We mitigate potential risks associated with compensation through the use of caps on potential incentive payments, stock ownership guidelines, and multiple performance metrics.
We offer no employment agreements with executives.
We offer severance agreements with executives which, in the case of a change in control, require both a qualified change in control and termination of the executive for severance and other benefits to be paid.
The Committee has approved a policy not to enter into any agreement providing for an Excise Tax Payment (defined below), and Excise Tax Payment provisions were removed from all existing severance agreements in 2014.
We offer no perquisites or health and welfare benefits to executives other than those that are offered to all of our employees.
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• | We target total direct compensation levels for executives at approximately the 50th percentile of market.
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Our insider trading policy includes anti-hedging provisions.
At the 20152021 Annual Meeting, we submitted our executive compensation program to an advisory stockholder vote. The stockholders overwhelmingly approved our executive compensation program, with 99.07%approximately 97% of votes cast in favor of the proposal (based upon the voting power represented by shares of Common Stock present or represented by proxy at the 20152021 Annual Meeting). The Committee has interpreted this vote to mean that our stockholders are supportive of our overall executive compensation philosophy and program and thus did not enact any significant changes to the 2016 executive compensation program in response to this vote.program.
In January 2016, the Board approved the CEO Succession Plan pursuant to which, effective June 1, 2016, Mr. Moreland will assume the office of Executive Vice Chairman (an executive officer position), and Mr. Brown will succeed Mr. Moreland as our President and Chief Executive Officer. In addition, in March 2016, we announced that Mr. Daniel K. Schlanger would join us in April 2016 and assume the office of SVP and CFO effective June 1, 2016.
Executive Compensation Program Overview
Our executive compensation program is established as a component of our total rewards program. Our total rewards program includes:
Compensation:
base salary
short-term incentives
long-term incentives
Health and welfare benefits:
401(k) plan
medical, dental and vision benefits
life insurance benefits
vacation
Learning and development:
training
succession planning
performance management
career | | | | | | | | |
Compensation | Health and Welfare Benefits | Learning and Development |
Base salary | 401(k) Plan | Training |
Short-term incentives | Medical, dental and vision benefits | Performance management |
Long-term incentives | Life insurance benefits | Career development |
| Paid time off | |
Our executive total rewards strategy is to provide a competitive mix of total rewards that enables us to effectively recruit, motivate and retain high-performing executives. With respect to the portion of total rewards for our executives that takes the form of compensation, it is our belief that a majority of such compensation should be variable, at risk"at risk" and paid based on our financial and operating results and Relative TSR, in order to align our executives’executives' interests with those of our stockholders.
The Committee is primarily responsible for evaluating and determining the compensation levels of our seniorexecutive officers (namely, our CEO and the executive officers who report directly to our CEO) and administers our equity-
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basedequity-based incentive plan and other compensatorycompensation plans. The Board further reviews the actions of the Committee relating to the compensation of the CEO and certain seniorexecutive officers (matters involving CEO compensation are subject to approval of the independent directors of the Board). Where this CD&A contains language indicating that the Committee has approved or taken action with respect to a matter, such language is also intended to indicate that the Board (or the independent directors, as applicable) has approved or taken any action required with respect to such matter.
In performing its duties, the Committee obtains input as it deems appropriate, from the Compensation Consultant, Meridian Compensation Partners, which is engaged directly by the Committee (while the Compensation Consultant is engaged by the Committee, it works with management, including members of our human resources department and our CEO, in conducting compensation studies as directed by the Committee). In addition, in the case of compensation decisions relating to executives other than the CEO, the Committee seeks and obtains input from the CEO. The Committee regularly holds executive sessions at its meetings during which management, including the CEO, is not in attendance. Management, including members of our human resources department and our CEO, assists with the coordination, preparation and review of Committee meeting materials.
Executive Compensation Program Objectives
General
The principal objectives of our executive compensation program are to:
•provide a fair and competitive mix of compensation opportunities to attract, motivate and retain qualified, skilled and high-performing executives necessary for our long-term success;
•reward our executives by utilizing a pay-for-performance"pay-for-performance" approach to compensation, the goal of which is to create meaningful links between financial and operating performance, individual performance and the level of the executive’sexecutive's compensation;
•motivate executives to make sound business decisions that improve stockholder value and reward such decisions;
•balance the components of compensation so that the accomplishment of short-term and long-term operating and strategic objectives is encouraged and recognized;
•encourage achievement of objectives by our executives within a team environment; and
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•foster an equity ownership culture that aligns our executives’executives' long-term interests with those of our stockholders.
The Committee has established a number of processes to assist it in ensuring that our executive compensation program is achieving these objectives as detailed below.
Competitive Market Analysis
The Committee determines the levels for base salary, short-term incentives and long-term incentives by engaging, on an annual basis, in a competitive market analysis with respect to each of these compensation elements for each executive position (“("Competitive Market Analysis”Analysis"). The Committee usually begins this Competitive Market Analysis in the third quarter of the year prior to the year in which compensation decisions are made with respect to most matters, which decisions are typically made at the first regularly scheduled Committee meeting of each year (usually held in February) (“("First Regular Committee Meeting”Meeting"). Market data used in the Committee’sCommittee's Competitive Market Analysis includes the following:peer group data and published and custom survey data.
•Peer Group Data. Each year the Committee considers public companies in the wirelesscommunications infrastructure, telecommunications and REIT industries of comparable size in terms of revenue, market capitalization and assets to comprise a peer group (“("Peer Group”Group") for which compensation data is obtained and reviewed by the Committee. The Peer Group companies used in the Competitive Market Analysis for gauging the elements of executives’ 2015executives' 2021 compensation were:
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• American Tower Corporation
| • NetApp, Inc.
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• Boston Properties, Inc.
| • Prologis, Inc.
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• Equinix, Inc.
| • SBA Communications Corporation
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• F5 Networks, Inc.
| • Simon Property Group, Inc.
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• Frontier Communications Corporation
| • United States Cellular Corporation
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• General Growth Properties, Inc.
| • Ventas, Inc.
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• HCP, Inc.
| • Vornado Realty Trust
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• Juniper Networks, Inc.
| • Welltower, Inc. (formerly Health Care REIT, Inc.)
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• Lamar Advertising Company
| • Windstream Holdings, Inc.
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General Industry Market•Published and Custom Survey Data. General industryFor certain executive positions, the Committee analyzes market data (sized appropriately using regression analysis) from a third-partyreported in proprietary compensation survey (Towers Watson), as analyzedsurveys published by the Compensation Consultant, is reviewed by the Committee.third parties. This market dataanalysis provides information regarding elements and levels of executive compensation relating to general industryfor positions for which publicly disclosed data are not widely available. Survey participants include companies that have participated in the surveys.S&P 500 Index, as well as companies in industries that are similar to ours. The Committee utilizesreviews and may utilize this data since we do not recruit executives exclusively from the communications infrastructure, telecommunications and REIT industries (e.g., a financial executive with cross-industry skills may be recruited from another industry).industries.
In addition to the foregoing data, the Compensation Consultant may analyze and provide additional market data regarding best practices and compensation plan design from the Peer Group and other sources as requested by the Committee. The market data described above is used by the Committee in the Competitive Market Analysis to make decisions regarding executive compensation. No single group, survey or set of market data is used by the Committee as the sole gauge for determining executive compensation; rather, the information is used collectively, and no formulaic quantitative methodology is used by the Committee when using such data to determine executive compensation.
Assessment of Individual and Company Performance
In addition to market data, the Committee considers other factors in connection with its evaluation and determination of the components of compensation. These other factors may include our financial and operating performance, the applicable executive’sexecutive's individual performance, the executive’sexecutive's level of experience, the size of year-over-year changes in compensation and the duties and level of a particular executive position. These measures are discussed in more detail below.
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Total Compensation Review
Through the Competitive Market Analysis and in its deliberations regarding executive compensation decisions, the Committee reviews and compares the individual components of compensation and the total compensation for each NEO against the market data. In addition, the Committee reviews year-over-year changes in compensation for each NEO against the market data. These analyses are an important aspect of the Committee’sCommittee's regular executive compensation decision-making process.
Elements of Executive Compensation and Benefits
General
The principal elements of compensation and benefits provided to our executives, each of which is discussed in more detail below, include the following:
•base salary;
•short-term incentive compensation;
•long-term incentive compensation; and
•other benefits, including retirement benefits, and health and welfare benefits;benefits and
severance benefits.
The distribution of compensation among its various components is driven by our belief that the majority of executive compensation should be paid in the form of performance-based, variable compensation, with a greater emphasis on "at risk" pay for senior executives who have greater responsibility for the business. The practice of emphasizing variable compensation suits our objectives of linking pay to performance and aligning executives’
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executives' interests with those of our stockholders.
The following chart shows the approximate allocation of actual base salary, Annual Incentives and RSUs for 20152021 (as shown in “—"—Summary Compensation Table”Table" in this “VII."VIII. Executive Compensation”Compensation") among fixed, short-term variable and long-term variable compensation for our NEOs:
20152021 NEO Actual Total Direct Compensation Allocation
The distribution of compensation among the fixed element of base salary (paid in cash) and the variable elements of Annual Incentives (paid in cash) and RSUs (settled in shares of Common Stock) is primarily influenced by (1) our objective to utilize a pay-for-performance"pay-for-performance" approach to compensation, which places a majority of each executive’sexecutive's variable compensation at risk"at risk" based on the achievement of multiple performance objectives, (2) the Competitive Market Analysis and (3) the Committee’sCommittee's desire to balance short-term and long-term goals.
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As noted above, in lieu of targeting each element of compensation to a specific compensation element at a specified percentile oflevel compared to market, the Committee seeks to target total direct compensation (i.e., the sum of base salary, target level of Annual Incentive and target level of Annual RSUs (defined below)) for our executives at approximately the 50th percentile of market, while continuing to provide our executives with the opportunity to earn actual total direct compensation above the 50th percentile should our performance exceed predetermined criteria and below the 50th percentile should our performance fall short of such criteria. The Committee believes that targeting these levels of compensation helps us achievealigns with our overall total rewards strategy, andwhich in turn helps us achieve our executive compensation objectives and supports our long-term success.
Base Salary
Base salary is one of the main components of cash compensation for our executives. We choose to provide base salary compensationexecutives because it fits into our overall compensation objectives by providing a foundation for attracting and retaining executives and establishing a minimum level of compensation upon which our executives may rely. In addition to providing a base salary that is competitive with the market, we target base salary
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compensation to reflect the scope and level of responsibility for the applicable executive position. As described above, each year we conduct a Competitive Market Analysis for each executive position, based on the unique responsibilities of each position.
The Committee bases its decisions regarding annual base salary adjustments on multiple factors, including the following:
thelevel of responsibility and performance of the executive, includingconsidering such executive’sexecutive's contribution, accountability and experience;
experience, as well as the executive’s existingexecutive's base salary as compared to the Competitive Market Analysis; and
the annual cost of labor adjustment as provided in various proprietary surveys.
Analysis. The Committee reviews proposalsrecommendations made by the CEO with regard to base salary adjustments for executives other than himself and then either approves or revises these base salary adjustments.such recommendations. The Committee independently reviews the performance of the CEO when determining and determines and approves an appropriateapproving the base salary adjustment for the CEO. For 2015, Mr. Moreland received a 3.0% annual increase
At the First Regular Committee Meeting of 2021, the Committee approved the following adjustments (where applicable) to base salary, while Messrs. Brown, Young, Hawk and Slowey received annual increases tosalaries of the NEOs:
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| Base Salary |
Name | Title | 2021 | 2020 |
Jay A. Brown | President & CEO | $1,030,000 | $1,030,000 |
Daniel K. Schlanger | EVP & CFO | $610,000 | $610,000 |
Michael J. Kavanagh | EVP & CCO | $555,000 | $485,000 |
Kenneth J. Simon | EVP & General Counsel | $591,000 | $591,000 |
Christopher D. Levendos | EVP & COO—Fiber | $495,000 | $450,883 |
Robert C. Ackerman | Former EVP & COO—Towers | $510,000 | $510,000 |
The base salary of 6.0%, 6.1%, 6.3%adjustments for Mr. Kavanagh and 6.5%, respectively,Mr. Levendos (following his promotion to EVP & COO—Fiber) were made to better align their base salary compensation with thatthose of similarly situated executives at the Peer Group companies, as reviewed by the Committee in the Competitive Market Analysis.
Short-Term Incentives
The short-term incentive component of compensation represents a significant portion of the overall cash compensation opportunity for our executives. Short-term incentives are a variable element of compensation that are generally linked to the achievement of specific short-term financial operating and individual performance objectives.objectives each year.
Our short-term incentives are generally “at"at risk,”" meaning they are earned based upon meeting certain performance goals and increasemay be earned at above-target or decrease in valuebelow-target levels based on the degree of achievement of those goals. In order to accomplish its overall executive compensation objectives, the Committee has identified the following objectives for developing the overall framework of the short-term incentive program. The program should:
•be performance-based;
•promote a short-term perspective among executives to complement the long-term perspective promoted by the long-term incentive program, while avoiding excessive risk;
•be competitive with the market;
•motivate executives by providing the appropriate rewards for individual and corporate performance based on our goals and objectives;
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•reinforce the importance of company-wide teamwork; and
•link the financial measures with stockholder expectations; and
link the financial and non-financial measures with the individual performance of the executives.expectations.
Annual Incentive AwardsIncentives
To achieve the aboveprogram objectives, our short-term incentives for executives are generally comprised of performance-based Annual Incentives paid in accordance with an annually approved Executive Management Team Annual Incentive Plan (“AIP”).AIP. The AIP is a cash based,cash-based, short-term incentive award program that provides executives with the opportunity to earn an annual cash incentive if certainbased on the achievement of annual performance goals are achieved. Performancegoals. Such performance goals are pre-established based on the annual expectations for our business and are meant to be challenging, yet achievable. The Compensation Consultant has reviewed the performance goals and has noted that the performance goals represent meaningful targets that are challenging and indicative of value creation. The performance period covered by the AIP is from January 1 to December 31 (“AIP Year End”) of the applicable calendar year.
AIP AwardAnnual Incentive Opportunity. Under the AIP, each executive has minimum, threshold, target and maximum Annual Incentive award opportunities that are aligned with minimum, threshold, target and maximum performance outcomes. In the event of incremental outperformance over threshold or target, Annual Incentives that may be earned by the executive officers also increase incrementally. In the event actual performance is below the pre-established threshold level for any performance goal, no Annual Incentive is earned with respect to that specific performance goal.
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Each corporate and business unit operating executive (i.e., those with direct profit and loss or overall financial responsibilities) isFor 2021, each NEO was eligible to earn between 0% and 175% of such executive’sexecutive's target opportunity under the AIP. Each functional executive (i.e., those with indirect profit and loss responsibilities) is eligible to earn between 0% and 150% of such executive’s target opportunity. To mitigate excessive risk, Annual Incentive awardsIncentives are capped at the maximum payout opportunity even if actual performance exceeds the maximum performance goal. These payout ranges were determined by the Committee at the time the AIP was designed after consultation with, and a review of information provided by, the Compensation Consultant; this determination was based on relevant market data discussed above and was considered in the review of total compensation previously discussed.
The following table and graph illustrateillustrates the 20152021 Annual Incentive award opportunities and actual awards as a percentage of base salary for each of the NEOs.NEO:
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| | Percentage of Base Salary |
Name | Title | Minimum | | Threshold | | Target | | Maximum | | Actual |
W. Benjamin Moreland | President & CEO | 0.0% | | 75.0% | | 150.0% | | 262.50% | | 206.6% |
Jay A. Brown | SVP, CFO & Treasurer | 0.0% | | 50.0% | | 100.0% | | 175.00% | | 137.7% |
James D. Young | SVP, COO | 0.0% | | 50.0% | | 100.0% | | 175.00% | | 137.7% |
E. Blake Hawk | Former EVP & General Counsel | 0.0% | | 50.0% | | 100.0% | | 150.00% | | 129.3% |
Patrick Slowey | SVP & CCO | 0.0% | | 42.5% | | 85.0% | | 148.75% | | 131.4% |
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| | Percentage of Base Salary |
Name | Title | Minimum | | Threshold | | Target | | Maximum | | Actual |
Jay A. Brown | President & CEO | 0.0% | | 85.0% | | 170.0% | | 297.5% | | 288.0% |
Daniel K. Schlanger | EVP & CFO | 0.0% | | 50.0% | | 100.0% | | 175.0% | | 169.4% |
Michael J. Kavanagh | EVP & CCO | 0.0% | | 50.0% | | 100.0% | | 175.0% | | 169.4% |
Kenneth J. Simon | EVP & General Counsel | 0.0% | | 50.0% | | 100.0% | | 175.0% | | 169.4% |
Christopher D. Levendos | EVP & COO—Fiber | 0.0% | | 50.0% | | 100.0% | | 175.0% | | 169.4% |
Robert C. Ackerman | Former EVP & COO—Towers | 0.0% | | 50.0% | | 100.0% | | 175.0% | | 169.4% |
Annual Incentive Performance Goals. For 2015, as in other recent years, there were two categories of performance goalsShort-term incentives that could be earned under the AIP: (1) corporate/business unitAIP were formulaically linked to the following financial performance goals and (2) individual performance goals:metrics:
Corporate/Business Unit Performance Goals•. The 2015 corporate/business unit performance goals for our executive officers included the following:
Corporate Adjusted EBITDA
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Corporate• Adjusted Funds Fromfrom Operations (“AFFO”("AFFO") per Share
Business Unit Net New Sales
All of the performance goals were approved by the Committee at the First Regular Committee Meeting of 2015.2021. For each executive, multiple financial performance measures are used;2021, the weight assigned to each corporate/business unit performance goal is reflective of each executive's ability to influence achievement of such goal. For 2015, as in other recent years, the type and level at which corporate/business unitcorporate financial performance goals arewere established is primarilywas based on the Board approvedBoard-approved financial budget and the guidance provided to investors for the applicable calendar year, with “target”"target" goals representing the Board approvedBoard-approved budget amounts.
The following table lists the 2015 corporate/business unit performance goals used in connection with determining the NEOs’ 2015 Annual Incentive awards (with respect to the position held by the NEO during 2015).
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| | | | Actual Multiple of Target |
| | Annual Incentive Financial Performance Zone | | Operating Executive | | Functional Executive |
Corporate/Business Unit Performance Goals | | Threshold | | Target | | Maximum | | Actual | |
Corporate Adjusted EBITDA ($ millions) | | $ | 2,009.6 |
| (a) | $ | 2,071.7 |
| (a) | $ | 2,278.9 |
| (a) | $ | 2,161.9 |
| (b) | 1.33 | | 1.22 |
Corporate AFFO per Share | | $ | 3.981 |
| (a) | $ | 4.235 |
| (a) | $ | 5.082 |
| (a) | $ | 4.466 |
| (b) | 1.20 | | 1.14 |
Business Unit Net New Sales ($ millions) | | $ | (22.3 | ) | | $ | (20.3 | ) | | $ | (18.3 | ) | | $ | 5.9 |
| | 1.75 | | — |
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(a) | Adjusted, as approved by the Committee, to reflect the sale of our Australian subsidiary in 2015 (“Australia Sale”) on a discontinued operations basis. |
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(b) | Reflects the contribution of our Australian subsidiary for the portion of 2015 during which we owned such Australian subsidiary. |
Individual Performance Goals. Individual performance goals are generally based on the key individual goals approved by the Committee pursuant to our current annual performance management system (our system for documenting and measuring the individual performance of our employees on an annual basis). These goals may include additional financial, operating or qualitative measures for a specific executive and are generally based on the prospective business environment considerations for the upcoming year. The individual performance assessments are based on how well the executive meets the goals established. The following categories are used to assess individual performance:
Exceeds Expectations
Meets Plus Expectations
Meets Expectations
Meets Most Expectations
Does Not Meet Expectations
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The mix of corporate/business unitfollowing table presents the 2021 corporate financial performance goals and individual performance goal weightings foractual results considered by the Committee in connection with determining the NEOs' 2021 Annual Incentives. For each NEO, for 2015 werethe Annual Incentive is financially-driven, based on an objective formula that equally weighs the two performance metrics of Adjusted EBITDA and AFFO per Share, subject to the Committee's discretion to adjust the Annual Incentive levels as follows:provided in the AIP.
NEO Performance Goal Weightings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Annual Incentive Financial Performance Zone | | Actual Multiple of Target |
Performance Metrics | | Threshold | | Target | | Maximum | | Actual | |
Adjusted EBITDA ($ in millions)(a) | | $3,506.5 | | $3,606.5 | | $3,806.5 | | $3,815.6 | | 1.75 |
AFFO per Share(a) | | $6.54 | | $6.69 | | $6.99 | | $6.95 | | 1.64 |
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(a) | For Mr. Moreland, the 2015 individual performance goals include (1) ensure balance sheet flexibility is maintained, while optimizing financial outcome for stockholders; (2) maintain succession plans; (3) assess strategic opportunities and communicate and make recommendations to the Board as appropriate; (4) ensure that we remain properly positioned to integrate new assets; and (5) maintain corporate branding. The Committee approved an “Exceeds Expectations” performance rating with respect to Mr. Moreland’s 2015 individual performance goals. |
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(b) | For Mr. Brown, the 2015 individual performance goals include (1) ensure timely and accurate compliance with respect to SEC financial reporting and debt reporting requirements; (2) ensure appropriate long-term flexibility of the balance sheet is maintained while optimizing financial outcomes for stockholders; (3) provide internal financial acumen training and development and quarterly reviews of financial results; (4) maintain succession plans; (5) ensure effective management of investor relations; and (6) seek to maximize outcomes regarding discretionary capital allocations. Mr. Moreland proposed and the Committee approved an “Exceeds Expectations” performance rating with respect to Mr. Brown’s 2015 individual performance goals. |
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(c) | For Mr. Young, the 2015 individual performance goals include (1) meet or exceed 2015 business plan budget; (2) maintain systems and processes to timely meet customer demand; (3) lead effective cross-functional operational relationships to continue to drive automation, consistency and efficiencies; and (4) maintain succession plans. Mr. Moreland proposed and the Committee approved an “Exceeds Expectations” performance rating with respect to Mr. Young’s 2015 individual performance goals. |
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(d) | For Mr. Hawk, the 2015 individual performance goals include (1) continue to ensure timely and accurate compliance with respect to taxes, corporate maintenance and governance, litigation, securitization, employment and regulatory reporting requirements; (2) continue mitigating tax, legal and regulatory exposure through enhanced planning; (3) provide timely and accurate tax, legal and regulatory support to internal customers; (4) maintain legal team structure with respect to acquisition integration, distributed antenna systems ("DAS") and other services; and (5) maintain succession plans. Mr. Moreland proposed and the Committee approved an “Exceeds Expectations” performance rating with respect to Mr. Hawk’s 2015 individual performance goals. |
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(e) | For Mr. Slowey, the 2015 individual performance goals include (1) identify and maximize tower leasing opportunities; (2) enhance internal relationships to identify and execute installation services, new tower builds, new DAS builds and rooftop opportunities; (3) develop and maintain strong customer relationships; (4) continue to refine and improve proprietary leasing demand forecasting model; and (5) maintain |
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succession plans. Mr. Moreland proposed and the Committee approved an “Exceeds Expectations” performance rating with respect to Mr. Slowey's 2015 individual performance goals.
