Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2011
Crown Castle International Corp.
(Exact name of registrant as specified in its charter)
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Delaware
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001-16441
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76-0470458 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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1220 Augusta Drive
Suite 500 Houston, TX
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77057 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (713) 570-3000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF
CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
(e) 2011 EMT Annual Incentive Plan. On February 10, 2011, the Board, upon
recommendation from the Compensation Committee, approved the Crown Castle 2011 EMT Annual Incentive
Plan (2011 Incentive Plan) for the Companys executive management team (EMT), including W.
Benjamin Moreland, the Companys President and Chief Executive Officer and the Companys other
executive officers. The 2011 Incentive Plan is intended to provide incentives to members of the
Companys EMT in the form of cash payments for achieving certain performance goals established
under the 2011 Incentive Plan. Under the 2011 Incentive Plan, each eligible participant has an
assigned target bonus level, expressed as a percent of base salary. Depending on the achievement of
specified levels of corporate and business unit financial performance goals and individual
performance goals, each eligible participant may earn a multiple of the target bonus. The Boards
approval of the 2011 Incentive Plan does not create a guarantee of an incentive award to any
eligible participant, and the Compensation Committee retains discretion to discontinue or amend the
2011 Incentive Plan at any time. A copy of the 2011 Incentive Plan is filed as Exhibit 10.1 to
this Form 8-K.
Executive Officer Compensation. On February 10, 2011, the Board, upon recommendation
from the Compensation Committee, approved the following base salaries, annual incentives and
restricted stock awards (RSAs) with respect to the following executive officers of the Company:
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2011 |
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2011 |
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Performance |
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2011 |
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2010 |
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Time Vest RSAs |
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RSAs |
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Name and Principal Position |
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Base Salary ($) |
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Annual Incentive ($) |
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(Shares) |
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(Shares) |
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W. Benjamin Moreland |
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$ |
700,000 |
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$ |
1,012,500 |
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28,356 |
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86,806 |
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President and Chief
Executive Officer |
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Jay A. Brown |
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$ |
427,264 |
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$ |
467,069 |
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10,715 |
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32,800 |
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Senior Vice President,
Chief Financial
Officer and Treasurer |
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James D. Young |
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$ |
424,980 |
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$ |
444,006 |
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10,657 |
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32,624 |
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Chief Operating Officer |
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E. Blake Hawk |
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$ |
400,033 |
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$ |
395,657 |
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6,791 |
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20,788 |
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Executive Vice
President and General
Counsel |
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The terms of the 2011 Time Vest RSAs shown in the table above provide that one-third of the shares
underlying such RSAs vest (i.e., the forfeiture and transfer restrictions lapse) on February 19 of
each of 2012, 2013 and 2014.
The terms of the 2011 Performance RSAs shown in the table above provide for 0% to 100% of the
shares underlying such RSAs to vest on February 19, 2014 (Price Performance Date) based upon the
highest average closing price per share of the Companys common stock (Common Stock) for 20
consecutive trading days during the period commencing August 24, 2013 and ending on (and including)
the Price Performance Date (Highest Average Price). If the Highest Average Price achieved equals
$52.51*, $60.37* or $68.99*, then the percentage of the 2011 Performance RSAs which vests on the
Price Performance Date is 33 1/3%, 66 2/3% or 100%, respectively. If the Highest Average Price
achieved falls between $52.51*, $60.37* and $68.99*, then the percentage of 2011 Performance RSAs
which vests is determined on a pro rata basis as follows:
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Highest Average Price* |
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Percentage of 2011 Performance RSA Shares Vesting |
$52.51
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33 1/3% |
Between $52.51 and $60.37
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Between 33 1/3% and 66 2/3% (an additional
increase of approximately 4.24% for each $1.00
increase in the Highest Average Price above
$52.51) |
$60.37
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66 2/3% |
Between $60.37 and $68.99
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Between 66 2/3% and 100% (an additional increase
of approximately 3.87% for each $1.00 increase
in the Highest Average Price above $60.37) |
$68.99 and above |
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100% |
In addition, if the closing share price of the Common Stock (Closing Price) is at or above
$52.51* on the Price Performance Date and none of the vesting criteria described above has yet been
satisfied, then 33 1/3% of the 2011 Performance RSAs will vest if and upon the closing share price
of the Common Stock being at or above $52.51* for a period of 20 consecutive trading days that
includes the Price Performance Date.
The 2011 Time Vest RSAs and 2010 Performance RSAs were granted pursuant to the Companys 2004 Stock
Incentive Plan, as amended (2004 Stock Incentive Plan). A form of standard Restricted Stock
Agreement generally used for the Companys 2004 Stock Incentive Plan is filed as Exhibit 10.3 to
the Companys Form 8-K filed with the Securities and Exchange Commission on March 2, 2005.
