Plan, as determined in accordance with
the provisions of the Plan and any trust
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between the Company and a trustee that is intended to apply to the Plan (the
Trust), shall be fully funded to the Trust in cash or other property
acceptable to the trustee, within five business days of such Change in
Control. The determination of the full present value of the accrued benefits
under the Plan and the excess portion of the Pension Plan shall be made using
the following assumptions: (i) the date of retirement for each Senior Manager
shall be considered to be the later of the date on which such Senior Manager
shall have attained age 55 and have completed at least 10 Years of Service or
the date of the Change in Control, (ii) each Senior Manager who is married on
the date of the Change in Control shall be assumed to select the joint and
survivor benefit and (iii) the interest and mortality assumptions shall be
the same as those used for funding the Pension Plan for the plan year in
which the Change in Control occurs or, if such assumptions are not yet
established, the assumptions used in the immediately preceding year. In
addition, the following assumptions also apply to the determination of
accrued benefits under the Plan: (i) for the purpose of the benefit formula
under Section 4 of this Plan (or any equivalent successor provisions such
Plan or any successor Plan) each pension eligible Senior Manager will be
considered to have a term of employment equal to 30 years and an age at
retirement equal to 60 years, and (ii) no Social Security Supplements shall
be granted.
6.10.2 In the event that the Plan is terminated or partially
terminated on or after a Change in Control and prior to the second anniversary
of such Change in Control as defined hereinafter, each Senior Manager affected
by such termination or partial determination may elect, within 90 days of the
proposed distribution date (as defined below), to receive the full present value
of the benefit accrued under this Plan and the benefit, referred to in Section
6.10.3, accrued under the Pension Plan to the date of the termination in a
single lump sum payment. If the Senior Manager so elects in accordance with this
Section 6.10.2 to receive a lump sum, such lump sum shall be distributed to the
Senior Manager or, in the event of the Senior Manager's death, the Senior
Manager's Designated Beneficiary in the amount which equals the present value of
the benefit or benefits projected to be paid under the Plan to the Senior
Manager, actuarially determined using the assumptions used by the Plan's actuary
for funding the Plan; provided, however, that such amount shall be further
reduced by an amount equal to 10% prior to distribution of such lump sum. The
proposed distribution date of the lump sum distribution shall be no later than
one year following the date of the termination or partial termination of the
Plan. Once such amount is paid, the obligation of the Plan to such Senior
Manager and/or his Designated Beneficiary shall be considered to be fully and
irrevocably satisfied. No Senior Manager shall have any right under this Section
6.10.2 prior to the occurrence of a Change in Control.
6.10.3 The amount accrued under the Pension Plan and payable
as a part of the actuarially determined lump sum distribution in accordance with
Section 6.10.2 shall equal the portion of the pension, determined as of the
proposed distribution date, that is in excess of the permissible amount which
may be distributed from the Pension Plan in accordance with Sections 401(a)(17)
and 415 of the Internal Revenue Code and with respect to which payments are to
be made in accordance with the Pension Plan. Notwithstanding any other
provisions, a management employee of any company participating in the Pension
Plan whose pension under the Pension Plan is in excess of the limits of Sections
401(a)(17) and 415 of the Internal Revenue
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Code and for whom such excess is to be paid in accordance with the provisions
of the Pension Plan, shall be considered a participant in this Plan for
purposes of this Section 6.10.3.