We believe(a) See Appendix C for definition of this approach to determiningnon-GAAP financial and individual goals provides the appropriate balance and oversight to our goal-setting process.
Following the AIP Year End, an individual performance rating is (1) determined and approved by the Committee for the CEO and (2) proposed by the CEO and reviewed and considered for approval by the Committee for each of the other executives, based on their performance versus the individual performance goals established at the beginning of the year. An individual payout multiple is then determined based on the individual performance rating as follows (the Committee and the CEO may use positive or negative discretion regarding the exact payout multiples relative to the individual performance ratings):
Exceeds Expectationsmeasure.: A corporate and business unit operating executive may earn an individual performance payout multiple of 146% to 175% of target, and a functional executive may earn an individual performance payout multiple of 131% to 150% of target.
Meets Plus Expectations: A corporate and business unit operating executive may earn an individual performance payout multiple of 116% to 145% of target, and a functional executive may earn an individual performance payout multiple of 111% to 130% of target.
Meets Expectations: A corporate and business unit operating executive may earn an individual performance payout multiple of 90% to 115% of target, and a functional executive may earn an individual performance payout multiple of 90% to 110%.
Meets Most Expectations: An executive may earn an individual performance payout multiple of 50% to 89% of target.
Does Not Meet Expectations: If an executive is rated “Does Not Meet Expectations,” such executive will not earn or be paid any Annual Incentive.
There are also two additional performance requirements for an Annual Incentive:
•A minimum financial performance level of 95% of budgeted Corporate Adjusted EBITDA must be achieved for any executive to be eligible for an Annual Incentive; and
•The business units or departments for which the executives are responsible must receive an acceptable assessment of applicable internal control over financial reporting for the previously completed fiscal year, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“("404 Assessment”Assessment"). Receipt of a 404 Assessment with a material weakness significant deficiency or other material internal control issues may result in a reduction or elimination of the potential Annual Incentives for the responsible executives and potentially all of the executives.
For 2015, each NEO received an Annual Incentive based on the following applicable total payout multiples of target, all of which fall within the payout multiple parameters described above:
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Name | | Title | | Corporate/Business Unit Performance Goals | | Individual Performance Goals | | Total |
W. Benjamin Moreland | | President & CEO | | 127% | | 170% | | 138% |
Jay A. Brown | | SVP, CFO & Treasurer | | 127% | | 170% | | 138% |
James D. Young | | SVP & COO | | 127% | | 170% | | 138% |
E. Blake Hawk | | Former EVP & General Counsel | | 119% | | 140% | | 129% |
Patrick Slowey | | SVP & CCO | | 151% | | 170% | | 155% |
Additional details regarding Annual Incentives for the NEOs are provided below in the tables and related footnotes at “—"—Summary Compensation Table”Table" and “—"—Grants of Plan-Based Awards in 2015”2021" in this “VII."VIII. Executive Compensation.”"
Long-Term Incentives
The objectives of our long-term incentive program are to:
•align a significant portion of our executives’executives' compensation with the relative total return experienced by our stockholders;
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•provide a means for our executives to accumulate shares of Common Stock in order to foster an “ownership culture”"ownership culture"; and
•serve as a retention vehicle for our executives.
The long-term incentive component represents the largest portion of the overall value of the total compensation program for our executives. With respect to theIn its assessment of long-term incentives, for recent prior years, including 2015, the Committee, with the assistance of our Compensation Consultant, assessedgenerally considers the economic climate, executive compensation market data and our business needs andneeds. In doing so, the Committee has determined that a mix of performance-contingent equity and time vesting equity would be appropriate to achieveappropriately achieves our executive long-term incentive program objectives. In order to accomplish its overall objectives, the Committee has identified the following factorsprinciples for developing the framework ofadministering the long-term incentive program. The program should:
•align executives with stockholders to maximize TSR;
•balance “at risk”"at risk" performance-based vesting with the stability of time-based vesting;
•promote a long-term perspective among executives to complement the short-term perspective promoted by the Annual Incentive awards;Incentives;
•promote an ownership culture by facilitating the accumulation and retention of shares of Common Stock;
align executives with stockholders to maximize total stockholder return;
•be efficient from a tax and stockholder dilution perspective;
•serve as a retention vehicle; and
be cash-efficient by emphasizing the use of Common Stock; and
•provide stability to our overall compensation program.
Although our 2013 PlanLTIP (approved by our stockholders on May 23, 2013) permits the use of various types of equity compensation vehicles, the Committee believes the use primarily of a mix of performance-contingent RSUs and time vesting RSUs best meets the objectives outlined above. The Committee utilizes RSUs in various forms to meet these objectives.
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RSUs
General. There are three general categories of RSUs which the Committee has granted to executives in recent years,5 which generally have the vesting attributes noted below:6
•Annual RSUs (“"Annual RSUs”RSUs") are generally awarded once per calendar year as part of delivering a competitive total compensation package to executives. The Annual RSUs granted to executives have generally been comprised of a combination of (1) Performance RSUs that vest upon the satisfaction of certain Common Stock performance criteria over a certain period of time along with a time vesting component and (2) Time RSUs vesting solely pursuant to a time-based vesting criteria. Annual RSUs granted to non-executive employees are typically Time RSUs.
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• | New Hire RSUs (“New Hire RSUs”) are Time RSUs7 awarded to certain newly hired executives based on the position and role into which they are hired.
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Promotion RSUs (“Promotion RSUs”) are Performance RSUs or Time RSUs awarded to certain executives in recognition of a promotion to a new position or role.
Annual RSUs are generally approved by the Committee at the First Regular Committee Meeting of the year. The Committee reviews and approves the executive RSU program summary, which summarizes the parameters of theFor Annual RSUs awarded in 2021, see "—Long-Term Incentives—RSUs—2021 Annual RSUs" in this "VIII. Executive Compensation."
•New Hire RSUs ("New Hire RSUs") are Time RSUs awarded to certain newly hired executives based on the position and Promotion RSUs for grant to executives in the current fiscal year pursuant to our 2013 Plan.role into which they are hired and typically vest over a three-year period. No New Hire RSUs or Promotion RSUs were grantedawarded to any NEO in 2015.2021.
•Promotion RSUs ("Promotion RSUs") are typically Time RSUs awarded to certain executives in recognition of a promotion to a new position or role and typically vest over a three-year period. No Promotion RSUs were awarded to any NEO in 2021.
In addition, to the foregoing, other RSUs (“("Other RSUs”RSUs") may be awarded to certain executives in a given year to meet specific business initiatives or compensation objectives (e.g., retention, merger integration, etc.) or to recognize certain executives for exceptional performance. No Other RSUs were granted to any NEO in 2015.2021.
5 Commencing in 2014, we transitioned from the use of restricted stock awards ("RSAs") to RSUs for long-term incentives. As such, references to RSUs in this "—CD&A—Elements of Executive Compensation and Benefits—Long-Term Incentives—RSUs—General" generally apply equally with respect to RSAs for recent years prior to 2014.
6With respect to RSAs granted prior to 2014, cash dividends on shares of restricted stock underlying such RSAs are paid at the same times and in the same amounts as on other shares of our Common Stock. With respect to RSUs granted since 2014, dividendDividend equivalents accrue with respect to RSUs while they remain outstanding and unvested (equal to the cash dividends paid with respect to each share of underlying Common Stock). The dividend equivalents are subject to the same forfeiture restrictions as the RSUs. The dividendDividend equivalents are earned and paid in cash only with respect to those RSUs that actually vest, and they are paid in cash at approximately the time of such vesting.
Annual RSUs Overview.
The table below illustrates the framework of the Annual RSUs.
Our framework for the Annual RSUs places an appropriate level of focus on performance-contingent vesting, which is targeted to 65% of the total grant value for the NEOs. We believe that by tying a portion of the award value to absolute TSR, the compensation realized by our NEOs will be better aligned with the actual returns experienced by our stockholders, regardless of the general economic climate.
In the second half of 2020, the Committee, with assistance from the Compensation Consultant, conducted a comprehensive review of the design of the Company's Annual RSU framework described above. Based on such review, the Committee determined that the Annual RSU framework in place was achieving the desired objectives of our long-term incentive compensation program.
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2015
2021 Annual RSUs.
To support the pay-for-performance"pay-for-performance" approach and maintain a significant portion of the executives’executives' compensation at"at risk," in the first quarter of 2015,2021, the Committee authorized, as 20152021 Annual RSUs, the grant to the NEOs and certain other key employees of a combination of (1) of:
•Time RSUs which time vest at 33.33%, 33.33% and 33.34%, respectively, on February 19 of each of 2016, 20172022, 2023 and 2018 (“2015 Time RSUs”) and (2)2024;
•Relative TSR Performance RSUs which may vest based on our TSR Rank (defined below) relative to a TSR Peer Group (defined below)the companies contained in the Standard and Poor's 500 index ("S&P 500 Index") over a three yearthree-year performance period as further described below (“2015("Relative TSR Performance RSUs”RSUs"); and
•Absolute TSR Performance RSUs which may vest based on the absolute annualized total return of our stock ("Annualized TSR") compared to pre-established hurdles over a three-year performance period ("Absolute TSR Performance RSUs").
With respect to the 20152021 Annual RSUs granted to the NEOs, the grant value mix between 2015was allocated approximately 35% to Time RSUs, and 201535% to Relative TSR Performance RSUs, is approximately 35% and 65%30% to Absolute TSR Performance RSUs.81, respectively, of the combined total grant value for each NEO (“Grant Value”). In connection with the 20152021 Annual RSUs, the Committee authorized the grant of RSUs to approximately 461,557 20152,200 employees, which represented approximately 46% of our workforce, including 50,723 Time RSUs, to 991 employees and approximately 506,5159 201551,377 Relative TSR Performance RSUs to 58 employees, including 56,712 2015 Time RSUs to the NEOs and 195,97210 201578,795 Absolute TSR Performance RSUs to the NEOs.
Each 2015The Performance RSU isRSUs have been issued pursuant to the 2013 PlanLTIP and representsrepresent a contingent right to receive one share of Common Stock. The termsStock equal to 0% to 150% of the 2015target number of Performance RSUs.2 Vesting of the Performance RSUs generally provide that,is subject to (1) the level of achievement against the relevant performance criteria over a three-year performance period (beginning January 1, 2021 and ending December 31, 2023), and (2) the executive remaining an employee or director of ours (including our affiliates) until February 19, 2018, 0% to 100% of such RSUs may vest (i.e., forfeiture restrictions terminate) on February 19, 2018 based upon the Company’s total stockholder return (“TSR”) performance ranking (“TSR Rank”) relative to a peer group of companies approved by the Committee (“TSR Peer Group”) for the three year period ending February 12, 2018 (“TSR Period”).10 If the TSR Rank is at the 30th percentile or more up to the 55th percentile, then 33.34% to 66.67% of the Performance RSUs vest on a pro rata basis based upon the level of the TSR Rank (i.e., approximately an additional 1.3336% of the units vest for each 1.0 percentile increase in the TSR Rank above the 30th percentile up to the 55th percentile), with 66.67% of the Performance RSUs vesting at the 55th percentile. If the TSR Rank is at the 55th percentile or more, then 66.67% to 100% of the Performance RSUs vest on a pro rata basis based upon the level of the TSR Rank (i.e., approximately an additional 0.95229% of the units vest for each 1.0 percentile increase in the TSR Rank above the 55th percentile up to the 90th percentile (or above)), with 100% of the units vesting at or above the 90th percentile. However, if the TSR is negative for the TSR Period and the TSR Rank is at or above the 30th percentile, only 33.34% of the Performance RSUs will vest. If the TSR Rank is below the 30th percentile, 100% of the Performance RSUs will be forfeited.2024.
8•With respect to the 2015Relative TSR Performance RSUs granted in 2021, the 65%number of Grant Value representsunits that may vest is based upon the Company's TSR performance ranking ("TSR Rank") relative to the companies included in the S&P 500 Index, with the target levelnumber of such awardunits being earned if the TSR Rank equals the 55th percentile of the S&P 500 Index.
•With respect to the Absolute TSR Performance RSUs granted in 2021, the number of units that may vest is based upon the Company's Annualized TSR compared to pre-established hurdles, with the target number of units being earned if Annualized TSR equals 11.5%.
The table below illustrates the payout range for each NEO (“Target Level”).the Performance RSUs granted in 2021.
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Relative TSR Performance RSUs(a) | | Absolute TSR Performance RSUs(b) |
Performance Level | | TSR Rank | | Vesting | Performance Level | | Annualized TSR | | Vesting |
| | | | | | | | | |
Maximum | | 90th percentile | | 150% | Maximum | | 16.5% | | 150% |
Target | | 55th percentile | | 100% | Target | | 11.5% | | 100% |
Threshold | | 30th percentile | | 50% | Threshold | | 6.5% | | 50% |
Below Threshold | | <30th percentile | | 0% | Below Threshold | | <6.5% | | 0% |
(a) For TSR Rank outcomes (a) between the 30th and 55th percentiles of the S&P 500 companies or (b) between the 55th and 90th percentiles of the S&P 500 companies, the percentage of target units earned will be calculated via linear interpolation.
(b) For Annualized TSR outcomes (a) between 6.5% and 11.5% or (b) between 11.5% and 16.5%, the percentage of target units earned will be calculated via linear interpolation.
1 Because the Committee utilizes a structural Monte Carlo valuation prepared by the Compensation Consultant for purposes of determining the number of Performance RSUs to grant to the NEOs, as further described at “—"—CD&A—Elements of Executive Compensation and Benefits—Long-Term Incentives—RSUs—RSU Valuations and Grant Levels,”" the grant date fair value of such awards for accounting purposes pursuant to Financial Accounting Standards Board's Accounting Standards Codification Topic 718 ("ASC 718") may be more or less than 65% ofvary from the Grant Value.targeted grant mix.
9The number of 2015 Performance RSUs granted is the maximum number of such RSUs that will vest at or above a 90th2 percentile TSR Rank being achieved upon completion of the TSR Period.
10The Committee has the authority to interpret and determine the application and calculation of matters relating to the determination of TSR, and TSR Rank and Annualized TSR and to make adjustments it deems appropriate to reflect changes in (1) the Common Stock, including as a result of any stock split or consolidation, stock dividend, recapitalization, merger, reorganization, or other relevant distribution or change in capitalization, or (2) the TSR Peer Group, including as a result of any TSR Peer Group company becoming bankrupt, being acquired, disposing of a material portion of its assets (including spin-offs), being delisted from a stock exchange, or splitting its common stock (or other change to such company’s stock or capitalization).capitalization.
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The graph below illustrates the payout range for the 2015 Performance RSUs.
The TSR Peer Group utilized in connection with the 2015 Performance RSUs differs from, but overlaps with, the Peer Group utilized in connection with the Competitive Market Analysis for assessing the executives’ 2015 compensation. The TSR Peer Group11 includes companies which the Committee believes are comparable investment alternatives to us, as listed below:
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• American Tower Corporation
| • Prologis, Inc.
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• AT&T Inc.
| • SBA Communications Corporation
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• Boston Properties, Inc.
| • Simon Property Group, Inc.
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• Equinix, Inc.
| • Sprint Corporation
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• F5 Networks, Inc.
| • T-Mobile US, Inc.
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• Frontier Communications Corporation
| • United States Cellular Corporation
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• General Growth Properties, Inc.
| • Ventas, Inc.
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• HCP, Inc.
| • Verizon Communications Inc.
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• Juniper Networks, Inc.
| • Vornado Realty Trust
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• Lamar Advertising Company
| • Welltower, Inc. (formerly Health Care REIT, Inc.)
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• NetApp, Inc.
| • Windstream Holdings, Inc.
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The levels at which the TSR Rank and Annualized TSR vesting targets are established for a given year’s Performance RSU grant are generally reviewed and approved at the First Regular Committee Meeting of the grant year. The review generally includes an analysis of (1) historical Common Stock price performance, (2) our financial forecasts and budgets and (3) performance contingent equity compensation market practices as disclosed in third partythird-party market sources, which includes consideration of market and industry trends.
Additional information regarding the Performance RSUs described above is provided below in the tables and related footnotes at “—"—Summary Compensation Table”Table" and “—"—Grants of Plan-Based Awards in 2015”2021" in this “VII."VIII. Executive Compensation.”"
RSU Valuations and Grant Levels. In determining RSU valuations and grant levels with respect to Annual RSUs, as with the other components of executive compensation, the Committee targets total direct compensation for our executives at approximately the 50th percentile of market. The Committee, with the assistance of the
11Similar to the changes approved for the 2016 Peer Group (see footnote 2 above in this CD&A), the Committee approved the removal of Windstream Holdings, Inc. for the 2016 TSR Peer Group to be utilized in connection with Performance RSUs granted to executives in February 2016.
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Compensation Consultant, examines the long-term incentive practices at the Peer Group and other companies reviewed in the Competitive Market Analysis to establish market-based ranges of RSU multiples of base salarylong-term incentive grant levels for each executive. An RSU multiple of base salary,Long-term incentive grant levels, generally based on our overall financial performance for the prior year and each executive’sexecutive's individual performance and anticipated future role, isare then (1) determined and approved by the Committee for the CEO and (2) proposed by the CEO and reviewed and considered for approval by the Committee for each of the other executives. The fair value of the RSUs, as determined by the Compensation Consultant, is then converted into a number of units to be granted to each executive. The valuation methodology used to value the 2015 Time RSUs awarded in 2021 is summarized in notes 2 and 1311 to our consolidated financial statements in our 20152021 Form 10-K; the10-K. The Committee utilized a structural Monte Carlo valuation, as determined by the Compensation Consultant, based on the average closing price of our Common Stock for the 3020 trading days ending on the dateday prior to the start of grant,the performance period, to value the 2015 Performance RSUs for purposes of determining the number of units to be granted.granted in 2021.
In addition to considering the valuation of each RSU grant, management and the Committee also consider the overall potential stockholder dilution impact and “burn rate”"burn rate" (i.e., the rate at which awards are granted as a percentage of common sharesCommon Stock outstanding). Each year, the Committee reviews and recommends to the Board for approval a budgeted grant date value of shares that may be used in connection with the grant of Annual RSUs to the executives and our other eligible employees. This review and recommendation process includes an analysis of potential dilution levels and burn rates resulting from the potential grant of such RSUs as compared to independent third partythird-party surveys which may include Towers Watson and others, and the Peer Group. The Committee and management use this competitive market data regarding dilution levels and burn rates as an additional gauge in making decisions regarding annual grants of long-term equity compensation.
Our potential stockholder dilution, or “overhang,”"overhang," related to long-term incentive awards outstanding as well as shares reserved for future issuance under the 2013 PlanLTIP was approximately 3.7%1.5% as of December 31, 2015,2021, and our 20152021 burn rate was approximately 0.3%0.22%. We believe our stockholder dilution and burn rates are competitively low relative to comparable companies (based upon similar analyses of the third party surveys identified above)third-party surveys), as well as our Peer Group.
Treatment of RSUs Upon Eligible Retirement. Other Benefits and Perquisites
In November 2015,addition to base salary, short-term incentives and long-term incentives, we provide the Board approved a program designed to make available certain retirement typeother benefits to all employees, including the NEOs, that meet certain ageoutlined below. We believe these other benefits support our overall attraction and service requirements. Generally, to be eligible, (1) the sum of an employee's age and years of service as an employee must be at least 70, with age and service minimums of 55 years and 10 years, respectively, and (2) the employee must provide us with at least nine months' prior notice of his or her intention to terminate employment. Assuming these conditions are satisfied, RSUs held by such employees that were granted at least six months prior to termination will continue to have the opportunity to vest pursuant to their terms (other than the employment requirement), subject to certain additional conditions, including the execution of a full release, an agreement to not compete with us for a period of 12 months and an agreement to be available for consultation with us during such 12-month period. As to an employee not holding RSUs, the program generally provides that, in connection with employment termination, an employee who meets the above eligibility requirements will receive a fully-vested, discretionary, profit-sharing contribution pursuant to the Company’s 401(k) plan equal to 25% of the employee’s base salary. The program is subject to interpretation, modification or termination by the Committee or Board in the sole discretion of each at any time.retention objectives.
Severance Agreements
The Committee believes establishing competitive severance arrangements with our executives is a key part of a total rewards package to effectively recruit and retain high-performing executives. We have entered into severance agreements containing severance benefits and non-compete and non-solicitation provisions with each NEOof our NEOs and certain other seniorexecutive officers (as amended, “Severance Agreements”"Severance Agreements"). We do not currently have employmentemployment-related agreements with any of our executivesNEOs other than the Severance Agreements.
Pursuant to each Severance Agreement, we are generally required to provide severance benefits to the officer if such officer is terminated without cause (as defined in the Severance Agreement) or such officer terminates employment with good reasonGood Reason (as defined in the Severance Agreement) (collectively a “qualifying termination”"qualifying termination").