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The Highest Average Price and the Closing Price targets are subject to adjustment to reflect
stock splits, stock and cash dividends and other distributions or restructurings. |
Non-employee Director Equity Compensation. On February 10, 2011, the Board also
approved an annual equity grant of shares of Common Stock to the non-employee directors of the
Board. A summary of the current components of compensation for non-employee members of the Board,
including the equity grants approved on February 10, 2011, is attached as Exhibit 10.2 to this
report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
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Exhibit No. |
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Description |
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10.1 |
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2011 EMT Annual Incentive Plan |
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10.2 |
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Summary of Non-Employee Director Compensation |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CROWN CASTLE INTERNATIONAL CORP.
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By: |
/s/ E. Blake Hawk
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Name: |
E. Blake Hawk |
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Title: |
Executive Vice President
and General Counsel |
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Date: February 16, 2011
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EXHIBIT INDEX
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Exhibit No. |
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Description |
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10.1 |
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2011 EMT Annual Incentive Plan |
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10.2 |
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Summary of Non-Employee Director Compensation |
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Exhibit 10.1
Exhibit 10.1
2011 Executive Management Team Annual Incentive Plan
Plan Document
(Effective January 1, 2011)
© Copyright 2011 Crown Castle USA Inc. All rights reserved.
Crown Castle International Corp.
2011 EMT Annual Incentive Plan
Overview
This Plan Document is designed to outline the provisions of the Crown Castle International Corp.
(CCIC or Company) 2011 Executive Management Team (EMT) Annual Incentive Plan (the Plan)
effective as of the 1st day of January 2011, in accordance with the terms provided
herein.
The Company hereby adopts the terms of the Plan as follows:
Section 1. Objectives
The Companys main objectives for the Plan are:
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To provide a compensation package that is competitive with the market. |
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To motivate executives by providing the appropriate reward for individual and corporate performance
based on Company goals and objectives. |
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To focus business unit executives on maximizing results of their business units, while also
reinforcing the importance of teamwork at the corporate level. |
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To link the Plans financial measures with investor expectations. |
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To link the Plans financial and nonfinancial measures with the individual performance of the
executives. |
Section 2. Plan Year
The effective date of this Plan is January 1, 2011. The Plan will remain in effect from January 1,
2011, to December 31, 2011 (the Plan Year).
Section 3. Administration
The Plan shall be administered by the Compensation Committee (the Committee) of the Board of
Directors (the Board) with oversight by the Board. The Committee shall have the authority to
review and approve: (a) the Participants as defined in Section 4, (b) the incentive opportunities
for each Participant as defined in Section 6, (c) the methodology for determining the Performance
Goals as defined in Section 7, (d) the minimum performance requirements as described in Section 8,
and (e) the final Incentive Awards for the Participants as described in Section 9. The Committee
shall also have the authority to review and approve any proposed amendments to the Plan throughout
the Plan Year. The Committee retains the right to discontinue or amend this Plan at any time. The
Committee may use discretion to adjust the Incentive Award levels to account for events that impact
the ability to meet the Performance Goals described in Section 7.
The President & Chief Executive Officer of the Company (the CEO) will be responsible for the
interpretation and the day-to-day management of the Plan. The CEO shall also make recommendations
to the Committee for review and approval.
Nothing in this Plan is to be considered a guarantee of an Incentive Award.
© Copyright 2011 Crown Castle USA Inc. All rights reserved.
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Crown Castle International Corp.
2011 EMT Annual Incentive Plan
Section 4. Eligibility
Executive employees who are selected by the CEO, and are approved by the Committee, will be
eligible to participate in the Plan (the Participants).
Section 5. Change in Eligibility Status
In making decisions regarding employees participation in the Plan, the CEO may consider any
factors that he or she may consider relevant. The following guidelines are provided as general
information regarding employee status changes upon the occurrence of the events described below,
provided that recommendation to include an employee in the Plan originates from the CEO:
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New Hire, Transfer, Promotion. A newly hired, transferred or promoted employee
selected and approved as a Participant in the Plan prior to March 1 of the Plan Year may
participate based on a full Plan Year. A newly hired, transferred or promoted employee
selected and approved as a Participant in the Plan after March 1 and before November 1 of the
Plan Year may participate in the Plan on a pro rata basis as of the date the Participant was
approved into the Plan. A newly hired employee selected and approved as a Participant in the
Plan on or after November 1 of the Plan Year will not be eligible to participate in the Plan
until a new Plan Year begins the following January 1. |
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Demotion. An Incentive Award will generally not be made to an employee who has been
demoted during the Plan Year because of performance. |
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Termination. An Incentive Award will generally not be made to any Participant whose
services are terminated prior to the payment of the Incentive Award for reasons of misconduct,
failure to perform or other cause. |
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Resignation. An Incentive Award will generally not be made to any Participant who
resigns for any reason, including retirement, before the Incentive Award is made. However, if
the Participant has voluntarily terminated his or her employment with the Companys consent,
the Participant may be considered for a pro rata Incentive Award, provided the Participant
otherwise qualifies for the Incentive Award. |
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Death and Disability. A Participant whose status as an active employee is changed
prior to the payment of the Incentive Award for any reason other than the reasons cited above
may be considered for a pro rata Incentive Award, provided the Participant otherwise qualifies
for the Incentive Award. In the event that an Incentive Award is made on behalf of an
employee who has terminated employment by reason of death, any such payments or other amounts
due will generally be paid to the Participants estate. |
The above guidelines are subject to the terms of any applicable severance or similar agreements.