6.10.4 For the purposes of this Section 6.10, a "Change in
Control" means the occurrence of any one of the following events:
(i) a majority of the Board of Directors as of any
date is not composed of Incumbent Directors. For purposes hereof, as of any
date, the term "Incumbent Director" means any individual who is a director of
the Company as of such date and either (a) who was a director of the Company at
the beginning of the 24 consecutive month period ending on such date or (b) who
became a 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 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 the Company 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 the Company 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 of Directors shall ever be deemed to be an
Incumbent Director;
(ii) any "person" (as such term is defined in Section
3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange Act") and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities eligible to
vote for the election of the Board of Directors (the "Company Voting
Securities"); PROVIDED, HOWEVER, that the event described in this paragraph (ii)
shall not be deemed to be a Change in Control if such event results from any of
the following: (a) the acquisition of any Company Voting Securities by the
Company or any of its subsidiaries, (b) the acquisition of any Company Voting
Securities by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, (c) the acquisition of any
Company Voting Securities by any underwriter temporarily holding securities
pursuant to an offering of such securities or (d) a Non-Qualifying Transaction
(as defined in paragraph (iii));
(iii) the consummation of a merger, consolidation,
statutory share exchange or similar form of corporate transaction involving the
Company or any of its subsidiaries (a "Reorganization") or sale or other
disposition of all or substantially all of the assets of the Company to an
entity that is not an affiliate of the Company (a "Sale"), that in each case
requires the approval of the Company's shareholders under the law of the
Company's jurisdiction of organization, whether for such Reorganization or Sale
(or the issuance of securities of the Company in such Reorganization or Sale),
unless immediately following such Reorganization or Sale: (a) more than 60% of
the total voting power (in respect of the election of directors, or similar
officials in the case of an entity other than a corporation) of (x) the entity
resulting from such Reorganization or the entity which has acquired all or
substantially all of the assets of the Company (in either case, the "Surviving
Entity"), or (y) if applicable, the ultimate parent entity
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that directly or indirectly has beneficial ownership of more than 50% of the
total voting power (in respect of the election of directors, or similar
officials in the case of an entity other than a corporation) of the Surviving
Entity (the "Parent Entity"), is represented by Company Voting Securities
that were outstanding immediately prior to such Reorganization or Sale (or,
if applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Reorganization or Sale), and such
voting power among the holders thereof is in substantially the same
proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Reorganization or Sale, (b) no
person (other than any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Entity or the Parent Entity) is or becomes the
beneficial owner, directly or indirectly, of 20% or more of the total voting
power (in respect of the election of directors (or similar officials in the
case of an entity other than a corporation) of the outstanding voting
securities of the Parent Entity (or, if there is no Parent Entity, the
Surviving Entity) and (c) at least a majority of the members of the board of
directors (or similar officials in the case of an entity other than a
corporation) of the Parent Entity (or, if there is no Parent Entity, the
Surviving Entity) following the consummation of the Reorganization or Sale
were, at the time the approval by the Board of Directors of the execution of
the initial agreement providing for such Reorganization or Sale, Incumbent
Directors (any Reorganization or Sale which satisfies all of the criteria
specified in (a), (b), and (c) of this paragraph (iii) being deemed to be a
"Non-Qualifying Transaction"); or
(iv) the shareholders of the Company approve a plan
of complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any person acquires beneficial ownership of more than
20% of the Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which reduces the number of Company Voting
Securities outstanding; PROVIDED THAT, if after such acquisition by the Company
such person becomes the beneficial owner of additional Company Voting Securities
that increases the percentage of outstanding Company Voting Securities
beneficially owned by such person, a Change in Control shall then occur.
6.10.5 In the event of a Change in Control, the provisions of
Section 6.10 may not be deleted or amended on or subsequent to the Change in
Control in any manner whatsoever which would be adverse to one or more Senior
Managers without the consent of each such Senior Manager who would be so
affected; provided, however, the Board of Directors may make minor or
administrative changes to this Section 6.10 or changes to conform to applicable
legal requirements. This Section 6.10.5 shall not limit the Board of Directors
from making any amendment to or deleting all or any portion of Section 6.10
prior to a Change in Control.
7. Plan Modification.
The Board of Directors retains the right to amend or terminate the Plan
in whole or in part at any time, for any reason, with or without notice. Subject
to the provisions of Section 6.10, said amendment or termination may result, at
the discretion of the Board of Directors, in the cancellation of any
entitlements or future entitlements to active Senior Managers; provided,
however, that the
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amendment, termination or partial termination of the Plan shall not reduce
the accrued benefit of any Vested Senior Manager, retired Senior Manager or
his beneficiary. For purposes of the Plan, a "Vested Senior Manager" means a
Class 1 Senior Manager who has attained age 60 or who is Chairman, President
or Chief Executive Officer of the Company.
IN ORDER TO EFFECT THE PROVISIONS OF THIS PLAN DOCUMENT, Broadwing
Inc., the sponsor of the Plan, has caused its name to be subscribed to this Plan
document this 9th day of August, 2000, to be effective as of July 24, 2000.
BROADWING INC.
By:
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Richard G. Ellenberger
President and Chief Executive Officer
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