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The Severance Agreements provide for enhanced severance benefits if the officer incurs a qualifying termination within two years following a changeChange in controlControl (as defined in the Severance Agreements).
In 2014, theThe Committee has adopted a policy not to enter into any agreement providing for an excise tax “gross up”"gross up" payment relating to an “excess"excess parachute payment”payment" (pursuant to Section 280G of the Internal Revenue Code of
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CROWN CASTLE INTERNATIONAL CORP. | | PROXY STATEMENT |
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1986, as amended (“Code”("Code")) (“("Excise Tax Payment”Payment"). In connection with the adoption of such policy, the, and no existing Severance Agreements were amended to remove allcontain Excise Tax Payment provisions.
We periodically review the level of officer severance benefits by analyzing our severance benefits as compared to competitive market severance and change-in-control practices as provided in surveys and information from third parties, which may include Towers Watson and others.parties. Subsequent Severance Agreements may be different as a result of such reviews.
Details regarding the severance benefits provided under the Severance Agreements including a description of certain amendments approved by the Committee at the First Regular Committee Meeting of 2016, and the potential value thereof are provided below at “—"—Potential Payments Upon Termination of Employment”Employment" in this “VII."VIII. Executive Compensation.”"
Other BenefitsExtended Service Separation Program
The Board has approved a program designed to make available certain retirement-type benefits to all employees, including the NEOs, that meet certain age and Perquisitesservice requirements. Generally, to be eligible, (1) the sum of an employee's age and years of service as an employee must be at least 70, (2) the employee must be credited with at least 10 years' service, (3) the employee must be at least 50 years old (55 years old for separations occurring prior to February 17, 2022) and (4) the employee must provide us with at least six months' prior notice (or, for certain non-executive positions, three months' prior notice) of his or her intention to terminate employment. Assuming these conditions are satisfied, RSUs held by such employees that were granted at least six months prior to termination will continue to have the opportunity to vest pursuant to their terms (other than the employment requirement), subject to certain additional conditions, including the execution of a full release, an agreement to not compete with us for a period of 12 months and an agreement to be available for consultation with us during such 12-month period. As to an employee not holding RSUs, the program generally provides that, in connection with employment termination, an employee who meets the above eligibility requirements will receive a fully-vested, discretionary, profit-sharing contribution pursuant to the Company's 401(k) Plan equal to 25% of the employee's base salary. The program is subject to interpretation, modification or termination by the Committee or Board in the sole discretion of each at any time.
In additionconnection with his retirement from the Company on February 21, 2022, Mr. Ackerman qualified for the benefits under the Extended Service Separation Program. Accordingly, all of Mr. Ackerman's unvested RSUs will continue to base pay, short-term incentives, long-term incentives and severance benefits, we providehave the other benefits outlined below. We believe these other benefits support our overall attraction and retention objectives.opportunity to vest pursuant to their terms (other than the employment requirement), subject to the additional conditions noted above.
Retirement Benefits
Our executives are eligible to participate in our 401(k) Plan under the same parameters applicable to all other employees, including eligibility for (1) a base matching contribution equal to 100% of the first 3% of the executive’sexecutive's compensation contributed (“("Base Match”Match"), (2) a discretionary annual matching contribution equal to 100% of the next 3% of the executive’sexecutive's compensation contributed (“("Discretionary Match”Match") and (3) beginning in 2014, an additional discretionary profit sharing contribution equal to 4% of the employee’semployee's base salary (“("Discretionary Contribution”Contribution"). In each case, the Base Match, the Discretionary Match and the Discretionary Contribution are (1) subject to the Committee's discretion and (2) treated as subject to Internal Revenue Service ("IRS") limitations. The value of our Base Match, Discretionary Match and Discretionary Match contributionsContribution for each NEO for the 2015, 2014 and 2013 401(k) Plan years and the Discretionary Contributions for each NEO for the 2015 and 2014applicable 401(k) Plan years are provided below in the table at “—"—Summary Compensation Table”Table" and "—All Other Compensation Table" in this “VII."VIII. Executive Compensation.”"
Health and Welfare Benefits
Our executives are eligible to participate in the same health and welfare benefits that are available to our other eligible employees, such as medical, dental, vision, life and disability insurance. The value of the health and welfare benefits paid by us for each NEO in 2015, 2014 and 2013applicable years is provided below in the tables at “—"—Summary Compensation Table”Table" and “—"—All Other Compensation Table”Table" in this “VII."VIII. Executive Compensation.”"
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Relocation Benefits
In general, we do not offer our executives significant perquisites, other than relocation assistance (which includes expatriate benefits for international assignments).assistance. We generally offer relocation assistance to all of our employees (including our executives) who we ask to relocate in connection with their employment with us, with the level of benefits generally corresponding to the level of the employee’semployee's position. We have found that relocation assistance can play an important role in attracting qualified new hire candidates or transferring existing employees to our various office locations. The primary benefits provided under our relocation assistance program to our NEOs and other senior management are generally: reasonable moving and related expenses, closing costs related to selling and buying a house and temporary living expenses, if needed, for up to 60 days. No relocation benefits were provided to our NEOs in 2015.2021.
Other Matters
Stock Ownership and Retention Guidelines
In order to further align the interests of our seniorexecutive management with those of our stockholders, we have adopted certain stock ownership and retention guidelines designed to support a culture of ownership among the NEOs and certain other seniorexecutive officers. The Committee believes the maintenance of Common Stockstock ownership and retention guidelines motivates executives to perform in accordance with the interests of our stockholders. The guideline ownership levels are designed to ensure that executives have a meaningful economic stake in our Common Stock, while satisfying the executives’executives' need for portfolio diversification.
Our stock ownership guidelines generally provide
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that each of the NEOs should seek to establish and maintain beneficial ownership of a number of shares of Common Stock having a value sufficient to satisfy the applicable stock ownership level specified below:
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Executive | Name | Title | | Multiple of Base Salary(a)
|
W. Benjamin Moreland | | President & CEO | | 6X Salary(a) |
Jay A. Brown | President & CEO | SVP,6X |
Daniel K. Schlanger | EVP & CFO & Treasurer | | 3X |
James D. YoungMichael J. Kavanagh | | SVPEVP & COO | CCO | 3X |
E. Blake HawkKenneth J. Simon | | Former EVP & General Counsel | 3X |
Christopher D. Levendos | EVP & COO—Fiber | 3X |
Patrick SloweyRobert C. Ackerman | | SVPFormer EVP & CCO | COO—Towers | 3X |
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(a) | Represents the dollar value of Common Stock to be held, as determined pursuant to NYSE quotations.
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(a)Represents the dollar value of Common Stock to be held, as determined pursuant to NYSE quotations.
The NEOs generally have until March 25, 2018the fifth anniversary of the date such NEO was appointed EVP or higher to meet the applicable stock ownership level.12 In addition, an NEO generally has until the fifth anniversary after the date of an increase in base salary to meet the incremental increase to the applicable stock ownership level as a result of such base salary increase. As of the Record Date, each of the NEOs serving at that time held shares of Common Stock (as calculated pursuant to the stock ownership guidelines) having a value in excess of such NEO’sNEO's applicable sharestock ownership level specified by the stock ownership guidelines.
Our retention guidelines provide that if an NEO’sNEO's Common Stock ownership is below (or subsequently falls below) the applicable stock ownership level, such NEO should generally hold and retain all shares of Common Stock received by the NEO resulting from equity awards granted to the NEO by the Company as a component of compensation until the NEO’sNEO's applicable stock ownership level is met. The retention guidelines apply with respect to “after-tax shares”"after-tax shares" (e.g., the sale of shares to cover taxes relating to Company granted equity awards is not subject to the stock ownership guidelines).
Anti-Hedging Policy
Our insider trading policy prohibits our directors and employees, including our executive officers, from, among other things, short sales and trading in options, puts, calls or other derivative instruments relating to our securities, including for hedging purposes.
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Recoupment Policy
Pursuant to our Recoupment Policy, in the event of a restatement of a Company financial statement or a determination by the Board that misconduct by an NEO or certain other employees caused financial or reputational harm to the Company, the Committee will review the circumstances and make recommendations to the Board as to whether recoupment should be pursued. Under the policy, “misconduct”"misconduct" includes any intentional or reckless violation of our guidelines and policies or any grossly negligent act or failure to act causing the above described result. TheIn such circumstances, the Committee will review all compensation that has been awarded to a responsible party and determine how such compensation may have been affected by the financial restatements or misconduct.
Should the Board determine that recoupment is appropriate, we may recoup from an NEO or other responsible employee any cash incentives and equity awarded in reliance on the financial statements that were restated, or for the year in which the financial or reputational harm occurred, to the extent the Committee determines that the cash incentives and equity awarded were based on such restated financial statements or resulted from such misconduct. The NEO and other responsible employees may also be subject to other disciplinary actions, up to and including termination of employment.
Accounting and Tax Impacts upon Executive Compensation
For a discussion of the accounting impacts on various elements of long-term incentive compensation, see notes 2 and 1311 to our consolidated financial statements in our 20152021 Form 10-K.
Section 162(m) of the Code generally disallows a public company’s tax deduction for compensation paid to the CEO and the four other most highly compensated officers in excess of $1 million in any taxable year, other than the principal financial officer. However, qualifying performance-based compensation is not subject to the deduction limit if certain requirements are satisfied.
12In addition, an NEO generally has until the fifth anniversary after the date of an increase in base salary to meet the incremental increase to the applicable stock ownership level as a result of such base salary increase.
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In determining executive compensation, the Committee considers, among other factors, the possible tax consequences. Tax consequences, including tax deductibility, are subject to many factors (such as changes in the tax laws) that are beyond our control. In addition, the Committee believes that it is important to retain flexibility in designing compensation programs that meet its stated objectives. For these reasons, the Committee, while considering tax deductibility as one of the factors in determining compensation, doeshas historically not limitlimited compensation to those levels or types of compensation that will be deductible by us.
To this end, the AIP does not qualify for theGenerally, Section 162(m) exemption even though it is an annual performance-based cash program based on pre-established goals and objectives primarily because the Committee maintains some level of subjectivity regarding the payout multiple applied to the executive based on the Committee’s assessment of the executive’s individual performance.
AllCode precludes a public corporation from taking a deduction for annual compensation attributable to the vesting of Performance RSAs during 2015 satisfied the requirements for deductibility under Section 162(m). For 2015, the portion of combined base salary, Annual Incentive, and vesting of Time RSAs in excess of $1 million$1,000,000 paid to its covered employees (as defined in Section 162(m)). Our Section 162(m) covered employees include our principal executive officer, our principal financial officer, our three next highest-paid officers and any employee who has been classified previously as a covered employee for Messrs. Moreland, Young, Hawk and Slowey does notpurposes of Section 162(m). Because we intend to continue to qualify as performance-based compensationa REIT under the Code, we generally distribute a sufficient level of net taxable income to our stockholders on an annual basis and as a result, do not incur U.S. federal income tax. Based on our REIT status, we do not expect the tax deduction limitations under Section 162(m) and is therefore not deductible byof the Code to have a material impact on us.
Compensation Committee 20152021 Report
The Compensation Committee has reviewed and discussed the disclosure set forth above under the heading “Compensation"Compensation Discussion and Analysis”Analysis" with management and, based on the review and discussions, it has recommended to the Board that the “Compensation"Compensation Discussion and Analysis”Analysis" be included in this Proxy Statement.
Respectfully submitted by the Compensation Committee of the Board.
Lee W. Hogan (Chair)COMPENSATION COMMITTEE
P. Robert Bartolo (Chair)
Cindy Christy
Ari Q. Fitzgerald
Robert E. Garrison IILee W. Hogan
Matthew Thornton, III
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Summary Compensation Table
The following Summary Compensation Table sets forth the compensation of the NEOs for 2015, 20142021, 2020 and 2013.2019 (where applicable). Additional details regarding the applicable elements of compensation in the Summary Compensation Table are provided in the footnotes following the table.
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Name and Principal Position | | Year | | Salary ($)(a) | | Stock Awards ($)(b) | | Non-Equity Incentive Plan Compensation ($)(c) | | All Other Compensation ($)(d) | | Total ($) |
| | | | | | | | | | | | |
Jay A. Brown | | 2021 | | 1,030,000 | | 10,504,164 | | 2,966,544 | | 52,802 | | 14,553,510 |
President & CEO | | 2020 | | 1,063,846 | | 14,397,619 | | 2,486,420 | | 51,250 | | 17,999,135 |
| | 2019 | | 985,577 | | 9,465,217 | | 2,119,541 | | 50,508 | | 12,620,843 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Daniel K. Schlanger | | 2021 | | 610,000 | | 3,256,134 | | 1,033,462 | | 52,115 | | 4,951,711 |
EVP & CFO | | 2020 | | 625,769 | | 4,395,006 | | 866,200 | | 51,411 | | 5,938,386 |
| | 2019 | | 562,404 | | 2,957,727 | | 710,669 | | 50,508 | | 4,281,308 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Michael J. Kavanagh(e) | | 2021 | | 541,538 | | 2,940,958 | | 940,281 | | 52,115 | | 4,474,892 |
EVP & CCO | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Kenneth J. Simon | | 2021 | | 591,000 | | 2,520,744 | | 1,001,272 | | 43,813 | | 4,156,829 |
EVP & General Counsel | | 2020 | | 610,423 | | 3,485,513 | | 839,220 | | 42,385 | | 4,977,541 |
| | 2019 | | 570,569 | | 2,473,795 | | 715,407 | | 49,045 | | 3,808,816 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Christopher D. Levendos(f) | | 2021 | | 486,516 | | 2,625,947 | | 838,629 | | 52,115 | | 4,003,207 |
EVP & COO—Fiber | | 2020 | | 465,699 | | 3,732,996 | | 640,253 | | 52,307 | | 4,891,255 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Robert C. Ackerman(g) | | 2021 | | 510,000 | | 3,256,134 | | 864,042 | | 52,115 | | 4,682,291 |
Former EVP & COO— | | 2020 | | 523,846 | | 4,395,006 | | 724,200 | | 51,411 | | 5,694,463 |
Towers | | 2019 | | 474,231 | | 2,957,727 | | 598,458 | | 51,672 | | 4,082,088 |
| | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary ($)(a) | | Stock Awards ($)(b) | | Non-Equity Incentive Plan Compensation ($)(c) | | All Other Compensation ($)(d) | | Total ($) |
W. Benjamin Moreland | | 2015 | | $ | 978,141 |
| | $ | 6,927,030 |
| | $ | 2,031,897 |
| | $ | 44,256 |
| | $ | 9,981,324 |
|
President & CEO | | 2014 | | 934,808 |
| | 5,491,295 |
| | 1,932,743 |
| | 53,896 |
| | 8,412,742 |
|
| | 2013 | | 825,192 |
| | 4,887,493 |
| | 1,643,653 |
| | 32,771 |
| | 7,389,109 |
|
| | | | | | | | | | | | |
Jay A. Brown | | 2015 | | 516,686 |
| | 2,524,751 |
| | 719,421 |
| | 44,255 |
| | 3,805,113 |
|
SVP, CFO & Treasurer | | 2014 | | 489,874 |
| | 2,093,690 |
| | 664,665 |
| | 53,975 |
| | 3,302,204 |
|
| | 2013 | | 470,938 |
| | 1,960,965 |
| | 609,668 |
| | 32,741 |
| | 3,074,312 |
|
| | | | | | | | | | | | |
James D. Young | | 2015 | | 514,130 |
| | 2,512,333 |
| | 715,881 |
| | 36,296 |
| | 3,778,640 |
|
SVP & COO | | 2014 | | 487,392 |
| | 2,083,128 |
| | 661,298 |
| | 45,954 |
| | 3,277,772 |
|
| | 2013 | | 468,528 |
| | 1,951,028 |
| | 606,579 |
| | 24,862 |
| | 3,050,997 |
|
| | | | | | | | | | | | |
E. Blake Hawk(e) | | 2015 | | 475,658 |
| | 2,066,982 |
| | 621,908 |
| | 41,784 |
| | 3,206,332 |
|
Former EVP & General Counsel | | 2014 | | 450,042 |
| | 1,584,010 |
| | 526,236 |
| | 51,550 |
| | 2,611,838 |
|
| | 2013 | | 434,133 |
| | 1,318,190 |
| | 474,800 |
| | 30,330 |
| | 2,257,453 |
|
| | | | | | | | | | | | |
Patrick Slowey | | 2015 | | 445,760 |
| | 1,211,121 |
| | 592,839 |
| | 44,199 |
| | 2,293,919 |
|
SVP & CCO | | 2014 | | 416,347 |
| | 1,058,472 |
| | 512,359 |
| | 53,897 |
| | 2,041,075 |
|
| | 2013 | | 380,882 |
| | 966,967 |
| | 449,710 |
| | 32,644 |
| | 1,830,203 |
|
| | |
(a) | Represents the dollar value of base salary earned by the NEO during the applicable fiscal year. In the first quarter of 2015, the NEOs received annual increases to their base salaries ranging from 3.0% to 6.5%. In the first quarter of 2014, the NEOs received annual increases to their base salaries ranging from 3.0% to 12.4%. In the first quarter of 2013, the NEOs received annual increases to their base salaries ranging from 6.6% to 17.9%. |
| |
(b) | Represents the aggregate grant date fair value of stock awards granted to each NEO in the applicable fiscal year, calculated in accordance with ASC 718. A description of the vesting parameters that are generally applicable to the RSUs granted in 2015 is provided above at “–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs” in this “VII. Executive Compensation.” |
| |
(c) | Represents the value of the Annual Incentive awards earned by the NEOs for meeting financial performance and individual performance objectives in the applicable fiscal year under the applicable AIP. These Annual Incentives are paid in cash. Additional details regarding the range of the NEOs’ 2015 Annual Incentive award opportunities are disclosed above at “–CD&A–Elements of Executive Compensation and Benefits–Short-Term Incentives” and below in the table and related footnotes at “–Grants of Plan-Based Awards in 2015” in this “VII. Executive Compensation.” |
| |
(d) | Represents the aggregate value of all other compensation for the applicable fiscal year not otherwise reported in any other column of the Summary Compensation Table. This amount includes our matching contributions and profit sharing contributions to the executives under the 401(k) Plan and the dollar value of the portion of the health and welfare benefits and insurance premiums paid by us for the NEO relating to the applicable fiscal year. Additional details regarding these amounts are provided in the table below at “–All Other Compensation Table” and the footnotes thereto in this “VII. Executive Compensation.” |
| |
(e) | Mr. Hawk retired from the position of EVP & General Counsel effective at the end of the day on December 31, 2015 ("Mr. Hawk's Retirement"). Following such retirement, Mr. Hawk remains an employee in an advisory capacity in order to assist us on various matters, including special projects and the transition of his successor, Mr. Simon. |
(a)Represents the dollar value of base salary earned by the NEO during the applicable fiscal year, inclusive of annual increases approved in the first quarter of 2021. Due to the timing of the Company's bi-weekly payrolls, there were 27 pay periods during calendar year 2020 compared to 26 pay periods in each of calendar years 2019 and 2021.
(b)Represents the aggregate grant date fair value of stock awards granted to each NEO in the applicable fiscal year, calculated in accordance with ASC 718. A description of the vesting parameters that are generally applicable to the RSUs granted in 2021 is provided above at "–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs" and below in the table and related footnotes at "–Grants of Plan-Based Awards in 2021" in this "VIII. Executive Compensation."
(c)Represents the value of the Annual Incentives earned by the NEOs for the applicable fiscal year under the applicable AIP. These Annual Incentives are paid in cash. Additional details regarding the range of the NEOs' 2021 Annual Incentive award opportunities are disclosed above at "–CD&A–Elements of Executive Compensation and Benefits–Short-Term Incentives" and below in the table and related footnotes at "–Grants of Plan-Based Awards in 2021" in this "VIII. Executive Compensation."
(d)Represents the aggregate value of all other compensation for the applicable fiscal year not otherwise reported in any other column of the Summary Compensation Table. This amount includes matching contributions and profit sharing contributions made by us to the executives under the 401(k) Plan and the dollar value of the portion of the health and welfare benefits and insurance premiums paid by us for the NEO in the applicable fiscal year. Additional details regarding the amounts reported in this column are provided in the table below at "–All Other Compensation Table" and the footnotes thereto in this "VIII. Executive Compensation."
(e)Mr. Kavanagh first qualified as an NEO for 2021, and, therefore, compensation information is provided for him with respect to 2021 only.
(f)Mr. Levendos was appointed EVP & COO—Fiber effective December 1, 2020.
(g)Mr. Ackerman retired from the position of EVP & COO—Towers on August 17, 2021. To assist the Company with various matters, including the transition of his successor, Mr. Ackerman remained with the Company through February 21, 2022.