Nothing in the Plan shall confer any right to any employee to continue in the employ of the
Company.
© Copyright 2011 Crown Castle USA Inc. All rights reserved.
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Crown Castle International Corp.
2011 EMT Annual Incentive Plan
Section 6. Incentive Opportunity
The CEO will determine, and recommend for approval by the Committee, incentive opportunities for
each Participant. The incentive opportunities will be defined as
Incentive Opportunity Zones that represent a range of threshold, target and maximum performance
outcomes for which incremental increases in performance will result in incremental increases in the
Incentive Award.
Each Incentive Opportunity Zone will include threshold, target and maximum incentive opportunities.
The Participants target incentive opportunity will be based on the Participants role and
responsibilities, and will be expressed as a percentage of the Participants base salary. The
Participants threshold and maximum incentive opportunities will be expressed as a Payout Multiple
of the target incentive opportunity and will also be based on the Participants role and
responsibilities. The tables set forth on Exhibit A outline the target Payout Multiples
for certain Participant categories.
The target incentive opportunity as a multiple of base salary, and the resulting threshold and
maximum opportunities will be determined and approved in writing and kept on file for each
Participant in the appropriate Human Resources department.
Section 7. Performance Goals
Each Participant shall have specific performance goals (the Performance Goals) determined for his
or her position for the Plan Year. These Performance Goals will be based on certain financial and
nonfinancial performance measures that support the approved business plan of the Company and/or
business unit, and should identify how the Participant will support the achievement of such goals.
Two performance categories will generally be used for each Participant:
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Corporate/Business Unit Performance There will be one or more performance measures with
equal or different weights that may be used within this category, including without limitation
any one or more of the performance criteria described below: |
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Corporate Adjusted EBITDA calculated as EBITDA adjusted for non-cash
compensation. |
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Corporate Recurring Cash Flow per Share calculated as Recurring Cash Flow
divided by calendar year-end total CCIC common shares outstanding. |
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Business Unit Net New Sales calculated as Gross New Tenant GAAP Revenue
adjusted for Churn. |
The Performance Goals for these financial measures will generally be based on the Companys
2011 financial budget/forecasts as approved by the Board.
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Individual Performance The Individual Performance Goals will generally be based on those
established using the Companys annual performance management system. |
The target mix and weighting of the Performance Goals for each Participant will vary depending on
the Participants role and responsibilities, as set forth on Exhibit B.
© Copyright 2011 Crown Castle USA Inc. All rights reserved.
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Crown Castle International Corp.
2011 EMT Annual Incentive Plan
For the financial performance measures, threshold, target, and maximum Performance Goals will be
established and aligned within the Participants applicable Incentive
Opportunity Zone as defined above in Section 6. The threshold, target, and maximum Performance
Goals for these financial measures, based on the Companys budget/forecast for 2011 are set forth
on Exhibit C.
The threshold, target and maximum individual Performance Goals will be based on how well the
Participant met the goals established using the Companys annual performance management system.
The Individual Performance Goals will be aligned within the Participants applicable Incentive
Opportunity Zone. While the interpretation of how well the Individual Performance Goals are met
will be more subjective than for financial measures, the following descriptions will be used to
interpret individual performance:
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Exceeds Expectations Defined as performance that consistently exceeds established
expectations regarding the Participants key individual goals. Performance at this level
creates new standards of performance. Individual performance near or at the maximum will
be achieved if the participant has exhibited Exceeds Expectations performance. |
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Meets More Expectations - Defined as performance that consistently meets and often
exceeds established expectations regarding the Participants key individual goals.
Individual performance above target will be achieved if the Participant has exhibited
Meets More Expectations performance. |
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Meets Expectations - Defined as performance that consistently meets and sometimes
exceeds established expectations regarding the Participants key individual goals.