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| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
58
39
All Other Compensation Table
The following table and the footnotes thereto describe the components of the “All"All Other Compensation”Compensation" column in the Summary Compensation Table above.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Year | | Registrant Contributions to Defined Contribution Plans($)(a) | | Insurance Premiums($)(b) | | All Other Compensation($)(c) |
| | | | | | | | |
Jay A. Brown | | 2021 | | 29,000 | | 23,802 | | 52,802 |
| | 2020 | | 28,500 | | 22,750 | | 51,250 |
| | 2019 | | 28,000 | | 22,508 | | 50,508 |
| | | | | | | | |
| | | | | | | | |
Daniel K. Schlanger | | 2021 | | 29,000 | | 23,115 | | 52,115 |
| | 2020 | | 28,500 | | 22,911 | | 51,411 |
| | 2019 | | 28,000 | | 22,508 | | 50,508 |
| | | | | | | | |
| | | | | | | | |
Michael J. Kavanagh | | 2021 | | 29,000 | | 23,115 | | 52,115 |
| | | | | | | | |
| | | | | | | | |
Kenneth J. Simon | | 2021 | | 29,000 | | 14,813 | | 43,813 |
| | 2020 | | 28,500 | | 13,885 | | 42,385 |
| | 2019 | | 28,000 | | 21,045 | | 49,045 |
| | | | | | | | |
| | | | | | | | |
Christopher D. Levendos | | 2021 | | 29,000 | | 23,115 | | 52,115 |
| | 2020 | | 28,500 | | 23,807 | | 52,307 |
| | | | | | | | |
| | | | | | | | |
Robert C. Ackerman | | 2021 | | 29,000 | | 23,115 | | 52,115 |
| | 2020 | | 28,500 | | 22,911 | | 51,411 |
| | 2019 | | 28,000 | | 23,672 | | 51,672 |
| | | | | | | | |
|
| | | | | | | | | | | | | | |
Name | | Year | | Registrant Contributions to Defined Contribution Plans($)(a) | | Insurance Premiums($)(b) | | All Other Compensation($)(c) |
W. Benjamin Moreland | | 2015 | | $ | 26,500 |
| | $ | 17,756 |
| | $ | 44,256 |
|
| | 2014 | | 36,400 |
| | 17,496 |
| | 53,896 |
|
| | 2013 | | 15,300 |
| | 17,471 |
| | 32,771 |
|
| | | | | | | | |
Jay A. Brown | | 2015 | | 26,500 |
| | 17,755 |
| | 44,255 |
|
| | 2014 | | 36,400 |
| | 17,575 |
| | 53,975 |
|
| | 2013 | | 15,300 |
| | 17,441 |
| | 32,741 |
|
| | | | | | | | |
James D. Young | | 2015 | | 26,500 |
| | 9,796 |
| | 36,296 |
|
| | 2014 | | 36,400 |
| | 9,554 |
| | 45,954 |
|
| | 2013 | | 15,300 |
| | 9,562 |
| | 24,862 |
|
| | | | | | | | |
E. Blake Hawk | | 2015 | | 26,500 |
| | 15,284 |
| | 41,784 |
|
| | 2014 | | 36,400 |
| | 15,150 |
| | 51,550 |
|
| | 2013 | | 15,300 |
| | 15,030 |
| | 30,330 |
|
| | | | | | | | |
Patrick Slowey | | 2015 | | 26,500 |
| | 17,699 |
| | 44,199 |
|
| | 2014 | | 36,400 |
| | 17,496 |
| | 53,896 |
|
| | 2013 | | 15,300 |
| | 17,344 |
| | 32,644 |
|
| | |
(a) | Represents our Base Match, Discretionary Match and Discretionary Contribution made to the NEOs under the 401(k) Plan relating to the applicable fiscal year. |
| |
(b) | Represents the portion of the NEO’s health and welfare insurance premiums paid by us for the applicable fiscal year. The health and welfare benefits for which a portion of these premiums were paid included the following: |
(a) Represents our Base Match, Discretionary Match and Discretionary Contribution made to the NEOs under the 401(k) Plan relating to the applicable fiscal year.
(b) Represents the portion of the NEO's health and welfare insurance premiums paid by us for the applicable fiscal year. The health and welfare benefits for which a portion of these premiums were paid included the following:
•Medical, dental, and vision insurance
Dental insurance
•Basic life insurance
•Short-term disability insurance
•Long-term disability insurance
| |
(c) | Represents the aggregate value of all other compensation elements for the applicable fiscal year, which is included above in the “All Other Compensation” column of the table under “–Summary Compensation Table” in this “VII. Executive Compensation.” |
(c) Represents the aggregate value of all other compensation elements for the applicable fiscal year, which is included above in the "All Other Compensation" column of the table under "–Summary Compensation Table" in this "VIII. Executive Compensation."
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| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
59
40
Grants of Plan-Based Awards in 20152021
The following table and the footnotes thereto provide information regarding grants of plan-based equity and non-equity awards made to the NEOs during 2015:2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | Grant Date | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(a) | | Estimated Future Payouts Under Equity Incentive Plan Awards(b) | | All Other Stock Awards (#)(c) | | Grant Date Fair Value of Stock Awards($)(d) |
| Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | |
| | | | | | | | | | | | | | | | | |
Jay A. Brown | — | | 875,500 | | 1,751,000 | | 3,064,250 | | — | | — | | — | | — | | — |
| 2/18/21 | | — | | — | | — | | — | | — | | — | | 21,224 | | 3,499,838 |
| 2/18/21 | (e) | — | | — | | — | | 10,748 | | 21,497 | | 32,245 | | — | | 3,601,822 |
| 2/18/21 | (f) | — | | — | | — | | 16,485 | | 32,970 | | 49,455 | | — | | 3,402,504 |
| | | | | | | | | | | | | | | | | |
Daniel K. Schlanger | — | | 305,000 | | 610,000 | | 1,067,500 | | — | | — | | — | | — | | — |
| 2/18/21 | | — | | — | | — | | — | | — | | — | | 6,579 | | 1,084,877 |
| 2/18/21 | (e) | — | | — | | — | | 3,332 | | 6,664 | | 9,996 | | — | | 1,116,553 |
| 2/18/21 | (f) | — | | — | | — | | 5,110 | | 10,220 | | 15,330 | | — | | 1,054,704 |
| | | | | | | | | | | | | | | | | |
Michael J. Kavanagh | — | | 277,500 | | 555,000 | | 971,250 | | — | | — | | — | | — | | — |
| 2/18/21 | | — | | — | | — | | — | | — | | — | | 5,942 | | 979,836 |
| 2/18/21 | (e) | — | | — | | — | | 3,009 | | 6,019 | | 9,028 | | — | | 1,008,483 |
| 2/18/21 | (f) | — | | — | | — | | 4,615 | | 9,231 | | 13,846 | | — | | 952,639 |
| | | | | | | | | | | | | | | | | |
Kenneth J. Simon | — | | 295,500 | | 591,000 | | 1,034,250 | | — | | — | | — | | — | | — |
| 2/18/21 | | — | | — | | — | | — | | — | | — | | 5,093 | | 839,836 |
| 2/18/21 | (e) | — | | — | | — | | 2,579 | | 5,159 | | 7,738 | | — | | 864,390 |
| 2/18/21 | (f) | — | | — | | — | | 3,956 | | 7,912 | | 11,868 | | — | | 816,518 |
| | | | | | | | | | | | | | | | | |
Christopher D. Levendos | — | | 247,500 | | 495,000 | | 866,250 | | — | | — | | — | | — | | — |
| 2/18/21 | | — | | — | | — | | — | | — | | — | | 5,306 | | 874,959 |
| 2/18/21 | (e) | — | | — | | — | | 2,687 | | 5,374 | | 8,061 | | — | | 900,414 |
| 2/18/21 | (f) | — | | — | | — | | 4,121 | | 8,242 | | 12,363 | | — | | 850,574 |
| | | | | | | | | | | | | | | | | |
Robert C. Ackerman | — | | 255,000 | | 510,000 | | 892,500 | | — | | — | | — | | — | | — |
| 2/18/21 | | — | | — | | — | | — | | — | | — | | 6,579 | | 1,084,877 |
| 2/18/21 | (e) | — | | — | | — | | 3,332 | | 6,664 | | 9,996 | | — | | 1,116,553 |
| 2/18/21 | (f) | — | | — | | — | | 5,110 | | 10,220 | | 15,330 | | — | | 1,054,704 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Grant Date | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (a) | | Estimated Future Payouts Under Equity Incentive Plan Awards (b) | | All Other Stock Awards (#)(c) | | Grant Date Fair Value of Stock and Option Awards($)(d) |
| Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | |
W. Benjamin Moreland | | — |
| | $ | 737,738 |
| | $ | 1,475,476 |
| | $ | 2,582,083 |
| | — |
| | — |
| | — |
| | — |
| | $ | — |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 25,773 |
| | 2,257,457 |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | 29,694 |
| | 59,378 |
| | 89,063 |
| | — |
| | 4,669,573 |
|
| | | | | | | | | | | | | | | | | | |
Jay A. Brown | | — |
| | 261,207 |
| | 522,413 |
| | 914,223 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 9,394 |
| | 822,820 |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | 10,822 |
| | 21,642 |
| | 32,461 |
| | — |
| | 1,701,930 |
|
| | | | | | | | | | | | | | | | | | |
James D. Young | | — |
| | 259,921 |
| | 519,842 |
| | 909,724 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 9,348 |
| | 818,791 |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | 10,769 |
| | 21,535 |
| | 32,301 |
| | — |
| | 1,693,541 |
|
| | | | | | | | | | | | | | | | | | |
E. Blake Hawk | | — |
| | 240,577 |
| | 481,154 |
| | 721,731 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 7,691 |
| | 673,655 |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | 8,860 |
| | 17,718 |
| | 26,575 |
| | — |
| | 1,393,327 |
|
| | | | | | | | | | | | | | | | | | |
Patrick Slowey | | — |
| | 191,712 |
| | 383,424 |
| | 670,992 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4,506 |
| | 394,681 |
|
| | 2/12/15 |
| | — |
| | — |
| | — |
| | 5,192 |
| | 10,382 |
| | 15,572 |
| | — |
| | 816,440 |
|
| | |
(a) | Represents the estimated payouts that the NEOs could earn under the 2015 AIP as described in the CD&A above. The Annual Incentive opportunities for each NEO, calculated as a percentage of the NEO’s base salary, are provided above in “–CD&A–Elements of Executive Compensation and Benefits–Short Term Incentives–AIP Award Opportunity.” The actual Annual Incentives paid to each NEO under the AIP are disclosed above in the “Non-Equity Incentive Plan Compensation” column of the table at “–Summary Compensation Table” in this “VII. Executive Compensation.” |
| |
(b) | The grant listed for each NEO represents the 2015 Performance RSUs granted in the first quarter of 2015. Such grants were made pursuant to the 2013 Plan. Details regarding vesting parameters generally applicable to these RSUs are provided above in “–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs” in this “VII. Executive Compensation.” The aggregate compensation cost calculated in accordance with ASC 718 for the 2015 Performance RSUs granted to the NEOs is included above in the Stock Awards column of the table at “–Summary Compensation Table” in this “VII. Executive Compensation.” |
| |
(c) | The grant listed for each NEO represents the 2015 Time RSUs granted in the first quarter of 2015. All such grants were made pursuant to the 2013 Plan. Details regarding vesting parameters generally applicable to these RSUs are provided above in “–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs” in this “VII. Executive Compensation.” The aggregate compensation cost calculated in accordance with ASC 718 for the 2015 Time RSUs granted to the NEOs is included above in the Stock Awards column of the table at “–Summary Compensation Table” in this “VII. Executive Compensation.” |
| |
(d) | Represents the grant date fair value of the 2015 Performance RSUs and 2015 Time RSUs granted to the NEOs in 2015 calculated in accordance with ASC 718, the aggregate of which is included above in the Stock Awards column of the table at “Summary Compensation Table” in this “VII. Executive Compensation.” Generally, the grant date fair value is the amount we would expense in our financial statements over the RSU’s vesting schedule. For information on the valuation assumptions utilized for accounting purposes; see notes 2 and 13 to the consolidated financial statements in our 2015 Form 10-K. A description of the vesting parameters that are generally applicable to the 2015 Performance RSUs and 2015 Time RSUs granted to the NEOs as a component of long-term equity-based compensation is provided above at “–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs” in this “VII. Executive Compensation.” |
(a)Represents the estimated payouts that the NEOs could earn under the AIP as described in the CD&A above. The Annual Incentive opportunities for each NEO, calculated as a percentage of the NEO's base salary, are provided above in "–CD&A–Elements of Executive Compensation and Benefits–Short Term Incentives–Annual Incentive Opportunity." The actual Annual Incentives paid to each NEO under the AIP are disclosed above in the "Non-Equity Incentive Plan Compensation" column of the table at "–Summary Compensation Table" in this "VIII. Executive Compensation."
(b)The grant listed for each NEO represents the Performance RSU component of the 2021 Annual RSUs. All such grants were made pursuant to the 2013 LTIP. Details regarding vesting parameters generally applicable to these RSUs are provided above in "–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs" in this "VIII. Executive Compensation."
(c)The grant listed for each NEO represents the Time RSU component of the 2021 Annual RSUs. All such grants were made pursuant to the 2013 LTIP. Details regarding vesting parameters generally applicable to these RSUs are provided above in "–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs" in this "VIII. Executive Compensation."
(d)Represents the grant date fair value of the RSUs granted to the NEOs in 2021 calculated in accordance with ASC 718, the aggregate of which is included above in the Stock Awards column of the table at "Summary Compensation Table" in this "VIII. Executive Compensation." Generally, the grant date fair value is the amount we would expense in our financial statements over the award's vesting schedule. For information on the valuation assumptions utilized for accounting purposes, see notes 2 and 11 to the consolidated financial statements in our 2021 Form 10-K.
(e)The grant listed for each NEO represents the Relative TSR Performance RSUs.
(f)The grant listed for each NEO represents the Absolute TSR Performance RSUs.
|
| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
60
41
Outstanding Equity Awards at 20152021 Fiscal Year-End
The following table and footnotes related thereto provide information regarding each stock option and other equity-based awards outstanding as of December 31, 20152021 for each NEO. As of December 31, 20152021 and the Record Date, none of the NEOs had any outstanding stock options.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Stock Awards |
Name | | Grant Date | | Number of Shares or Units of Stock That Have Not Vested (#)(a) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(b) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(c) | | Equity Incentive Awards: Market or Payout Plan Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(d) |
| | | | | | | | | | |
Jay A. Brown | | 2/21/2019 | | 8,602 | (e) | 1,795,581 | | — | | — |
| | 2/21/2019 | | — | | — | | 27,618 | (f) | 5,764,981 |
| | 2/21/2019 | | — | | — | | 49,043 | (g) | 10,237,236 |
| | 2/20/2020 | | 13,274 | (e) | 2,770,815 | | — | | — |
| | 2/20/2020 | | — | | — | | 24,680 | (h) | 5,151,703 |
| | 2/20/2020 | | — | | — | | 47,875 | (i) | 9,993,428 |
| | 2/19/2021 | | 21,224 | (e) | 4,430,298 | | — | | — |
| | 2/19/2021 | | — | | — | | 21,497 | (h) | 4,487,284 |
| | 2/19/2021 | | — | | — | | 32,970 | (i) | 6,882,158 |
| | | | | | | | | | |
Daniel K. Schlanger | | 2/21/2019 | | 2,688 | (e) | 561,093 | | — | | — |
| | 2/21/2019 | | — | | — | | 8,630 | (f) | 1,801,426 |
| | 2/21/2019 | | — | | — | | 15,326 | (g) | 3,199,149 |
| | 2/20/2020 | | 4,052 | (e) | 845,814 | | — | | — |
| | 2/20/2020 | | — | | — | | 7,534 | (h) | 1,572,647 |
| | 2/20/2020 | | — | | — | | 14,614 | (i) | 3,050,526 |
| | 2/19/2021 | | 6,579 | (e) | 1,373,300 | | — | | — |
| | 2/19/2021 | | — | | — | | 6,664 | (h) | 1,391,043 |
| | 2/19/2021 | | — | | — | | 10,220 | (i) | 2,133,323 |
| | | | | | | | | | |
Michael J. Kavanagh | | 2/21/2019 | | 1,808 | (e) | 377,402 | | — | | — |
| | 2/21/2019 | | — | | — | | 5,806 | (f) | 1,211,944 |
| | 2/21/2019 | | — | | — | | 10,310 | (g) | 2,152,109 |
| | 2/20/2020 | | 2,725 | (e) | 568,817 | | — | | — |
| | 2/20/2020 | | — | | — | | 5,066 | (h) | 1,057,477 |
| | 2/20/2020 | | — | | — | | 9,826 | (i) | 2,051,079 |
| | 2/19/2021 | | 5,942 | (e) | 1,240,333 | | — | | — |
| | 2/19/2021 | | — | | — | | 6,019 | (h) | 1,256,406 |
| | 2/19/2021 | | — | | — | | 9,231 | (i) | 1,926,879 |
| | | | | | | | | | |
Kenneth J. Simon | | 2/21/2019 | | 2,248 | (e) | 469,248 | | — | | — |
| | 2/21/2019 | | — | | — | | 7,218 | (f) | 1,506,685 |
| | 2/21/2019 | | — | | — | | 12,818 | (g) | 2,675,629 |
| | 2/20/2020 | | 3,214 | (e) | 670,890 | | — | | — |
| | 2/20/2020 | | — | | — | | 5,975 | (h) | 1,247,222 |
| | 2/20/2020 | | — | | — | | 11,590 | (i) | 2,419,297 |
| | 2/19/2021 | | 5,093 | (e) | 1,063,113 | | — | | — |
| | 2/19/2021 | | — | | — | | 5,159 | (h) | 1,076,890 |
| | 2/19/2021 | | — | | — | | 7,912 | (i) | 1,651,551 |
|
| | | | | | | | | | | | | | |
| | Stock Awards |
Name | | Number of Shares or Units of Stock That Have Not Vested (#)(a) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(b) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(c) | | Equity Incentive Awards: Market or Payout Plan Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(d) |
W. Benjamin Moreland | | 8,386 |
| | $ | 724,970 |
| | — |
| | $ | — |
|
| | — |
| | — |
| | 109,510 |
| | 9,467,140 |
|
| | 16,796 |
| | 1,452,014 |
| | — |
| | — |
|
| | — |
| | — |
| | 88,459 |
| | 7,647,281 |
|
| | 25,773 |
| | 2,228,076 |
| | — |
| | — |
|
| | — |
| | — |
| | 89,063 |
| | 7,699,496 |
|
| | | | | | | | |
Jay A. Brown | | 3,365 |
| | 290,904 |
| | — |
| | — |
|
| | — |
| | — |
| | 43,938 |
| | 3,798,440 |
|
| | 6,404 |
| | 553,626 |
| | — |
| | — |
|
| | — |
| | — |
| | 33,728 |
| | 2,915,786 |
|
| | 9,394 |
| | 812,111 |
| | — |
| | — |
|
| | — |
| | — |
| | 32,461 |
| | 2,806,253 |
|
| | | | | | | | |
James D. Young | | 3,348 |
| | 289,435 |
| | — |
| | — |
|
| | — |
| | — |
| | 43,715 |
| | 3,779,162 |
|
| | 6,372 |
| | 550,859 |
| | — |
| | — |
|
| | — |
| | — |
| | 33,557 |
| | 2,901,003 |
|
| | 9,348 |
| | 808,135 |
| | — |
| | — |
|
| | — |
| | — |
| | 32,301 |
| | 2,792,421 |
|
| | | | | | | | |
E. Blake Hawk | | 2,262 |
| | 195,550 |
| | — |
| | — |
|
| | — |
| | — |
| | 29,535 |
| | 2,553,301 |
|
| | 4,845 |
| | 418,850 |
| | — |
| | — |
|
| | — |
| | — |
| | 25,517 |
| | 2,205,945 |
|
| | 7,691 |
| | 664,887 |
| | — |
| | — |
|
| | — |
| | — |
| | 26,575 |
| | 2,297,409 |
|
| | | | | | | | |
Patrick Slowey | | 1,659 |
| | 143,421 |
| | — |
| | — |
|
| | — |
| | — |
| | 21,666 |
| | 1,873,026 |
|
| | 3,238 |
| | 279,925 |
| | — |
| | — |
|
| | — |
| | — |
| | 17,051 |
| | 1,474,059 |
|
| | 4,506 |
| | 389,544 |
| | — |
| | — |
|
| | — |
| | — |
| | 15,572 |
| | 1,346,199 |
|
| |
(a) | Represents the outstanding and unvested portion of certain Time RSA and Time RSU grants. The three grants listed for each NEO represent the 2013 Time RSAs, 2014 Time RSUs and 2015 Time RSUs, respectively. |
| |
(b) | Represents the market value of the outstanding RSAs and RSUs described in footnote (a) above that have not yet vested, based on the closing Common Stock price as of December 31, 2015 of $86.45 per share. |
| |
(c) | Represents the outstanding and unvested portion of certain Performance RSAs and Performance RSUs. The three grants listed for each NEO represent the maximum number of shares that may be earned under the 2013 Performance RSAs, 2014 Performance RSUs, and 2015 Performance RSUs, respectively, if the Highest Average Price achieved is $103.42 or above for the 2013 Performance RSAs and if the TSR Rank is at or above the 90th percentile for the 2014 Performance RSUs and the 2015 Performance RSUs. With regard to the 2013 Performance RSAs,
|
|
| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
61
42
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Stock Awards |
Name | | Grant Date | | Number of Shares or Units of Stock That Have Not Vested (#)(a) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(b) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)(c) | | Equity Incentive Awards: Market or Payout Plan Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(d) |
| | | | | | | | | | |
Christopher D. Levendos | | 2/21/2019 | | 1,711 | (e) | 357,154 | | — | | — |
| | 2/21/2019 | | — | | — | | 5,492 | (f) | 1,146,400 |
| | 2/21/2019 | | — | | — | | 9,752 | (g) | 2,035,632 |
| | 2/20/2020 | | 2,520 | (e) | 526,025 | | — | | — |
| | 2/20/2020 | | — | | — | | 4,685 | (h) | 977,947 |
| | 2/20/2020 | | — | | — | | 9,088 | (i) | 1,897,029 |
| | 12/1/2020 | | 3,903 | (j) | 814,712 | | — | | — |
| | 2/19/2021 | | 5,306 | (e) | 1,107,574 | | — | | — |
| | 2/19/2021 | | — | | — | | 5,374 | (h) | 1,121,769 |
| | 2/19/2021 | | — | | — | | 8,242 | (i) | 1,720,435 |
| | | | | | | | | | |
Robert C. Ackerman | | 2/21/2019 | | 2,688 | (e) | 561,093 | | — | | — |
| | 2/21/2019 | | — | | — | | 8,630 | (f) | 1,801,426 |
| | 2/21/2019 | | — | | — | | 15,326 | (g) | 3,199,149 |
| | 2/20/2020 | | 4,052 | (e) | 845,814 | | — | | — |
| | 2/20/2020 | | — | | — | | 7,534 | (h) | 1,572,647 |
| | 2/20/2020 | | — | | — | | 14,614 | (i) | 3,050,526 |
| | 2/19/2021 | | 6,579 | (e) | 1,373,300 | | — | | — |
| | 2/19/2021 | | — | | — | | 6,664 | (h) | 1,391,043 |
| | 2/19/2021 | | — | | — | | 10,220 | (i) | 2,133,323 |
(a)Represents the Highest Average Price, as adjusted for dividends, was $91.40, which resulted inoutstanding and unvested portion of certain Time RSUs.
(b)Represents the vesting on February 19, 2016 of approximately 68.98% (or 171,319 shares in the aggregate for the NEOs)market value of the maximum amountoutstanding and unvested Time RSUs referenced in footnote (a) above, based on the closing Common Stock price as of December 31, 2021 of $208.74 per share.
(c)Represents outstanding and unvested Performance RSUs, based on the 2013 Performance RSAs originally granted to each NEO; the remainder (or 77,045 shares in the aggregate for the NEOs)target number of such original grant was forfeited.units granted. Details of the vesting parameters that are generally applicable to the 2015 Performance RSUs are discussed above at “–"–CD&A–Elements of Executive Compensation and Benefits–Long-Term Incentives–RSUs”RSUs" in this “VII."VIII. Executive Compensation,”Compensation."
(d)Represents the market value of the outstanding and unvested Performance RSUs referenced in footnote (c) above, based on the closing Common Stock price as of December 31, 2021 of $208.74 per share.
(e)Represents the outstanding and unvested Time RSU portion of the Annual RSUs granted to each of the NEOs.
(f)Represents the outstanding and unvested Relative TSR Performance RSUs granted to each of the NEOs in 2019. For such vesting parameters are generally similarshares, the TSR rank of our Common Stock against the constituent companies of the S&P 500 Index was at the approximate 68th percentile for the 2014three-year period ended December 31, 2021, which resulted in the vesting on February 19, 2022 of approximately 118.4% of the target number of units originally granted to each NEO.
(g)Represents the outstanding and unvested Absolute TSR Performance RSUs.RSUs granted to each of the NEOs in 2019. For such shares, the annualized TSR of our Common Stock for the three-year performance period ended December 31, 2021 was approximately 25.0%, which resulted in the vesting on February 19, 2022 of 150% of the target number of units originally granted to each NEO.
| |
(d) | Represents the market value of the outstanding Performance RSAs and Performance RSUs described in footnote (c) above that have not yet vested, based on the closing Common Stock price as of December 31, 2015 of $86.45 per share. |
(h)Represents the outstanding and unvested portion of the Relative TSR Performance RSUs granted to each of the NEOs in 2020 and 2021.
(i)Represents the outstanding and unvested portion of the Absolute TSR Performance RSUs granted to each of the NEOs in 2020 and 2021.
(j)Represents the outstanding and unvested portion of Promotion RSUs granted to Mr. Levendos in connection with his promotion to EVP & COO—Fiber in 2020.
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| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
62
43
Option Exercises and Stock Vested in 20152021
The following table provides the amount realized during 20152021 by each NEO upon the vesting of RSAs and RSUs. No options were exercised by any of the NEOs in 2015,2021, and as of December 31, 20152021 and the Record Date, none of the NEOs held any outstanding stock options.
| | | | | | | | | | | | | | |
| | Stock Awards (a) |
Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) |
Jay A. Brown | | 114,874 | | 18,942,723 |
Daniel K. Schlanger | | 38,662 | | 6,375,364 |
Michael J. Kavanagh | | 26,786 | | 4,417,011 |
Kenneth J. Simon | | 37,802 | | 6,233,550 |
Christopher D. Levendos | | 21,894 | | 3,658,549 |
Robert C. Ackerman | | 38,662 | | 6,375,364 |
|
| | | | | | |
| | Stock Awards (a) |
Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($) |
W. Benjamin Moreland | | 118,031 | | $ | 10,410,334 |
|
Jay A. Brown | | 47,765 | | 4,212,873 |
|
James D. Young | | 47,512 | | 4,190,558 |
|
E. Blake Hawk | | 30,033 | | 2,648,911 |
|
Patrick Slowey | | 27,090 | | 2,389,338 |
|
| | |
(a) | For Messrs. Moreland, Brown, Young, Hawk and Slowey, the amounts shown include (1) 100% of the 2012 Performance RSA grant, which vested during 2015 upon achieving the maximum per share price performance hurdle of $79.10 for 20 consecutive trading days (92,758 shares, 37,745 shares, 37,543 shares, 23,223 shares, and 21,816 shares, respectively), (2) 33.34% of the 2012 Time RSA grant, which vested during 2015 (8,491 shares, 3,455 shares, 3,437 shares, 2,126 shares, and 1,997 shares, respectively), (3) 33.33% of the 2013 Time RSA grant, which vested during 2015 (8,385 shares, 3,364 shares, 3,347 shares, 2,262 shares, and 1,659 shares, respectively), and (4) 33.33% of the 2014 Time RSU grant, which vested during 2015 (8,397 units, 3,201 units, 3,185 units, 2,422 units, and 1,618 units, respectively). The value realized on vesting is calculated using the closing market price of our Common Stock from the trading day immediately preceding the date of vesting, which was $88.20 per share. |
(a)For each NEO, the amounts shown include (1) 129.3% of the target number of units covered by the 2018 Relative TSR Performance RSU grant, which portion vested on February 19, 2021 upon the Committee's certification that the Company's TSR Rank for the three-year period ended on December 31, 2020 was at the approximate 76th percentile of the S&P 500 Index constituent companies (27,896 units, 9,504 units, 6,612 units, 9,504 units, 4,751 units and 9,504 units, respectively), (2) 150% of the target number of units covered by the 2018 Absolute TSR Performance RSU grant, which portion vested on February 19, 2021 upon the Committee's certification that the Company's annualized total stock return for the three-year period ended on December 31, 2020 exceeded the maximum TSR hurdle of 16.5% (64,366 units, 21,931 units, 15,256 units, 21,931 units, 10,965 units, 21,931 units, respectively), (3) 33.34% of the 2018 Time RSU grant, which portion vested during 2021 (7,374 units, 2,513 units, 1,748 units, 2,513 units,1,257 units and 2,513 units, respectively), (4) 33.33% of the 2019 Time RSU grant, which vested during 2021 (8,601 units, 2,688 units, 1,808 units, 2,248 units, 1,710 units and 2,688 units, respectively) and (5) 33.33% of the 2020 Time RSU grant, which vested during 2021 (6,637 units, 2,026 units, 1,362 units, 1,606 units,1,260 units and 2,026 units, respectively). In addition, the amounts for Mr. Levendos include approximately 33.33% of the Promotion RSUs awarded to him on December 1, 2020, which vested during 2021 (1,951 units). The value realized on vesting is calculated using the closing market price of our Common Stock from the trading day immediately preceding the date of vesting, which was $164.90 per unit for all grants, except in the case of the Promotion RSUs for Mr. Levendos, in which case such closing market price of our Common Stock was $189.62.
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| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
63
44
Potential Payments Upon Termination of Employment
Severance Agreements.Agreements
We have entered into Severance Agreements containing non-compete and non-solicitation provisions with each NEO (See "—Subsequent Amendmentsof our NEOs, which provide certain benefits to Severance Agreements" below for a summaryand impose certain obligations on our NEOs upon termination of certain amendments totheir employment with us. Details regarding the benefits provided under the NEOs' Severance Agreements approved byand the Committee in February 2016).
potential value thereof are set forth below. Pursuant to each Severance Agreement, we are required to provide severance benefits to the officerNEO if such officer’sNEO's employment is terminated pursuant to a Qualifying Termination (as defined in footnote (a) to the table below). The Severance Agreements provide for enhanced severance benefits if the officer’sNEO's employment is terminated in connection with a Qualifying Termination Upon Change in Control (as defined in footnote (a) to the table below).
Upon a Qualifying Termination occurring on December 31, 20152021 not during a changeChange in control period,Control Period (as defined in the executive officerSeverance Agreements), the NEOs would have been entitled to:to the following benefits:
•a lump sum severance payment equal to the sum of the officer’sofficer's base salary and Annual Bonus multiplied by two (for Messrs. Moreland and Hawk) or one (for all other NEOs covered by a Severance Agreement). For Messrs. Moreland and Hawk, Annual BonusBonus. "Annual Bonus" is defined for purposes of theeach NEO's Severance Agreement as 75%the target annual bonus for the calendar year in which the date of such officer’s base salary. For Messrs. Young and Slowey, Annual Bonus is defined for purposes of the Severance Agreement as 55% of such officer’s base salary. For Mr. Brown, Annual Bonus is defined for purposes of the Severance Agreement as 65% of base salary;termination occurs;
•a prorated cash amount equal to the officer’sofficer's Annual Bonus for the year ofin which termination occurs when and if annual incentives for the year of termination are paid to other executive officers;
•to the extent the annual incentive for the year prior to the year in which termination occurs has not been paid, a cash amount equal to the officer’sofficer's prior year actual annual incentive when and if any annual incentives for the year prior to the date of termination are paid to our other executive officers;
•continued coverage under specified health and welfare benefit programs for either two years (for Messrs. Moreland and Hawk) or one year (for all other NEOs covered by a Severance Agreement);year;
•continued participation in the 401(k) Plan for the calendar year of the date ofin which termination occurs, including our contributions based upon participation or matching (with payment of the after-tax economic equivalent if and to the extent such is not permitted under the 401(k) Plan or by applicable law); and
for Messrs. Moreland and Hawk, immediate vesting of all Restricted Stock Awards (as defined in the Severance Agreements), RSUs and stock options, other than Performance Awards (as defined in the Severance Agreements), which have the opportunity to continue to vest as if the officer remained an employee after the date of termination; and for all other NEOs covered by a Severance Agreement, •immediate vesting of all stock options and continued vesting of all Restricted Stock Awards (as defined in the Severance Agreements) (including RSUs)3 for two years after termination.
In connection with a Qualifying Termination Upon Change in Control occurring on December 31, 2021, the officer isNEOs would have been entitled to:to the following benefits:
•a lump sum severance payment equal to the sum of the officer’sofficer's base salary and Annual Bonus multiplied by three (for Messrs. Moreland and Hawk) or two (for all other NEOs covered by a Severance Agreement);two;
•a prorated cash amount equal to the officer’sofficer's Annual Bonus for the year ofin which termination occurs when and if annual incentives for the year of termination are paid to other executive officers;
•to the extent the annual incentive for the year prior to the year in which termination occurs has not been paid, a cash amount equal to the officer’sofficer's prior year actual annual incentive when and if any annual incentives for the year prior to the date of termination are paid to our other executive officers;
•continued coverage under specified health and welfare benefit programs for either three years (for Messrs. Moreland and Hawk) or two years (for all other NEOs covered by a Severance Agreement);years;
•continued participation in the 401(k) Plan for the calendar year of the date ofin which termination occurs, including our contributions based upon participation or matching (with payment of the after-tax economic equivalent if and to the extent such is not permitted under the 401(k) Plan or by applicable law); and
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| | |
CROWN CASTLE INTERNATIONAL CORP. | | PROXY STATEMENT |
45
•immediate vesting of any outstanding Restricted Stock Awards, (as defined in the Severance Agreements), RSUs and stock options held by the officer, provided that such immediate vesting only applies to Performance Awards (as defined in the Severance Agreements) with respect to the target shares or Target Level of performance, and the officer continues to vest as to any Performance Awards in excess of such target shares or Target Level of performance following the date of termination.
Each of the Severance Agreements also has provisions that generally prohibit the officer, for a period of 12 months following the termination of such officer’sofficer's employment with us, from (1) engaging in businesscertain competitive activities relating to wireless communication or broadcast towers which compete with us or our affiliates in the United States or Australiadesignated geographic areas and (2) soliciting our employees and our affiliates.
3Pursuant to the Severance Agreements, "Restricted Stock Awards" include restricted stock awards, phantom stock awards and other similar equity-based incentive compensation awards granted to the NEOs, excluding stock options.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
64
The following table and footnotes thereto summarize the alternative termination benefits that would be payable under different termination scenarios in accordance with each NEO’sNEO's Severance Agreement. The information provided assumes the NEO’sNEO's termination occurred as of December 31, 2015.2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Termination Type(a) | | Severance Amount($)(b) | | Early or Continued Vesting of RSUs($)(c) | | Other($)(d) | | Alternative Total Employment Termination Benefits($)(e) |
| | | | | | | | | | |
Jay A. Brown | | Qualifying Upon Change in Control | | 5,562,000 | | 54,094,480 | | 1,818,904 | | 61,475,384 |
| | Qualifying | | 2,781,000 | | 7,863,758 | | 1,795,102 | | 12,439,860 |
| | Non-Qualifying | | — | | — | | — | | — |
| | | | | | | | | | |
| | | | | | | | | | |
Daniel K. Schlanger | | Qualifying Upon Change in Control | | 2,440,000 | | 16,727,377 | | 676,530 | | 19,843,907 |
| | Qualifying | | 1,220,000 | | 2,428,715 | | 653,415 | | 4,302,130 |
| | Non-Qualifying | | — | | — | | — | | — |
| | | | | | | | | | |
| | | | | | | | | | |
Michael J. Kavanagh | | Qualifying Upon Change in Control | | 2,220,000 | | 12,409,428 | | 621,530 | | 15,250,958 |
| | Qualifying | | 1,110,000 | | 1,850,034 | | 598,415 | | 3,558,449 |
| | Non-Qualifying | | — | | — | | — | | — |
| | | | | | | | | | |
| | | | | | | | | | |
Kenneth J. Simon | | Qualifying Upon Change in Control | | 2,364,000 | | 13,429,073 | | 640,926 | | 16,433,999 |
| | Qualifying | | 1,182,000 | | 1,934,382 | | 626,113 | | 3,742,495 |
| | Non-Qualifying | | — | | — | | — | | — |
| | | | | | | | | | |
| | | | | | | | | | |
Christopher D. Levendos | | Qualifying Upon Change in Control | | 1,980,000 | | 12,257,509 | | 561,530 | | 14,799,039 |
| | Qualifying | | 990,000 | | 2,533,806 | | 538,415 | | 4,062,221 |
| | Non-Qualifying | | — | | — | | — | | — |
| | | | | | | | | | |
| | | | | | | | | | |
Robert C. Ackerman | | Qualifying Upon Change in Control | | 2,040,000 | | 16,727,377 | | 576,530 | | 19,343,907 |
| | Qualifying | | 1,020,000 | | 2,428,715 | | 553,415 | | 4,002,130 |
| | Non-Qualifying | | — | | — | | — | | — |
| | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | |
Name | | Termination Type(a) | | Severance Amount($)(b) | | Early or Continued Vesting of Restricted Stock($)(c) | | Other($)(d) | | Alternative Total Employment Termination Benefits($)(e) |
W. Benjamin Moreland | | Qualifying Upon Change in Control | | $ | 5,164,168 |
| | $ | 21,628,367 |
| | $ | 809,558 |
| | $ | 27,602,092 |
|
| | Qualifying | | 3,442,779 |
| | 11,109,200 |
| | 791,801 |
| | 15,343,779 |
|
| | Non-Qualifying | | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | |
Jay A. Brown | | Qualifying Upon Change in Control | | 1,723,960 |
| | 8,258,244 |
| | 393,628 |
| | 10,375,832 |
|
| | Qualifying | | 861,980 |
| | 4,060,349 |
| | 375,873 |
| | 5,298,202 |
|
| | Non-Qualifying | | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | |
James D. Young | | Qualifying Upon Change in Control | | 1,611,510 |
| | 8,216,891 |
| | 324,055 |
| | 10,152,456 |
|
| | Qualifying | | 805,755 |
| | 4,039,954 |
| | 314,259 |
| | 5,159,969 |
|
| | Non-Qualifying | | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | |
E. Blake Hawk | | Qualifying Upon Change in Control | | 2,526,059 |
| | 6,182,784 |
| | 425,268 |
| | 9,134,111 |
|
| | Qualifying | | 1,684,039 |
| | 3,091,521 |
| | 409,984 |
| | 5,185,545 |
|
| | Non-Qualifying | | — |
| | — |
| | — |
| | — |
|
| | | | | | | | | | |
Patrick Slowey | | Qualifying Upon Change in Control | | 1,398,373 |
| | 4,067,650 |
| | 302,046 |
| | 5,768,069 |
|
| | Qualifying | | 699,186 |
| | 2,001,970 |
| | 284,347 |
| | 2,985,504 |
|
| | Non-Qualifying | | — |
| | — |
| | — |
| | — |
|
| | |
(a) | Represents the various employment termination scenarios as defined in the NEO’s Severance Agreements. Generally, each of the scenarios can be described as follows: |
The Audit Committee has adopted procedures regarding the pre-approval of certain services which may be rendered by our Auditors. Such procedures provide that the Audit Committee should pre-approve audit and permitted non-audit services to be rendered by our Auditors. Such approval of services may be made with respect to audit, audit-related, tax and other services permitted under SEC rules that the Audit Committee believes would not otherwise impair the independence of the Auditors. Whenever practicable, estimated or budgeted fees should be pre-approved at the time the services are pre-approved. Such procedures also provide that between the regularly scheduled meetings of the Audit Committee, each member of the Audit Committee (with preference given to the ChairmanChair of the Audit Committee, if available) is authorized to pre-approve fees or engagements presented by an officer relating to audit and permitted non-audit related services of our independent registered public accountants; provided, however, the Audit Committee members in the aggregate may not approve fees and engagements exceeding $200,000 of fees, excluding any fees or engagements (1) approved by the Audit Committee or (2) regarding services relating to securities offerings of the Company and its subsidiaries (“("Delegation Procedures”Procedures"). At the regularly scheduled meetings of the Audit Committee, the Audit Committee is generally provided a schedule detailing any services which have been approved or utilized during the fiscal year and since the last regularly scheduled Audit Committee meeting, including any fees and engagements approved pursuant to the Delegation Procedures.
In addition, in accordance with regulations promulgated by the SEC, the Audit Committee has issued the following report.
The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’sPwC's communications with the Audit Committee concerning independence, and has discussed with PwC its independence.
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| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
67
48
•Based on its review of CCIC’sthe Company's audited financial statements and the discussions with management and PwC referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in CCIC’s Annual Report onthe 2021 Form 10-K for the year ended December 31, 2015.10-K.
Respectfully submitted by the Audit Committee of the Board of Directors of CCIC.Board.
AUDIT COMMITTEE
Robert E. Garrison II
Anthony J. Melone (Chair)
Kevin A. Stephens
Lee W. Hogan
P. Robert Bartolo
Lee W. HoganTammy K. Jones
Robert F. McKenzie
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
68
49
IX.X. OTHER MATTERS
Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC and the NYSE reports of ownership and changes in ownership of Common Stock and our other equity securities. Executive officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
Based solely on the review of copies of such reports furnished to usfiled with the SEC and written representations that no other reports were required, we believe that, during the 20152021 fiscal year, our executive officers, directors and greater than 10% beneficial owners timely complied with all Section 16(a) filing requirements applicable to them, except that each of Messrs. Brown, Fisher, Hawk, Kelley, Moreland, Slowey and Young filedMr. Levendos did not timely file one late report with respect to two transactions.one transaction.
Stockholder Recommendation of Director Candidates
Stockholders may recommend potential candidates for consideration by the NCGNESG Committee by sending a written request to our Corporate Secretary. The written request must include the candidate’scandidate's name, contact information, biographical information and qualifications. The request must also include the potential candidate’scandidate's written consent to being named in the proxy statement as a nominee and to serving as a director if nominated and elected. The stockholder or group of stockholders making the recommendation must also disclose, with the written request, the number of securities that the stockholder or group of stockholders beneficially owns and the period of time the stockholder or group of stockholders has beneficially owned the securities. Additional information may be requested from the nominee or the stockholder by the NCGNESG Committee from time to time. As and if determined by the NCGNESG Committee, potential candidates must also make themselves available to be interviewed by the NCGNESG Committee, the Board and members of our executive management.
The NCGNESG Committee reserves the right not to have any communications with the recommending stockholder or the candidate regarding the evaluation process of the candidate or the NCG Committee’sNESG Committee's conclusions regarding such evaluation.
Stockholder Nominations and Proposals for 20172023 Annual Meeting
Proposals for Inclusion in our Proxy Statement
Stockholders wishing to have a proposal includedconsidered for inclusion in the Board’s 2017our 2023 proxy statement pursuant to Exchange Act Rule 14a-8 must submit the proposal so that our Corporate Secretary receives it at our principal executive offices located at Crown Castle International Corp., 8020 Katy Freeway, Houston, Texas 77024, Attn: Corporate Secretary no later than December 5, 2016.2022. If the date of the 20172023 Annual Meeting of Stockholders is changed by more than 30 days from the date of the 20162022 Annual Meeting, the deadline for submitting proposals to be included in the Board’s 2017our 2023 proxy statement will be a reasonable time before we begin to print and mail our proxy materials for our 20162023 Annual Meeting.
Stockholders wishing to have one or more director nominations considered for inclusion in our 2023 proxy statement pursuant to the proxy access right included in Section 2.10 of our By-Laws must submit written notice of the nomination or nominations, together with other information required by Section 2.10 and otherwise comply with the requirements of our By-Laws, so that our Corporate Secretary receives it at our principal executive offices no later than December 5, 2022 and not earlier than November 5, 2022. If the 2023 Annual Meeting is not held, or is advanced by more than 30 days, or is delayed by more than 90 days, from May 19, 2023 (the first anniversary date of the 2022 Annual Meeting), the nomination must be received by the Corporate Secretary not earlier than the 120th day prior to the 2023 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 2023 Annual Meeting or the 10th day following the announcement of the 2023 Annual Meeting date. A copy of the applicable By-Laws provision may be obtained, without charge, upon written request to our Corporate Secretary.