Individual performance at target will be achieved if the Participant has exhibited Meets
Expectations performance. |
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Meets Most Expectations - Defined as performance that often meets established
expectations regarding the Participants key individual goals, but also requires some
development. Individual performance near or at the minimum will be achieved if the
Participant has exhibited Meets Most Expectations performance. |
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Does Not Meet Expectations - Defined as performance that does not consistently meet
established expectations regarding the Participants key individual goals and requires
significant development. Individual performance at this level will result in no
individual annual incentive payment for the Participant. |
Section 8. Minimum Performance Requirements
There are three minimum performance requirements in order to receive a full Annual Incentive in
accordance with the Plan:
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The Minimum Financial Performance Target level set forth on Exhibit C must be
achieved for Participants to be eligible for the Annual Incentive. |
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The business units or departments for which the Participants are responsible must receive an
acceptable 404 assessment of applicable internal controls. The receipt of a 404 assessment
with a material weakness may result in a reduction or elimination of the potential 2011 Annual
Incentive for the responsible Participants and potentially all Participants. |
© Copyright 2011 Crown Castle USA Inc. All rights reserved.
5
Crown Castle International Corp.
2011 EMT Annual Incentive Plan
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The Participant must receive an Individual Performance Rating of Meets Expectations, Meets
More Expectations or Exceeds Expectations. If a Participant receives an Individual Performance
Rating of Meets Most Expectations, the Participants Payout Multiple for the
Corporate/Business Unit Performance Goals will be reduced to the lower of the Individual
Payout Multiple received for the Meets Most Expectations Rating or the Payout Multiple
received for the Corporate/Business Unit Performance Goals. If a Participant receives an
Individual Performance Rating of Does Not Meet Expectations, the Participant will not receive
an Annual Incentive Award. |
Section 9. Incentive Award Calculation
The Incentive Awards will be calculated based on the Incentive Opportunity Zones established for
each Participant at the beginning of the Plan Year. The Incentive Opportunity Zones can be
depicted as target Incentive Opportunity Curves that correlate the incentive Payout Multiples with
each of the Performance Goals.
The target Incentive Opportunity Curves for each of the Performance Goals are set forth on
Exhibit D.
At Plan Year-end, the following steps will occur to calculate each Participants final Incentive
Award:
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The actual performance results will be plotted on each applicable Incentive Opportunity
Curve for the Participant. |
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If actual performance results fall between the threshold and target, or the
target and maximum Performance Goals, the Payout Multiples will be calculated by
interpolating the actual performance results with the threshold, target, and maximum
Payout Multiples. However, no incentive will be paid if actual results fall below the
threshold Performance Goal. |
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Each of the resulting Payout Multiples will then be multiplied by
the weighted percentage for the applicable Performance Goal. |
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The products of each will then be added together to determine the
total Payout Multiple for the Participant. |
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The total Payout Multiple will then be applied to the
Participants target Incentive Award as a percentage of base
salary to determine the total Incentive Award. |
An illustration of how this calculation is performed is set forth on Exhibit E.
Section 10. Incentive Award Payments
Incentive Award payments in accordance with this Plan will be processed by the second pay period
following the Board of Directors approval of the Plan Years financial statements.
© Copyright 2011 Crown Castle USA Inc. All rights reserved.
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Exhibit 10.2
Exhibit 10.2
Crown Castle International Corp.
Summary of Non-Employee Director Compensation
Initial Equity Grant. Each newly appointed or elected non-employee director is
granted, pursuant to the Crown Castle International Corp. (Company) 2004 Stock Incentive Plan, as
amended, a number of unrestricted shares of common stock of the Company (Common Stock) having a
valuation equal to approximately $90,000, valued at the per share closing price of the Common Stock
as of the effective date of the directors appointment or election.
Annual Equity Grant. At the Boards first regularly scheduled meeting of each year,
each non-employee director is granted shares of Common Stock having a valuation equal to
approximately $125,000 ($200,000 in the case of the Chairman of the Board), valued at the per share
closing price of the Common Stock as of the date of such Board meeting. On February 10, 2011, the
Board granted (1) 2,756 shares of common stock (priced at $45.36, the closing price of the Common
Stock on February 10, 2011) to each non-employee director of the Board other than J. Landis Martin
and (2) 4,409 shares of common stock (priced at $45.36, the closing price of the Common Stock on
February 10, 2011) to J. Landis Martin for service as non-employee Chairman of the Board.
Retainers. Each non-employee director receives an annual retainer, paid in quarterly
installments, of $75,000 (plus (1) an additional $20,000, $10,000, $8,000 and $5,000 for the Chair
of the Audit Committee, Compensation Committee, Nominating & Corporate Governance Committee and
Strategy Committee, respectively, and (2) an additional $5,000 for each member of the Audit
Committee other than the Chair), and reimbursement of reasonable incidental expenses.
Other Benefits. Each non-employee director is eligible to participate, at such
directors cost and election, in the Companys medical and dental plans.
Employee Directors. A director who is also an employee of the Company receives no
additional compensation for services as a director.