Other Proposals to be Presented at the 2023 Annual Meeting (not for Inclusion in our Proxy Statement)
Stockholders may make nominations for directors and introduce proposals or other business to be considered at the 20172023 Annual Meeting (but not included in our 2023 proxy statement) provided such nominations and proposals are in accordance with Section 2.07 of our By-Laws and involve proper matters for stockholder action.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
69
Such stockholder nominations and proposals and other business for the 20172023 Annual Meeting must be receiveddelivered not less than 90 days (February 18, 2017)2023) nor more than 120 days (January 19, 2017)2023) before May 19, 20172023 (the first anniversary date of the 20162022 Annual Meeting) to our Corporate Secretary at our principal executive offices located at Crown Castle International Corp., 1220 Augusta Drive, Suite 600,8020 Katy Freeway, Houston, TX 77057,Texas 77024, Attn: Corporate Secretary. If the 20172023 Annual Meeting is advanced by more than 30 days, or delayed by more than 90 days, from the first anniversary date of the 20162022 Annual Meeting, notice of the nomination or proposal must be delivered not earlier than the 120th day prior to the 20172023 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 20172023 Annual Meeting or the 10th day following the announcement of the change in the 20172023 Annual Meeting date. The notice of nominations for the election of directors must set forth certain information concerning the stockholder giving the notice and each nominee. A copy of the applicable By-Laws provision may be obtained, without charge, upon written request to our Corporate Secretary.
In addition to satisfying the foregoing advance notice requirements under our By-Laws, to comply with the universal proxy rules (once effective), stockholders wishing to solicit proxies in support of director nominees other than the Company's nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 18, 2023 and no earlier than January 19, 2023.
If the date of the 20172023 Annual Meeting is advanced or delayed by more than 30 calendar days from the datefirst anniversary of the 20162022 Annual Meeting, we shall, in a timely manner, inform stockholders of such change, by including a notice, under Item 5, in our earliest possible quarterly report on Form 10-Q.10-Q or current report on Form 8-K. The notice will include the new deadline for submitting proposals to be included in the Board’s 2017our 2023 proxy statement and the new date for determining whether we have received timely notice of a nomination or proposal.
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| | |
CROWN CASTLE INTERNATIONAL CORP. | | PROXY STATEMENT |
50
Expenses Relating to this Proxy Solicitation
We will pay all expenses relating to this proxy solicitation. In addition to this solicitation by mail, our officers, directors and employees may solicit proxies by telephone or personal call without extra compensation for that activity. We also expect to reimburse banks, brokers and other persons for reasonable out-of-pocket expenses in forwarding proxy material to, and obtaining voting instructions from, beneficial owners of our stock.
Available Information
We maintain an Interneta website at www.crowncastle.comcrowncastle.com. Copies of the Committee charters of each of the Audit Committee, Compensation Committee and the NCGNESG Committee, together with certain other corporate governance materials, including our Financial Code of Ethics, Corporate Governance Guidelines and Business Practices and Ethics Policy, can be found under the Investor RelationsInvestors section of our website at http://www.crowncastle.com/investor/corpgovernance.aspcrowncastle.com/investors/corporate-governance, and such information is also available in print to any stockholder who requests it through our Corporate Secretary at the address below.
We will furnish without charge to each person whose proxy is being solicited, upon request of any such person, a copy of the 20152021 Form 10-K as filed with the SEC, including the financial statements and schedules thereto, but not the exhibits. In addition, such reportthe 2021 Form 10-K is available, free of charge, through the investor relations section ofon our Internet website at http://www.crowncastle.com/investor/10K/CrownCastle2015-10k.pdf.crowncastle.com/investors/current10k.pdf. A request for a copy of such reportthe 2021 Form 10-K should be directed to Crown Castle International Corp., 1220 Augusta Drive, Suite 600,8020 Katy Freeway, Houston, Texas 77057, Attention:77024, Attn: Corporate Secretary. A copy of any exhibit to the 20152021 Form 10-K will be forwarded following receipt of a written request with respect thereto addressed to the Corporate Secretary.
Householding of Proxy Materials
In order to reduce expenses, we are taking advantage of certain SEC rules, commonly known as “householding,”"householding," that permit us to deliver, in certain cases, only one Proxy Materials Notice, 20152021 Form 10-K or Proxy Statement, as applicable, to multiple stockholders sharing the same address, unless we have received contrary instructions from one or more of the stockholders. If you received a householded mailing this year and would like to have additional copies of the Proxy Materials Notice, 20152021 Form 10-K or other proxy materials sent to you, or if you would like to revoke your consent to the householding of documents in the future, please call 1-800-542-10611-866-540-7095 or write to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NYNew York 11717.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
70
Stockholder Communications
The Board welcomes communications from our stockholders and other interested parties. Stockholders and other interested parties may send communications to the Board, to any Committee, to the non-management Directors or to any Director in particular, to: Crown Castle International Corp., 1220 Augusta Drive, Suite 600,8020 Katy Freeway, Houston, Texas 77057,77024, Attn: Corporate Secretary.
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| | | | | | | |
CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
71
51
Appendix A
CROWN CASTLE INTERNATIONAL CORP.
2022 LONG-TERM INCENTIVE PLAN
I. PURPOSE
The purpose of the CROWN CASTLE INTERNATIONAL CORP. 2022 LONG-TERM INCENTIVE PLAN (“Plan”) is to provide a means through which CROWN CASTLE INTERNATIONAL CORP., a Delaware corporation (“Company”), and its Affiliates may attract able persons to enter the employ or to serve as Directors or Consultants of the Company and its Affiliates and to provide a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributions to the Company and its Affiliates are of importance, can acquire and maintain stock ownership, thereby strengthening their concern for the welfare of the Company and its Affiliates. A further purpose of the Plan is to provide such individuals with additional incentive and reward opportunities designed to enhance the profitable growth of the Company and its Affiliates. Accordingly, the Plan provides for granting Incentive Stock Options, Options that do not constitute Incentive Stock Options, Restricted Stock Awards, Performance Awards, Stock Appreciation Rights, Phantom Stock Awards, Stock Awards, Restricted Stock Unit Awards, or any combination of the foregoing, as is best suited to the circumstances of the particular employee, Consultant, or Director as provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless specifically modified by any provision of the Plan:
a.“Affiliate” means any entity which, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity, or (ii) to direct or cause the direction of the management and policies of the controlled entity, whether through the ownership of voting securities or by contract or otherwise.
b.“Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Performance Award, Phantom Stock Award, Stock Award or Restricted Stock Unit Award granted under the Plan.
c.“Award Agreement” means an agreement between the Company and a Participant evidencing an Award and its terms. Each Award Agreement shall designate (i) the type of Award being issued; (ii) the vesting conditions or forfeiture provisions applicable to the Award, including any applicable Performance Goals or provisions constituting a Substantial Risk of Forfeiture; (iii) transferability restrictions; (iv) any applicable rules regarding delivery of Shares under the Award; (v) subject to Section V(g) below, and to the extent applicable, provisions regarding payments of dividends or Dividend Equivalents; and (vi) any additional matters as the Committee may determine to be appropriate. The terms and provisions of each Award Agreement need not be identical. Except as otherwise provided in the Plan, subject to the consent of the Participant, the Committee may, in its sole discretion, amend an outstanding Award Agreement from time to time in any manner that is not inconsistent with the provisions of the Plan.
d.“Board” means the Board of Directors of the Company.
e.“Change of Control Value”means the amount determined in clause (i), (ii) or (iii), whichever is applicable, as follows:
i.the per Share price offered to stockholders of the Company in a Corporate Change which is a merger, consolidation, sale of assets or dissolution transaction;
ii.the price per Share offered to stockholders of the Company in any tender offer or exchange offer whereby a Corporate Change takes place; or
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 1
iii.if a Corporate Change occurs other than pursuant to a tender or exchange offer and an Award will be cancelled by or surrendered to the Committee as a result of such transaction, the Fair Market Value per share of the Shares underlying such Award, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Award.
In the event that the consideration offered to stockholders of the Company in any transaction which results in a Corporate Change consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash.
f.“Code” means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any regulations issued by the Department of Treasury under such section.
g.“Committee” means a committee of the Board that is selected by the Board as provided in Section IV(a).
h.“Common Stock” means the common stock, par value $.01 per share, of the Company, or any security into which such Common Stock may be changed by reason of any transaction or event of the type described in Section XIII.
i.“Company” means Crown Castle International Corp., a Delaware corporation.
j.“Consultant” means any person who is not an employee or a Director and who is providing advisory or consulting services to the Company or any Affiliate.
k.“Corporate Change” means a transaction or event in which:
i.the Company is not the surviving entity in any merger or consolidation or other reorganization (or survives only as a subsidiary of an entity other than an entity that was directly or indirectly wholly owned by the Company immediately prior to such merger, consolidation or other reorganization);
ii.the Company sells, leases or exchanges all or substantially all of its assets to any other person (other than an entity that is directly or indirectly wholly owned by the Company);
iii.the Company is to be dissolved;
iv.any person, including a “group” as contemplated by Section 13(d)(3) of the 1934 Act, acquires or gains ownership or control (including, power to vote) of more than 50 percent of the outstanding shares of the Company’s voting stock (based on voting power);
v.as a result of or in connection with a contested election of Directors, the persons who were Directors of the Company before such election shall cease to constitute a majority of the Board; or
vi.the Company is party to any other corporate transaction (as defined under section 424(a) of the Code and applicable Department of Treasury regulations) that is not described in clauses (i), (ii), (iii), (iv) or (v) above.
l.“Director” means an individual elected or appointed to the Board by the stockholders of the Company or by the Board under applicable corporate law.
m.“Disability” means as determined by the Committee in its discretion exercised in good faith,
i.in the case of an Award (other than an Incentive Stock Option) that is exempt from the application of the requirements of Section 409A, a physical or mental condition of the Holder that would entitle the Holder to payment of disability income payments under the Company’s long-term disability insurance policy or plan for employees as then in effect, or in the event that the Holder is a Director or is not covered (for whatever reason) under the Company’s long-term disability insurance policy or plan for employees or in the event the Company does not maintain
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 2
such a long-term disability insurance policy, and in the case of an Incentive Stock Option, “Disability” means a permanent and total disability as defined in section 22(e)(3) of the Code; and
ii.in the case of an Award that is not exempt from the application of the requirements of Section 409A, (1) the Holder is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (2) the Holder is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.
A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Holder shall submit to an examination by such physician upon request by the Committee.
n.“Dividend Equivalent”means a payment equivalent in amount to dividends paid to the Company’s stockholders.
o.“Employee” means any individual in an employment relationship with the Company or any Affiliate. Directors who are Employees shall be considered Employees under the Plan.
p.“Entity”means a corporation, limited liability company, partnership, limited partnership or any other type of legal entity or organization.
q.“Fair Market Value” on any date means the market price of Common Stock, determined by the Committee as follows:
i.if the Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation the New York Stock Exchange, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Committee) on the date of determination (or, if no closing sales price or closing bid was reported on that date on the last trading date such closing sales price or closing bid was reported), as reported by The Wall Street Journal (including through www.wsj.com) or such other source as the Committee deems reliable;
ii.if the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported by The Wall Street Journal (including through www.wsj.com) or such other source as the Committee deems reliable; or
iii.in the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value thereof shall be determined by the Committee in good faith.
The Committee’s determination of Fair Market Value shall be conclusive and binding on all persons.
r.“Forfeiture Restrictions”shall have the meaning assigned to such term in Section VIII(a).
s.“Holder”means the holder of an Award.
t.“Immediate Family” means, with respect to a Participant, the Participant’s spouse, children or grandchildren (including adopted children, stepchildren and grandchildren).
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 3
u.“Incentive Stock Option” means an incentive stock option within the meaning of section 422 of the Code.
v.“1934 Act” means the Securities Exchange Act of 1934, as amended.
w.“Mature Shares” means Shares which have been held by the Holder and with respect to which any applicable forfeiture restrictions have lapsed, in each case, for at least six months.
x.“Option” means an Award (other than a SAR) granted under Section VII and includes both Incentive Stock Options to purchase Common Stock and Options that do not constitute Incentive Stock Options to purchase Common Stock.
y.“Participant” means an employee, Consultant, or Director who has been granted an Award.
z.“Performance Award” means an Award granted under Section IX.
aa.“Performance Goals” means the criteria the Committee selects for purposes of calculating payment under a Performance Award. The Performance Goals shall be designated by the Committee in its sole discretion and may be based on (i) one or more business criteria that apply to the Holder, (ii) one or more business units of the Company, or (iii) the Company as a whole, and may reference to one or more of the following: stock price (including adjustments for dividends), funds from operations, adjusted funds from operations, earnings or adjusted earnings before or after interest, taxes, depletion, depreciation or amortization, earnings per share, earnings per share growth, total stockholder return, economic value added, cash return on capitalization, increased revenue, revenue ratios (per employee or per customer), net income (before or after taxes), market share, return on equity, return on assets, return on capital, return on capital compared to cost of capital, return on capital employed, return on invested capital, return on investment, return on sales, operating or profit margins, stockholder value, net cash flow, operating income, cash flow, cash flow from operations, cost reductions or cost savings, cost ratios (per employee or per customer), expense control, sales, proceeds from dispositions, project completion time, budget goals, net cash flow before financing activities, customer growth, total capitalization, debt to total capitalization ratio, credit quality or debt ratings, dividend payout, dividend growth, production volumes or safety results, or such other events or matters as the Committee determines appropriate in its sole discretion. Performance Goals may also be based on performance relative to a peer group or index of companies. Unless otherwise stated, such a Performance Goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). The Committee, in its discretion, may adjust or modify the calculation of Performance Goals for each performance period in order to prevent the dilution or enlargement of the rights of Participants (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development; (ii) in the event of, or in connection with, any acquisition or divestiture of a portion of the Company’s business or operations; or (iii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.
bb. “Person” means an individual or entity.
cc. “Phantom Stock Award” means an Award granted under Section X.
dd. “Plan” means the Crown Castle International Corp. 2022 Long-Term Incentive Plan, as amended from time to time.
ee. “Restricted Stock Award” means an Award granted under Section VIII.
ff. “Restricted Stock Unit Award”or“RSU Award”means an Award granted under Section XII.
gg. “Rule 16b-3” means SEC Rule 16b-3 promulgated under the 1934 Act, as such may be amended from time to time, and any successor rule, regulation or statute fulfilling the same or a similar function.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 4
hh. “Section 409A”means section 409A of the Code and other guidance promulgated by the Internal Revenue Service under Section 409A.
ii. “Share”means a share of Common Stock.
jj. “Stock Appreciation Right” or “SAR”means a stock appreciation right granted pursuant to Section VII.
kk. “Stock Award”means an award granted pursuant to Section XI.
ll. “Substantial Risk of Forfeiture” shall have the meaning ascribed to that term in Section 409A.
III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective upon the date approved by the stockholders of the Company (the “Effective Date”), and no Award shall be granted under the Plan prior to such date. No Awards may be granted under the Plan after ten years from the Effective Date. The Plan shall remain in effect until all Options granted under the Plan have been exercised or expired, all Restricted Stock Awards granted under the Plan have vested or been forfeited, and all Performance Awards, Phantom Stock Awards and RSU Awards have been satisfied or expired.
IV. ADMINISTRATION
a.Composition of Committee. The Plan shall be administered by a committee of, and appointed by, the Board that shall be comprised solely of two or more outside Directors (within the meaning of the term “Non-Employee Director” as defined in Rule 16b-3). Unless otherwise provided by the Board, the Committee shall be the Compensation Committee of the Board.
b.Powers. Subject to the terms and provisions of the Plan, the Committee, at any time, and from time to time, may grant Awards under the Plan to eligible persons in such amounts and upon such terms as the Committee shall determine. Subject to the express provisions of the Plan, the Committee shall have authority, in its discretion, to determine which employees, Consultants or Directors shall receive an Award, the time or times when such Award shall be made, the type of Award that shall be made, the number of Shares to be subject to each Option, SAR, Stock Award or Restricted Stock Award, and the number of Shares subject to or the value of each Performance Award, RSU Award or Phantom Stock Award. In making such determinations, the Committee shall take into account the nature of the services rendered by the respective employees, Consultants, or Directors, their present and potential contribution to the Company’s success and such other factors as the Committee in its sole discretion shall deem relevant.
c.Additional Powers. The Committee shall have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, this shall include the power to construe the Plan and the respective agreements executed hereunder, to prescribe rules and regulations relating to the Plan, and to determine the terms, restrictions and provisions of each Award Agreement, including such terms, restrictions and provisions as shall be requisite in the judgment of the Committee to cause designated Options to qualify as Incentive Stock Options, and to make all other determinations necessary or advisable for administering the Plan. The Committee may specify in any Award Agreement the effect under the applicable Award of the occurrence of the death, Disability or retirement of the Participant, or the change of control of the Company. The Committee may, in its discretion and as of a date determined by the Committee, fully vest any Award, in whole or in part. The Committee may rely on the descriptions, representations, reports and estimates provided to it by the management of the Company or an Affiliate for determinations to be made pursuant to the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award Agreement in the manner and to the extent it shall deem expedient to carry it into effect. The determinations of the Committee on the matters referred to in this Section IV shall be conclusive.
d.Delegation of Authority. The Committee in its sole discretion and on such terms and conditions as it may provide may delegate all or any part of its authority and powers under the Plan to one or more members of the Board and/or officers of the Company; provided, however, that the Committee may not
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delegate its authority or power with respect to (i) the selection for participation in this Plan of an officer or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an Award to such an officer or person; or (ii) any Awards to a Director.
V. SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF AWARDS
a.Number of Shares Available for Awards. Subject to adjustment as provided in Section XIII, the aggregate number of Shares that may be issued under the Plan shall be equal to the sum of (i) 10,500,000 Shares, (ii) the number of shares remaining for issuance under the Crown Castle International Corp. 2013 Long-Term Incentive Plan on the Effective Date, and (iii) any shares issued under the Crown Castle International Corp. 2013 Long-Term Incentive Plan that are the subject of an award under that plan on the Effective Date and thereafter are forfeited or terminated, expire unexercised, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares of Common Stock covered by such award are not issued to the award holder, or are exchanged for an awards that does not involve shares of Common Stock (provided, however, for purposes of this clause (iii) any shares that are withheld from payment of an award to satisfy tax obligations shall be treated as issued). The Shares that are available for issuance under the Plan may be issued in any form of Award authorized under the Plan. Any Shares that are the subject of Awards under the Plan which are forfeited or terminated, expire unexercised, are settled in cash in lieu of Shares or in a manner such that all or some of the Shares covered by an Award are not issued to a Participant (including, but not limited to, Shares withheld to satisfy tax obligations on any Award other than an Option or an SAR), or are exchanged for Awards that do not involve Shares, shall again immediately become available to be issued pursuant to Awards granted under the Plan. If Shares are withheld to satisfy tax obligations with respect to an Option or an SAR, such Shares shall not again be available for issuance under the Plan. If Shares are tendered in payment of an option price of an Option or the exercise price of a SAR, such Shares shall not be available for issuance under the Plan.
b.Incentive Stock Option Award Limit. The aggregate number of Shares with respect to which Incentive Stock Options may be granted under the Plan is 1,000,000 Shares. This amount shall be subject to adjustment in accordance with the provisions of Section XIII.
c.Grant of Awards. The Committee may from time to time grant Awards to one or more employees, Consultants, or Directors determined by it to be eligible for participation in the Plan in accordance with the terms of the Plan.
d.Director Equity Retainer Awards. The Company may, from time to time, award shares of Common Stock to one or more non-employee Directors (the “Director Equity Grant”). The Committee shall designate the terms and conditions of the Director Equity Grants granted under this Section V(d), provided, however, that unless otherwise designated by the Committee, the Awards shall be fully vested on the date of grant. The Director Equity Grants shall be paid as Stock Awards on the date of grant and shall not require an Award Agreement. The aggregate Fair Market Value on the date of grant (computed in accordance with applicable financial accounting rules) of the Award issued to a non-employee Director during a calendar year shall be determined by the Committee and shall not exceed $850,000 per calendar year. As of the close of business on the date of grant, the number of Stock Awards issued to each director shall be equal to (x) the designated dollar amount of the Director Equity Grant, divided by (y) the Fair Market Value of a share of Common Stock on such day, which amount shall be rounded to the nearest whole share.
e.Substitute Awards. The Committee may grant Awards under the Plan in substitution for stock and stock based awards held by service providers of another corporation in connection with a merger or consolidation of the service recipient corporation with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the service recipient corporation. The Committee may direct that the substitute awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances. The substitution of any outstanding stock option must satisfy the requirements of Treasury Regulation § 1.424-1 and Section 409A. Any substitute Awards granted under the Plan shall not count against the share limitations set forth in Sections V(a) and (b), nor shall such Shares subject to substitute awards again be available for grant under the Plan to the extent of any forfeiture, expiration, or cash settlement.
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f.Stock Offered. Subject to the limitations set forth in Section V(a), the stock to be offered pursuant to the grant of an Award may be authorized but unissued Common Stock or Common Stock previously issued and outstanding and reacquired by the Company. Any of such Shares which remain unissued and which are not subject to outstanding Awards at the termination of the Plan shall cease to be subject to the Plan but, until the termination of the Plan, the Company shall at all times make available a sufficient number of Shares to meet the requirements of the Plan.
g.Limitation on Dividends and Dividend Equivalents. The Committee may provide that Awards under this Plan shall earn dividends or Dividend Equivalents; provided, however, that the payment of such dividends or Dividend Equivalents shall be subject to the same vesting conditions as apply to the underlying Awards, and no portion of such dividends or Dividend Equivalents shall be paid prior to vesting or during the Forfeiture Restriction period. Prior to payment, such dividends or Dividend Equivalents shall be credited to an account maintained on the books of the Company. Any crediting of dividends or Dividend Equivalents will be subject to such terms, conditions, limitations and restrictions as the Committee may establish, from time to time, including reinvestment in additional shares of Common Stock or common share equivalents. Dividend or Dividend Equivalent rights shall be as specified in the Award Agreement, or pursuant to a resolution adopted by the Committee with respect to outstanding Awards. No dividends or Dividend Equivalents shall be paid on Options or Stock Appreciation Rights.
VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are employees, Consultants, or Directors. An Award may be granted on more than one occasion to the same person, and, subject to the limitations set forth in the Plan, such Award may include an Incentive Stock Option, an Option that is not an Incentive Stock Option, a Stock Award, a Restricted Stock Award, a Performance Award, a Phantom Stock Award, a SAR or an RSU Award or any combination thereof.
VII. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
a.Option Period or Stock Appreciation Right Period. The term of each Option or SAR shall be as specified by the Committee at the date of grant, but shall not be exercisable more than ten years after the date of grant.
b.Limitations on Exercise of Option or Stock Appreciation Right. An Option or SAR shall be exercisable in whole or in such installments and at such times as determined by the Committee.
c.Special Limitations on Incentive Stock Options. Unless otherwise specified in an Award Agreement, Options granted pursuant to the Plan shall be Options that do not constitute Incentive Stock Options. An Incentive Stock Option may be granted only to an individual who is employed by the Company or any parent or subsidiary corporation (as defined in section 424 of the Code) at the time the Option is granted. To the extent that the aggregate Fair Market Value (determined at the time the respective Incentive Stock Option is granted) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company and its parent and subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be treated as Options which do not constitute Incentive Stock Options. No Incentive Stock Option shall be granted to an individual if, at the time the Option is granted, such individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary corporation, within the meaning of section 422(b)(6) of the Code, unless (i) at the time such Option is granted the option price is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) such Option by its terms is not exercisable after the expiration of five years from the date of grant. An Incentive Stock Option shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable during the Participant’s lifetime only by such Participant or the Participant’s guardian or legal representative.
d.Award Agreement.
i.Each Option shall be evidenced by an Award Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve, including provisions to qualify an Incentive Stock Option under section 422 of
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the Code. Each Award Agreement shall specify the effect of termination of (1) employment, (2) the consulting or advisory relationship, or (3) membership on the Board, as applicable, on the exercisability of the Option. An Award Agreement may provide for the payment of the option price as the Committee may specify, including by the delivery of Shares.
ii.Each SAR shall be evidenced by an Award Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve. Unless otherwise set forth in an Award Agreement, upon the exercise of a SAR, a Holder shall be entitled to receive payment from the Company in an amount determined by multiplying (1) the difference between the value of a Share on the date of exercise over the grant price, by (2) the number of Shares with respect to which the SAR is exercised. The per Share grant price for a SAR shall be established on the date of grant of the SAR. At the discretion of the Committee, the payment made to a Holder upon the exercise of a SAR may be in cash, in Shares or in any combination thereof. The Committee’s determination regarding the form of payment may be set out in the applicable SAR Agreement pertaining to the grant of the SAR.
e.Restrictions on Repricing of Options or Stock Appreciation Rights. Except as provided in Section XIII, the Committee may not, without approval of the stockholders of the Company, (i) amend any outstanding Award Agreement for an Option to lower the option price (or cancel and replace any outstanding Award Agreement for an Option with a new Award Agreement having a lower option price), (ii) amend any outstanding Award Agreement for a SAR or to lower the SAR grant price (or cancel and replace any outstanding SAR with a new SAR having a lower SAR grant price), or (iii) cancel any outstanding “underwater” Option or SAR in exchange for cash. Further, the Committee may not lower an option price of an Option (or cancel and replace any outstanding Award Agreement with a new Award Agreement having a lower option price) or lower the SAR grant price (or cancel and replace any outstanding SAR with a new Award Agreement having a lower SAR grant price) to the extent that doing so would subject the Holder to additional taxes under Section 409A.
f.Option Price and Payment. The price at which a Share may be purchased upon exercise of an Option shall be determined by the Committee but, subject to adjustment as provided in Section XIII, such purchase price shall not be less than the Fair Market Value of a Share on the date such Option is granted. The Option or portion thereof may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by the Committee. The purchase price of the Option or portion thereof shall be paid in full in the manner prescribed by the Committee. Separate stock certificates shall be issued by the Company for those Shares acquired pursuant to the exercise of an Incentive Stock Option and for those Shares acquired pursuant to the exercise of any Option that does not constitute an Incentive Stock Option, or should the Shares be represented by book or electronic entry rather than certificates, such Shares shall be accounted for separately in such book or electronic entry.
g.Method of Exercise of Option.
i.General Method of Exercise. Subject to the terms and provisions of the Plan and the applicable Award Agreement, Options may be exercised in whole or in part from time to time by the delivery of written notice in the manner designated by the Committee stating (1) that the Holder wishes to exercise such Option on the date such notice is so delivered, (2) the number of Shares with respect to which the Option is to be exercised, and (3) the address to which any certificate representing such Shares should be mailed or delivered. Except in the case of exercise by a third party broker as provided below, in order for the notice to be effective the notice must be accompanied by payment of the option price by any combination of the following: (A) cash, certified check, bank draft or postal or express money order for an amount equal to the option price under the Option, (B) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Committee or an executive officer of the Company), or (C) any other form of payment which is acceptable to the Committee.
ii.Exercise Through Third-Party Broker. The Committee may permit a Holder to elect to pay the option price and any applicable tax withholding resulting from such exercise by authorizing a third-party broker to sell all or a portion of the Shares acquired upon exercise of the
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Option and remit to the Company a sufficient portion of the sale proceeds to pay the option price and any applicable tax withholding resulting from such exercise.
iii.Options and Stock Appreciation Rights in Substitution for Options Granted by Other Employers. Options and SARs may be granted under the Plan from time to time in substitution for options held by persons who become employees, Consultants, or Directors as a result of a merger or consolidation or other business transaction with the Company or any Affiliate. The repricing prohibitions of Sections VII(e) and XIV shall apply to substitution awards granted pursuant to this Section VII(g).
VIII. RESTRICTED STOCK AWARDS
a.Forfeiture Restrictions To Be Established by the Committee. Shares that are the subject of a Restricted Stock Award shall be subject to restrictions on disposition by the Participant and an obligation of the Participant to forfeit and surrender the Shares to the Company under certain circumstances (“Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by the Committee in its sole discretion, and the Committee may provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or more performance measures established by the Committee, (ii) the continued employment or service with the Company or an Affiliate for a specified period of time, or (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion. Each Restricted Stock Award may have different Forfeiture Restrictions, in the discretion of the Committee.
b.Other Terms and Conditions. Common Stock awarded pursuant to a Restricted Stock Award shall be represented by (i) a stock certificate registered in the name of the Participant, (ii) book or electronic entry or (iii) any other reasonable alternative form for evidencing or representing the issuance of Common Stock. Unless provided otherwise in an Award Agreement, the Participant shall have the right to vote Common Stock subject thereto and to enjoy all other stockholder rights, except that (A) the Participant shall not be entitled to delivery of a stock certificate until the Forfeiture Restrictions have lapsed, (B) the Company shall retain custody of the Common Stock until the Forfeiture Restrictions have lapsed, (C) the Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Common Stock until the Forfeiture Restrictions have lapsed, and (D) a breach of the terms and conditions established by the Committee pursuant to the Award Agreement shall cause a forfeiture of the Restricted Stock Award. At the time of such Award, the Committee may, in its sole discretion, prescribe additional terms, conditions or restrictions relating to Restricted Stock Awards, including rules pertaining to the termination of employment or service as a Consultant or Director (by retirement, disability, death or otherwise) of a Participant prior to expiration of the Forfeitures Restrictions. Such additional terms, conditions or restrictions shall be set forth in the Award Agreement made in conjunction with the Award.
c.Payment for Restricted Stock. The Committee shall determine the amount and form of any payment for Common Stock received pursuant to a Restricted Stock Award, provided that in the absence of such a determination, a Participant shall not be required to make any payment for Common Stock received pursuant to a Restricted Stock Award, except to the extent otherwise required by law.
IX. PERFORMANCE AWARDS
a.Performance Awards Based Upon Satisfaction of Performance Goals. Subject to the terms and provisions of the Plan, the Committee, at any time, and from time to time, may grant Performance Awards under the Plan to eligible persons in such amounts and upon such terms as the Committee shall determine. The amount of, the vesting and the transferability restrictions applicable to any Performance Award shall be based upon the attainment of such Performance Goals as the Committee may determine when a Performance Award is made.
b.Form of Payment Under Performance Award. Payment under a Performance Award shall be made in cash or Shares as specified in the Holder’s Award Agreement.
c.Certification by Committee In Connection with Payment. In connection with the payment of any compensation based on the achievement of Performance Goals, the Committee must certify in writing that applicable Performance Goals and any of the material terms thereof were, in fact, satisfied.
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d.Time of Payment Under Performance Award. Unless a Performance Award is structured as a current transfer of Shares subject to a risk of forfeiture in the event Performance Goals are not achieved, a Holder’s payment under a Performance Award shall be made at such time as is specified in the applicable Award Agreement. The Award Agreement shall specify that such payment will be made (i) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the calendar year in which the Performance Award payment is no longer subject to a Substantial Risk of Forfeiture or (ii) at a time that is permissible under Section 409A.
X. PHANTOM STOCK AWARDS
a.Phantom Stock Awards. Phantom Stock Awards are rights to receive the value of Shares which vest over a period of time as established by the Committee, without satisfaction of any performance criteria or objectives. The Committee may, in its discretion, require payment or other conditions of the Participant respecting any Phantom Stock Award.
b.Award Period. The Committee shall establish, with respect to and at the time of grant of each Phantom Stock Award, a period over which the Award shall vest with respect to the Participant.
c.Awards Criteria. In determining the value of Phantom Stock Awards, the Committee shall take into account a Participant’s responsibility level, performance, potential, other Awards, and such other considerations as it deems appropriate.
d.Payment. Following the end of the vesting period for a Phantom Stock Award (or at such other time as the applicable Phantom Stock Award Agreement may provide), the holder of a Phantom Stock Award shall be entitled to receive payment of an amount, not exceeding the maximum value of the Phantom Stock Award, based on the then vested value of the Award. Payment of a Phantom Stock Award may be made in cash, Common Stock, or a combination thereof as determined by the Committee.
e.Termination of Award. A Phantom Stock Award shall terminate if the Participant does not remain continuously in the employ of the Company and its Affiliates or does not continue to perform services as a Consultant or a Director for the Company and its Affiliates at all times during the applicable vesting period, except as may be otherwise determined by the Committee.
XI. STOCK AWARDS
a.Stock Awards. Stock Awards are rights to receive Shares, which vest immediately, without satisfaction of any performance criteria or objectives. The Committee may, in its discretion, require payment, partial payment or other conditions of the Participant respecting any Stock Award.
b.Awards Criteria. In determining the number of Shares subject to a Stock Award to be granted, the Committee may take into account a Participant’s responsibility level, performance, potential, other Awards, and such other considerations as it deems appropriate.
c.Payment. A Participant who receives a Stock Award shall be entitled to receive immediate payment of such Award in Common Stock.
XII. RESTRICTED STOCK UNIT AWARDS
a.RSU Awards. An RSU Award shall be similar in nature to a Restricted Stock Award except that no Shares or cash shall be transferred to the Holder until the applicable vesting restrictions lapse or performance conditions have been satisfied. The amount of, and the vesting and the transferability restrictions applicable to, any RSU Award shall be determined by the Committee in its sole discretion. The Committee shall maintain a bookkeeping ledger account which reflects the number of RSUs credited under the Plan for the benefit of a Holder.
b.Form of Payment Under RSU Award. Payment under an RSU Award shall be made in cash or Shares as specified in the applicable Award Agreement.
c.Time of Payment Under RSU Award. Payment to a Holder under an RSU Award shall be made at such time as is specified in the applicable Award Agreement. The Award Agreement shall specify that
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the payment will be made (i) by a date that is no later than the date that is two and one-half (2 1/2) months after the end of the fiscal year in which the RSU Award payment is no longer subject to a Substantial Risk of Forfeiture, or (ii) at a time that is permissible under Section 409A.
XIII. RECAPITALIZATION; REORGANIZATION AND CORPORATE CHANGES
a.No Effect on Right or Power. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s or any Affiliate’s capital structure or its business, any merger or consolidation of the Company or any Affiliate, any issue of debt or equity securities ahead of or affecting Common Stock or the rights thereof, the dissolution or liquidation of the Company or any Affiliate or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding, whether of a similar character or otherwise.
b.Adjustment Clause. In the event of any change in the outstanding Shares of the Company by reason of any stock dividend, split, spinoff, recapitalization, merger, consolidation, combination, extraordinary dividend, exchange of shares or other change affecting the outstanding Shares as a class without the Company’s receipt of consideration, or other equity restructuring within the meaning of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Stock Compensation (formerly, FASB Statement 123R), adjustments shall be made by the Committee to (i) the terms, the number of Shares and/or the exercise price per Share relating to any outstanding Awards, and (ii) the share limitations set forth in Section V hereof, with such adjustments being appropriate and equitable to prevent dilution or enlargement of rights; provided, however, that the number of Shares subject to any Award shall always be a whole number. The Committee shall also make appropriate adjustments described in the previous sentence in the event of any distribution of assets to stockholders other than a normal cash dividend. Adjustments, if any, and any determination or interpretations, made by the Committee shall be final, binding and conclusive. Conversion of any convertible securities of the Company shall be deemed to have been effected for adequate consideration. Except as expressly provided herein, no issuance by the Company of shares of any class or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award.
c.Corporate Changes. If a Corporate Change occurs, the Committee, without limitation or the consent or approval of any Participant (subject to any restrictions or limitations in an individual Award Agreement or any other written agreement entered into between the Company and a Participant), shall effect one or more of the following alternatives, as selected by the Committee in its sole discretion, which alternatives may vary among individual Participants and which may vary among Awards held by any individual Participant:
i.for any award of Options or SARs, either (A) accelerate the time at which the Options and SARs then outstanding may be exercised so that such Options or SARs may be exercised in full for a limited period of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all unexercised Options and SARs and all rights of the Participants thereunder shall terminate; or (B) require the mandatory surrender to the Company by all or selected Participants of some or all of the outstanding Options and SARs held by such Participants (irrespective of whether such Awards are then exercisable under the provisions of the Plan or the applicable Award Agreements) as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and the Company shall pay (or cause to be paid) to each Participant an amount of cash per Share equal to the excess, if any, of the Change in Control Value of the Shares subject to such Option over the exercise price(s) under such Option for such Shares or the grant date values of the SARs with respect to such Shares (provided, however, that such Awards may, in the Committee’s discretion, be cancelled for no consideration if there is no excess amount);
ii.for any Award, with respect to all or selected Participants, have some or all of their then outstanding Awards (whether vested or unvested) assumed or have a new award of a similar
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nature substituted for some or all of their then outstanding Awards under the Plan (whether vested or unvested) by an entity which is a party to the transaction resulting in such Corporate Change and which is then (or will be upon completion of the Corporate Change transaction) employing such Participant or which is (or will be upon completion of the Corporate Change transaction) affiliated or associated with such Participant in the same or a substantially similar manner as the Company prior to the Corporate Change, or a parent or subsidiary of such entity, provided that (A) such assumption or substitution is on a basis where the aggregate Fair Market Value of the Common Stock subject to the Award immediately after the assumption or substitution is equal to the aggregate Fair Market Value of all Common Stock subject to the Award immediately before such assumption or substitution, and (B) the assumed rights under such existing Award or the substituted rights under such new award, as the case may be, will have substantially the same terms and conditions as the rights under the existing Award assumed or substituted for, as the case may be;
iii.make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Corporate Change (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding), including adjusting an Award to provide that the number and class of Shares covered by such Award shall be adjusted so that such Award shall thereafter cover securities of the surviving or acquiring corporation or other property (including cash) as determined by the Committee in its sole discretion; or
iv.except as otherwise provided in Section XV(h) or an Award Agreement, then, in addition to the foregoing provisions of this Section XIII(c), upon the occurrence of a Corporate Change, the Committee, acting in its sole discretion without the consent or approval of any Participant, may require the mandatory surrender to the Company by selected Participants of some or all of the outstanding Awards, as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and the Company shall pay (or cause to be paid) to each Participant an amount of cash equal to the maximum value of such Award which, in the event the applicable performance or vesting period set forth in such Award has not been completed, shall be multiplied by a fraction, the numerator of which is the number of days during the period beginning on the first day of the applicable performance or vesting period and ending on the date of the surrender, and the denominator of which is the aggregate number of days in the applicable performance or vesting period.
d.Other Changes in the Common Stock. In the event of changes in the outstanding Common Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations, split-ups, split-offs, spin-offs, exchanges or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after the date of the grant of any Award and not otherwise provided for by this Section XIII, such Award and any agreement evidencing such Award shall be subject to adjustment by the Committee at its sole discretion as to the number and price of Shares or other consideration subject to such Award. In the event of any such change in the outstanding Common Stock or distribution to the holders of Common Stock, the aggregate number of Shares then available for issuance under the Plan under Section V(a) may be appropriately adjusted by the Committee, whose determination shall be conclusive.
e.Section 409A Limitations.The following provisions shall apply with respect to any action taken under this Section XIII:
i.any adjustments made to Awards that are considered “deferred compensation” within the meaning of Section 409A shall be made in compliance with the requirements of Section 409A unless the Participant consents otherwise;
ii.any adjustments made to Awards that are not considered “deferred compensation” subject to Section 409A shall be made in such a manner as to ensure that after such adjustment, the Awards either continue not to be subject to Section 409A or comply with the requirements of Section 409A unless the Participant consents otherwise; and
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iii.in any circumstance or transaction in which compensation resulting from or in respect of an Award would result in the imposition of an additional tax under Section 409A if the Plan’s definition of “Corporate Change” were to apply, but would not result in the imposition of any additional tax if the term “Corporate Change” were defined herein to mean a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), then “Corporate Change” shall mean a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), but only to the extent necessary to prevent such compensation from becoming subject to an additional tax under Section 409A.
f.No Adjustments Unless Otherwise Provided. Except as hereinbefore expressly provided, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to Awards theretofore granted or the purchase price per share, if applicable.
XIV. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with respect to any Shares for which Awards have not theretofore been granted. The Board shall have the right to alter or amend the Plan or any part thereof from time to time; provided that no change in the Plan may be made that would impair the rights of a Participant with respect to an Award theretofore granted without the consent of the Participant, and provided, further, that the Board may not, without approval of the stockholders of the Company, (a) amend the Plan to increase the maximum aggregate number of Shares that may be issued under the Plan or change the class of individuals eligible to receive Awards under the Plan, or (b) amend or delete Section VII(e).
XV. MISCELLANEOUS
a.No Right To An Award. Neither the adoption of the Plan nor any action of the Board or of the Committee shall be deemed to give any individual any right to be granted an Award or any other rights hereunder except as may be evidenced by an Award Agreement duly executed on behalf of the Company, and then only to the extent and on the terms and conditions expressly set forth therein. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the performance of its obligations under any Award.
b.No Employment/Membership Rights Conferred. Nothing contained in the Plan shall (i) confer upon any employee or Consultant any right with respect to continuation of employment or of a consulting or advisory relationship with the Company or any Affiliate or (ii) interfere in any way with the right of the Company or any Affiliate to terminate his or her employment or consulting or advisory relationship at any time. Nothing contained in the Plan shall confer upon any Director any right with respect to continuation of membership on the Board.
c.Other Laws. The Company shall not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the Shares covered by such Award have not been registered under the Securities Act of 1933, as amended, and such other state and federal laws, rules and regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration requirements of such laws, rules and regulations available for the issuance and sale of such Shares.
d.No Fractional Shares. No fractional Shares shall be delivered, nor shall any cash in lieu of fractional Shares be paid.
e.Withholding. The Company or any Affiliate shall be entitled to deduct from any other compensation payable to each Holder any sums required by federal, state, local or foreign tax law to be withheld with respect to an Award including the vesting or exercise of an Award. Alternatively, the Company or any Affiliate may require the Holder (or other person validly exercising the Award) to pay such sums for taxes directly to the Company or Affiliate in cash or by check upon the vesting or exercise.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 13
Alternatively, in the discretion of the Committee, the Company may reduce the number of Shares issued to the Holder upon the exercise or vesting of a Holder’s Award to satisfy the tax withholding obligations of the Company or an Affiliate. The Committee may, in its discretion, allow a Holder to use Mature Shares to satisfy the Company’s or Affiliate’s tax withholding obligations with respect to an Award. The Company shall have no obligation upon vesting or exercise of any Award until the Company or an Affiliate has received payment sufficient to satisfy the Company’s or Affiliate’s tax withholding obligations with respect to that vesting or exercise. Neither the Company nor any Affiliate shall be obligated to advise a Holder of the existence of the tax or the amount which it will be required to withhold.
f.No Restriction on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Participant, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.
g.Restrictions on Transfer. An Award (other than an Incentive Stock Option, which shall be subject to the transfer restrictions set forth in Section VII(c)) shall not be transferable otherwise than (i) by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code, or the rules thereunder, (iii) with respect to Awards of Options which do not constitute Incentive Stock Options, if such transfer is permitted in the sole discretion of the Committee, by transfer by a Participant to a member of the Participant’s Immediate Family, to a trust solely for the benefit of the Participant and the Participant’s Immediate Family, or to a partnership or limited liability company whose only partners or stockholders are the Participant and members of the Participant’s Immediately Family, or (iv) with the consent of the Committee; provided, however, no Award shall be transferred for value without stockholder approval.
h.Compliance With Section 409A. Awards shall be designed, granted and administered in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A. Each Award Agreement for an Award that is intended to comply with the requirements of Section 409A shall be construed and interpreted in accordance with such intention. If the Committee determines that an Award, an Award Agreement, payment, distribution, deferral election, transaction, or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken or implemented, cause a Holder to become subject to additional taxes under Section 409A, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Holder. The exercisability of an Option shall not be extended to the extent that such extension would subject the Holder to additional taxes under Section 409A.
i.Restrictions. If the Committee imposes vesting or transferability restrictions on a Holder’s rights with respect to an Award, the Committee may issue such instructions to the Company’s stock transfer agent in connection therewith as it deems appropriate. The Committee may also cause the certificate for Shares issued pursuant to an Award to be imprinted with any legend which counsel for the Company considers advisable with respect to the restrictions or, should the Shares be represented by book or electronic entry rather than a certificate, the Company may take such steps to restrict transfer of the Shares as counsel for the Company considers necessary or advisable to comply with applicable law.
j.Rights As a Stockholder. Subject to the terms and conditions of the Plan and the applicable Award Agreements, each Holder of an Award shall have all the rights of a stockholder with respect to Shares issued to the Holder pursuant to the Award during any period in which such issued Shares are subject to forfeiture and restrictions on transfer, including the right to vote such Shares. In no event shall a Holder have any rights of a stockholder with respect to an Award before Shares are issued to the Holder pursuant to the Award.
k.Recoupment.All Awards granted under the Plan will be subject to recoupment in accordance with any recoupment policy that the Company has adopted or adopts (i) pursuant to the requirements of
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 14
the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law, or (ii) that otherwise imposes recoupment provisions in the event of (1) a restatement by the Company of its financial statements, or (2) misconduct that causes financial or reputational harm to the Company.
l.Persons Residing Outside of the United States. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company or any of its Affiliates operates or has employees, the Committee, in its sole discretion, shall have the power and authority to (i) determine which Affiliates shall be covered by the Plan; (ii) determine which persons employed or hired outside the United States are eligible to participate in the Plan; (iii) amend or vary the terms and provisions of the Plan and the terms and conditions of any Award granted to persons who reside outside the United States; (iv) establish subplans and modify exercise procedures and other terms and procedures to the extent such actions may be necessary or advisable (and any subplans and modifications to Plan terms and procedures established under this Section XV(l) by the Committee shall be attached to the Plan document as Appendices); and (v) take any action, before or after an Award is made, that it deems advisable to obtain or comply with any necessary local government regulatory exemptions or approvals. Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the 1934 Act, the Code, any securities law or governing statute or any other applicable law.
m.Right of Offset.The Company will have the right to offset against its obligation to deliver Shares (or other property, including cash) under the Plan or any Award Agreement any outstanding amounts (including, without limitation, travel and entertainment or advance account balances, loans, repayment obligations under any Awards, or amounts repayable to the Company pursuant to tax equalization, housing, automobile or other employee programs) that the Participant then owes to the Company and any amounts the Committee otherwise deems appropriate pursuant to any tax equalization policy or agreement; provided, however, that no such offset shall be permitted if it would constitute an “acceleration” of a payment hereunder within the meaning of Section 409A. This right of offset shall not be an exclusive remedy and the Company’s election not to exercise the right of offset with respect to any amount payable to a Participant shall not constitute a waiver of this right of offset with respect to any other amount payable to the Participant or any other remedy.
n.Electronic Delivery and Signatures. Any reference in an Award Agreement or the Plan to a written document includes without limitation any document delivered electronically or posted on the Company’s or an Affiliate’s intranet or other shared electronic medium controlled by the Company or an Affiliate. The Committee and any Participant may use facsimile, PDF or other electronic signatures in signing any Award or Award Agreement, in exercising any Option or Stock Appreciation Right, or in any other written document in the Plan’s administration. The Committee and each Participant are bound by facsimile, PDF and other electronic signatures, and acknowledge that the other party relies on facsimile and PDF signatures.
o.No Guarantee of Tax Treatment. Notwithstanding anything herein to the contrary, a Participant shall be solely responsible for the taxes relating to the grant or vesting of, or payment pursuant to, any Award, and none of the Company, the Board or the Committee (or any of their respective members, officers or employees) guarantees any particular tax treatment with respect to any Award.
p.Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to conflicts of laws principles thereof.
q.Interpretation. The term “including” means “including without limitation.” The term “or” means “and/or” unless clearly indicated otherwise. The term “vest” includes the lapse of restrictions on Awards, including Forfeiture Restrictions. Reference herein to a “Section” shall be to a section of the Plan unless indicated otherwise.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
A - 15
Appendix B
Independence Categorical Standards
(October 16, 2008)February 21, 2018)
The board of directors (“Board”) of Crown Castle International Corp. (“Company”) has established the following guidelines to assist it in determining whether a director of the Company (“Director”) has a “material relationship” with the Company and is “independent”. Each of the
The following relationships described below isare not “material relationships” that would impair a “material relationship” by itself and therefore will not prevent a Director from being “independent”Director’s “independence” (“Safe Harbor Relationships”):
•Certain RelationshipsPrior Relationships.. Directorship more More than three years after: (i) have elapsed since:
a)the Director was employed by the Company; (ii) an immediate family member of the Director (“
b)a Family Member”)Member (defined below) was employed by the Company as an executive officer; (iii)
c)the Director or a Family Member (in a professional capacity) was a partner with or employed by the Company’s internal or external auditor (“Auditor”) and personally worked on the Company’s audit; or (iv)
d)a present executive officer of the Company served on the compensation committee of a company which employed at the same time the Director or a Family Member as an executive officer.
•Current EmploymentEmployment. . A Family Member (i) is is:
a)employed by the Company in a non-officer positionposition; or (ii) is
b)employed by, but is not a partner with, the Auditor and does not personally work on the Company’s audit.
Compensation•. ACompensation. The Director or a Family Member receives or has received less than $120,000 during any 12-month period in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
•Business RelationshipsRelationships. . AThe Director or a Family Member is or was a partner, greater than 10% shareholder, director, officer or employee of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, does not exceedis less than the greater of (a) $1of:
a)$1 million, or (b)
b)two percent (2%) of such other company’s consolidated gross revenues.
Indebtedness•. AIndebtedness. The Director or a Family Member is a partner, greater than 10% shareholder, director, officer or employee of a company that is indebted to the Company or to which the Company is indebted, and the total amount of each company’s indebtedness to the other is less than two percent (2%) of the total consolidated assets of such other company.
•Charitable ContributionsContributions. . AThe Director or a Family Member is a trustee, fiduciary, director, officer or employee of a tax-exempt organization to which the Company contributes, and the Company’s contributions in any single fiscal year to thethat organization does not exceedare less than the greater of (a) $500,000,of:
a)$500,000, or (b)
b)one percent (1%) of that organization’s total annual receipts.
•Stock OwnershipOwnership. . DirectThe Director owns, directly or indirect ownership by a Director ofindirectly, a significant amount of Company stock (including securities convertible into Company stock).
An “immediate family member”A “Family Member” is a Director’s spouse, parents, children, siblings, mother- and father-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares such Director’s home.
If a Director has a significant relationship with the Company that isdoes not described above, or is outsideconstitute a Safe Harbor Relationship, the determination of whether such relationship constitutes a “material relationship”, and therefore whether the parameters above, anddirector qualifies as independent, should be made by the Board determines thatbased on the Director is “independent”, the Board will disclose the basis for such determination in the Company’s annual proxy statement.totality of circumstances. In addition, members of the Audit Committee are subject to additional standards relating to their independence.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
AB - 1
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Crown Castle International Corp.
1220 Augusta Drive, Suite 600
Houston, TX 77057
| Notice of
Annual Meeting of Stockholders
May 19, 2016
and Proxy Statement
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Appendix CNon-GAAP Financial Measures
This Proxy Statement includes presentations of Adjusted EBITDA, Adjusted Funds from Operations ("AFFO"), including per share amounts, and Funds from Operations ("FFO"), which are non-GAAP financial measures. These non-GAAP financial measures are not intended as alternative measures of operating results or cash flow from operations (as determined in accordance with Generally Accepted Accounting Principles ("GAAP")).
Our non-GAAP financial measures are presented as additional information because management believes these measures are useful indicators of the financial performance of our business. Among other things, management believes that:
•Adjusted EBITDA is useful to investors or other interested parties in evaluating our financial performance. Adjusted EBITDA is the primary measure used by management (1) to evaluate the economic productivity of our operations and (2) for purposes of making decisions about allocating resources to, and assessing the performance of, our operations. Management believes that Adjusted EBITDA helps investors or other interested parties meaningfully evaluate and compare the results of our operations (1) from period to period and (2) to our competitors, by removing the impact of our capital structure (primarily interest charges from our outstanding debt) and asset base (primarily depreciation, amortization and accretion) from our financial results. Management also believes Adjusted EBITDA is frequently used by investors or other interested parties in the evaluation of the communications infrastructure sector and other real estate investment trusts ("REITs") to measure financial performance without regard to items such as depreciation, amortization and accretion which can vary depending upon accounting methods and the book value of assets. In addition, Adjusted EBITDA is similar to the measure of current financial performance generally used in our debt covenant calculations. Adjusted EBITDA should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.
•AFFO, including per share amounts, is useful to investors or other interested parties in evaluating our financial performance. Management believes that AFFO helps investors or other interested parties meaningfully evaluate our financial performance as it includes (1) the impact of our capital structure (primarily interest expense on our outstanding debt and dividends on our preferred stock (in periods where applicable)) and (2) sustaining capital expenditures, and excludes the impact of our (a) asset base (primarily depreciation, amortization and accretion) and (b) certain non-cash items, including straight-lined revenues and expenses related to fixed escalations and rent free periods. GAAP requires rental revenues and expenses related to leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease. In accordance with GAAP, if payment terms call for fixed escalations, or rent free periods, the revenue or expense is recognized on a straight-lined basis over the fixed, non-cancelable term of the contract. Management notes that Crown Castle uses AFFO only as a performance measure. AFFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flows from operations or as residual cash flow available for discretionary investment.
•FFO is useful to investors or other interested parties in evaluating our financial performance. Management believes that FFO may be used by investors or other interested parties as a basis to compare our financial performance with that of other REITs. FFO helps investors or other interested parties meaningfully evaluate financial performance by excluding the impact of our asset base (primarily depreciation, amortization and accretion). FFO is not a key performance indicator used by Crown Castle. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance and should not be considered as an alternative to cash flow from operations.
We define our non-GAAP financial measures as follows:
Adjusted EBITDA. We define Adjusted EBITDA as Income (loss) from continuing operations plus restructuring charges (credits), asset write-down charges, acquisition and integration costs, depreciation, amortization and accretion, amortization of prepaid lease purchase price adjustments, interest expense and amortization of deferred financing costs, (gains) losses on retirement of long-term obligations, net (gain) loss on
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
C - 1
interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, interest income, other (income) expense, (benefit) provision for income taxes, cumulative effect of a change in accounting principle and stock-based compensation expense.
AFFO. We define AFFO as FFO before straight-lined revenue, straight-lined expense, stock-based compensation expense, non-cash portion of tax provision, non-real estate related depreciation, amortization and accretion, amortization of non-cash interest expense, other (income) expense, (gains) losses on retirement of long-term obligations, net (gain) loss on interest rate swaps, (gains) losses on foreign currency swaps, impairment of available-for-sale securities, acquisition and integration costs, restructuring charges (credits), cumulative effect of a change in accounting principle and adjustments for noncontrolling interests, less sustaining capital expenditures.
AFFO per share. We define AFFO per share as AFFO divided by diluted weighted-average common shares outstanding
FFO. We define FFO as Income (loss) from continuing operations plus real estate related depreciation, amortization and accretion and asset write-down charges, less noncontrolling interest and cash paid for preferred stock dividends (in periods where applicable), and is a measure of funds from operations attributable to the Company's common stockholders.
Reconciliations of Non-GAAP Financial Measures:
Reconciliation of Historical Adjusted EBITDA:
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| | For the Twelve Months Ended | | |
(in millions) | | December 31, 2021 | | December 31, 2020 | | |
Income (loss) from continuing operations | | $ | 1,158 | | | $ | 1,056 | | | |
Adjustments to increase (decrease) Income (loss) from continuing operations: | | | | | | |
Asset write-down charges | | 21 | | | 74 | | | |
Acquisition and integration costs | | 1 | | | 10 | | | |
Depreciation, amortization and accretion | | 1,644 | | | 1,608 | | | |
Amortization of prepaid lease purchase price adjustments | | 18 | | | 18 | | | |
Interest expense and amortization of deferred financing costs | | 657 | | | 689 | | | |
(Gains) losses on retirement of long-term obligations | | 145 | | | 95 | | | |
Interest income | | (1) | | | (2) | | | |
Other (income) expense | | 21 | | | 5 | | | |
(Benefit) provision for income taxes | | 21 | | | 20 | | | |
Stock-based compensation expense | | 131 | | | 133 | | | |
Adjusted EBITDA | | $ | 3,816 | | | $ | 3,706 | | | |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
C - 2
Reconciliation of Historical FFO and AFFO:
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| | For the Twelve Months Ended | | |
(in millions) | | December 31, 2021 | | December 31, 2020 | | |
Income (loss) from continuing operations | | $ | 1,158 | | | $ | 1,056 | | | |
Real estate related depreciation, amortization and accretion | | 1,593 | | | 1,555 | | | |
Asset write-down charges | | 21 | | | 74 | | | |
Dividends/distributions on preferred stock | | — | | | (85) | | | |
FFO | | $ | 2,772 | | | $ | 2,600 | | | |
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FFO (from above) | | $ | 2,772 | | | $ | 2,600 | | | |
Adjustments to increase (decrease) FFO: | | | | | | |
Straight-lined revenue | | (111) | | | (22) | | | |
Straight-lined expense | | 76 | | | 83 | | | |
Stock-based compensation expense | | 131 | | | 133 | | | |
Non-cash portion of tax provision | | 1 | | | 1 | | | |
Non-real estate related depreciation, amortization and accretion | | 51 | | | 53 | | | |
Amortization of non-cash interest expense | | 13 | | | 6 | | | |
Other (income) expense | | 21 | | | 5 | | | |
(Gains) losses on retirement of long-term obligations | | 145 | | | 95 | | | |
Acquisition and integration costs | | 1 | | | 10 | | | |
Sustaining capital expenditures | | (87) | | | (86) | | | |
AFFO | | $ | 3,013 | | | $ | 2,878 | | | |
Weighted-average common shares outstanding—diluted | | 434 | | | 425 | | | |
AFFO per share | | $ | 6.95 | | | $ | 6.78 | | | |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
C - 3
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Crown Castle International Corp. 8020 Katy Freeway Houston, TX 77024 | Notice of Annual Meeting of Stockholders May 19, 2022 and Proxy Statement |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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1220 AUGUSTA DRIVE8020 KATY FREEWAY
HOUSTON, TX 7705777024 | | VOTE BY INTERNET - www.proxyvote.com or scan the QR barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 18, 2022. If you participate in the day before the cut-off date or meeting date.Crown Castle International Corp. 401(k) Plan, you must vote these shares no later than 11:59 P.M. Eastern Time on May 16, 2022. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 18, 2022. If you participate in the Crown Castle International Corp. 401(k) Plan, you must vote these shares no later than 11:59 P.M. Eastern Time on May 16, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
| | D76566-P66177-Z81776 | KEEP THIS PORTION FOR YOUR RECORDS |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
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| CROWN CASTLE INTERNATIONAL CORP. The Board of Directors recommends you vote FOR each of the nominees in Proposal 1: | | | | | | | | | | |
| 1. Election of Directors Nominees: | | For | | Against | | Abstain | | | | | | | | | | |
| 1a. P. Robert Bartolo | | ¨ | | ¨ | | ¨ | | The Board of Directors recommends you vote FOR Proposals 2, 3, 4 and 5: | | For | | Against | | Abstain | | |
| 1b. Jay A. Brown | | ¨ | | ¨ | | ¨ | | 2.The ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accountants for fiscal year 2022. | | ¨ | | ¨ | | ¨ | | |
| 1c. Cindy Christy | | ¨ | | ¨ | | ¨ | | | | | | |
| 1d. Ari Q. Fitzgerald | | ¨ | | ¨ | | ¨ | | 3.The proposal to approve the Company's 2022 Long-Term Incentive Plan. | | ¨ | | ¨ | | ¨ | | |
| 1e. Andrea J. Goldsmith | | ¨ | | ¨ | | ¨ | | | | | | | | | | |
| 1f. Tammy K. Jones | | ¨ | | ¨ | | ¨ | | 4.The amendment to the Company's Restated Certificate of Incorporation to increase the number of authorized shares of common stock. | | ¨ | | ¨ | | ¨ | | |
| 1g. Anthony J. Melone | | ¨ | | ¨ | | ¨ | | | | | |
| 1h. W. Benjamin Moreland | | ¨ | | ¨ | | ¨ | | 5.The non-binding, advisory vote to approve the compensation of the Company's named executive officers. | | ¨ | | ¨ | | ¨ | | |
| 1i. Kevin A. Stephens | | ¨ | | ¨ | | ¨ | | | | | | |
| 1j. Matthew Thornton, III | | ¨ | | ¨ | | ¨ | | NOTE: The undersigned also authorizes the named proxies to vote in their discretion upon such other business as may properly come before the meeting or any adjournment or postponement thereof. | | | | | | |
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| Please indicate if you plan to attend this meeting. | | ¨ | | ¨ | | | | | | | | | | | | |
| | | YES | | NO | | | | | | | | | | | | |
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| Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | |
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | | | |
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by Crown Castle International Corp.our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions aboveon the reverse side to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up untilImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you callThe Notice and then follow the instructions.
VOTE BY MAIL
Mark, signProxy Statement and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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| | E06771-P77273-Z67512
| KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | DETACH AND RETURN THIS PORTION ONLY |
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| Form 10-K are available at CROWN CASTLE INTERNATIONAL CORPwww.proxyvote.com. The Board of Directors recommends you vote FOR each of the nominees in Proposal 1:
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| 1.Election of Directors
Nominees:
| | For | | Against | | Abstain | | | | | | | | |
| 1a. P. Robert Bartolo | | ¨ | | ¨ | | ¨ | | | | | | | | |
| 1b. Jay A. Brown | | ¨ | | ¨ | | ¨ | | | | For | | Against | | Abstain |
| 1c. Cindy Christy | | ¨ | | ¨ | | ¨ | | 1j. Robert F. McKenzie | | ¨ | | ¨ | | ¨ |
| 1d. Ari Q. Fitzgerald | | ¨ | | ¨ | | ¨ | | 1k. Anthony J. Melone | | ¨ | | ¨ | | ¨ |
| 1e. Robert E. Garrison II | | ¨ | | ¨ | | ¨ | | 1l. W. Benjamin Moreland | | ¨ | | ¨ | | ¨ |
| 1f. Dale N. Hatfield | | ¨ | | ¨ | | ¨ | | | | | | | | |
| 1g. Lee W. Hogan | | ¨ | | ¨ | | ¨ | | The Board of Directors recommends you vote FOR Proposals 2 and 3: | | | | | | |
| 1h. Edward C. Hutcheson, Jr. | | ¨ | | ¨ | | ¨ | | 2. The ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accountants for fiscal year 2016. | | | | | | |
| 1i. J. Landis Martin | | ¨ | | ¨ | | ¨ | | | ¨ | | ¨ | | ¨ |
| For address changes/comments, mark here. (see reverse for instructions) | | | | | | ¨ | | 3. The non-binding, advisory vote regarding the compensation of the Company's named executive officers. | | ¨ | | ¨ | | ¨ |
| Please indicate if you plan to attend this meeting. | | ¨ | | ¨ | | | | NOTE: The undersigned also authorizes the named proxies to vote in their discretion upon such other business as may properly come before the meeting or any adjournment or postponement thereof. | | | | | | |
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| Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.
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| Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com.
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E06772-P77273-Z67512 | | | | | | | | | | CROWN CASTLE INTERNATIONAL CORP. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS May 19, 2022 | | | | | | The undersigned hereby appoint(s) Jay A. Brown and Donald J. Reid, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) each of them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of Crown Castle International Corp. that the undersigned is/are entitled to vote at the Annual Meeting of Stockholders to be held on Thursday, May 19, 2022 at 9:00 a.m. Central Time at the Company’s Corporate Offices at 8020 Katy Freeway, Houston, TX 77024. | | | | | | IF YOU ARE A STOCKHOLDER, THIS PROXY, WHEN PROPERLY EXECUTED AND DELIVERED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED IN PROPOSAL 1 ON THE REVERSE SIDE, "FOR" EACH OF PROPOSALS 2, 3, 4 AND 5, AND IN THE DISCRETION OF THE PROXIES NAMED ABOVE ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. VOTING INSTRUCTIONS MUST BE RECEIVED BY 11:59 P.M. EASTERN TIME ON MAY 18, 2022. | | | | | | IF YOU ARE A PARTICIPANT IN THE CROWN CASTLE INTERNATIONAL CORP. 401(K) PLAN (“PLAN”), THEN THE PROXY CARD, WHEN PROPERLY EXECUTED AND DELIVERED, WILL CONSTITUTE VOTING INSTRUCTIONS TO CHARLES SCHWAB BANK, AS TRUSTEE FOR THE PLAN (“TRUSTEE”), WITH RESPECT TO SHARES OF COMMON STOCK ALLOCABLE TO YOUR ACCOUNT ON MATTERS PROPERLY COMING BEFORE THE ANNUAL MEETING OF STOCKHOLDERS AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF. IF YOU, AS THE PARTICIPANT IN THE PLAN, FAIL TO PROVIDE INSTRUCTIONS BY 11:59 P.M. EASTERN TIME ON MAY 16, 2022, THE INDEPENDENT FIDUCIARY FOR THE PLAN WILL INSTRUCT THE TRUSTEE TO VOTE SUCH SHARES OF COMMON STOCK IN THE SAME PROPORTION AS SHARES OF COMMON STOCK FOR WHICH VOTING INSTRUCTIONS HAVE BEEN TIMELY AND PROPERLY RECEIVED FROM OTHER PLAN PARTICIPANTS, UNLESS REQUIRED BY APPLICABLE LAW TO EXERCISE DISCRETION IN VOTING SUCH SHARES. | | | | | | PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE. | | | | | | Continued and to be signed on reverse side | | | |
CROWN CASTLE INTERNATIONAL CORP.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS
May 19, 2016
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| THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED IN PROPOSAL 1 ON THE REVERSE SIDE, "FOR" EACH OF PROPOSALS 2 AND 3, AND IN THE DISCRETION OF THE PROXIES NAMED BELOW ON ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
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| PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE. | |
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| The undersigned hereby appoints W. Benjamin Moreland and Donald J. Reid, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes each of them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Crown Castle International Corp. that the undersigned is/are entitled to vote at the Annual Meeting of Stockholders to be held at 9:00 A.M., Central Time on May 19, 2016, at the Company's corporate office at 1220 Augusta Drive, Suite 600, Houston, TX 77057, and any adjournments or postponements thereof.
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| Address Changes/Comments: | |
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| (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | |
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| Continued and to be signed on reverse side | |