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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Crown Castle International Corp.
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(Name of Registrant as Specified In Its Charter)
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Notes:
[CROWN CASTLE LOGO]
April 23, 2002
Dear Stockholder:
It is my pleasure to invite you to attend Crown Castle International Corp.'s
2002 Annual Meeting of Stockholders. The meeting will be held on Wednesday, May
29, 2002 at 9:00 a.m. local time in the Forest III Meeting Room of The
Houstonian Hotel, 111 North Post Oak Lane, Houston, Texas. The Notice of Annual
Meeting and Proxy Statement accompanying this letter describe the business to
be conducted at the meeting. The Proxy Statement and the accompanying form of
proxy are being mailed to the Company's stockholders on or about April 26,
2002.
During the meeting, Company officials will report to you on the Company's
financial performance and other activities during 2001 and the Company's goals
for 2002. The Board of Directors welcomes this opportunity to have a dialogue
with the Company's stockholders and looks forward to your comments and
questions.
If you are a stockholder of record who plans to attend the meeting, please mark
the appropriate box on your proxy card. If your shares are held by a bank,
broker or other intermediary and you plan to attend, please send written
notification to the Company's Corporate Secretary, 510 Bering Drive, Suite 500,
Houston, Texas 77057, and enclose evidence of your ownership (such as a letter
from the bank, broker or intermediary confirming your ownership or a bank or
brokerage firm account statement). The names of all those indicating they plan
to attend will be placed on an admission list held at the registration desk at
the entrance to the meeting.
It is important that your shares be represented at the meeting, regardless of
the number you may hold. Whether or not you plan to attend, please sign, date
and return your proxy card as soon as possible. This will not prevent you from
voting your shares in person if you are present.
I look forward to seeing you on May 29, 2002.
Kind Regards,
/s/ Ted B. Miller
Ted B. Miller, Jr.
Chairman of the Board
[CROWN CASTLE LOGO]
NOTICE OF ANNUAL MEETING of STOCKHOLDERS
Wednesday, May 29, 2002
9:00 a.m.
The Houstonian Hotel
111 North Post Oak Lane
Forest III Meeting Room
Houston, Texas 77024
April 23, 2002
Dear Stockholder:
You are invited to the Annual Meeting of Stockholders of Crown Castle
International Corp. (the "Company"). The Annual Meeting will be held at the
time and place noted above. At the meeting, the Company will ask you to:
. elect three class I directors: Dale N. Hatfield, Lee W. Hogan and Robert
F. McKenzie, each for a term of three years
. ratify the appointment of KPMG LLP as the Company's independent public
accountants for 2002
. vote on any other business properly before the Annual Meeting
Stockholders of record at the close of business on April 9, 2002, will be
entitled to vote at the Annual Meeting or any adjournment of the meeting. A
complete list of these stockholders will be open for examination by any
stockholder of record at the Company's principal executive offices at 510
Bering Drive, Suite 500, Houston, TX 77057 for a period of ten days prior to
the Annual Meeting. The list will also be available for examination by any
stockholder of record present at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR BOTH PROPOSALS.
Your vote is important. To be sure your vote counts and to assure a quorum,
please vote, sign, date and return the proxy card whether or not you plan to
attend the Annual Meeting.
By Order of the Board of Directors,
/s/ Donald J. Reid, Jr.
Donald J. Reid, Jr.
Corporate Secretary
Table of Contents
Page
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I. Information About Voting.......................................... 3
II. Proposals......................................................... 5
The Election of Directors......................................... 5
Ratification of Appointment of Independent Public Accountants..... 6
III. Board of Directors................................................ 7
Nominees for Director............................................. 7
Directors Continuing in Office.................................... 9
IV. Information About the Board of Directors.......................... 13
Meetings.......................................................... 13
Committees........................................................ 13
Board Compensation and Relationships.............................. 14
V. Executive Officers of the Company................................. 16
VI. Security Ownership of CCIC........................................ 18
Management Ownership.............................................. 18
Other Security Ownership.......................................... 21
VII. Executive Compensation............................................ 25
Summary Compensation Table........................................ 25
Option Grants in 2001............................................. 27
Aggregated Option Exercises in 2001 and Year-End Option Values.... 28
Employment, Termination and Change of Control Arrangements........ 29
Compensation Committee Report on Executive Compensation........... 31
Stockholder Return Performance Presentation....................... 35
VIII. Audit Committee Matters........................................... 36
Audit Committee Report for the Year Ended December 31, 2001....... 36
IX. Other Matters..................................................... 38
Section 16(a) Beneficial Ownership Reporting Compliance........... 38
Stockholder Proposals for 2003 Annual Meeting..................... 38
Expenses Relating to this Proxy Solicitation...................... 39
Appendix A, Audit Committee Charter...................................... A-1
2
I. INFORMATION ABOUT VOTING
Solicitation of Proxies. The Board of Directors ("Board") of Crown Castle
International Corp. ("CCIC" or the "Company") is soliciting proxies for use at
the 2002 Annual Meeting of CCIC ("Annual Meeting") and any adjournments of the
Annual Meeting. CCIC first sent this proxy statement, the accompanying form of
proxy and the CCIC Annual Report for 2001 to its stockholders on or about April
26, 2002.
Agenda Items. The agenda for the Annual Meeting is to:
1. Elect three class I directors for a term of three years;
2. Ratify the appointment of KPMG LLP as the Company's independent public
accountants for 2002; and
3. Conduct other business properly before the Annual Meeting.
Who can Vote. You can vote at the Annual Meeting if you are a holder on the
Record Date of CCIC's common stock, par value of $0.01 per share ("Common
Stock"), or CCIC's 8 1/4% Series A Cumulative Convertible Redeemable Preferred
Stock ("8 1/4% Convertible Preferred Stock"). The record date for determining
the stockholders entitled to notice of, and to vote at, the Annual Meeting is
the close of business on April 9, 2002 ("Record Date"). Holders of Common Stock
will have one vote for each share of Common Stock, and holders of 8 1/4%
Convertible Preferred Stock, which vote on an as converted basis, will have an
aggregate of 7,441,860 votes. As of the close of business on April 9, 2002,
there were 220,387,529 shares of Common Stock and 200,000 shares of 8 1/4%
Convertible Preferred Stock outstanding. As of the Record Date, the outstanding
shares of 8 1/4% Convertible Preferred Stock were convertible into an aggregate
of 7,441,860 shares of Common Stock. All outstanding shares of Common Stock are
entitled to vote, other than the 15,597,783 shares of Common Stock held by
Crown Atlantic Holding Company LLC and the 5,063,731 shares of common stock
held by Crown Castle GT Company LLC (the limited liability companies for CCIC's
joint ventures with certain indirect subsidiaries of Verizon Communications
Inc.), which are not entitled to vote or be counted for quorum purposes while
held by such ventures.
How to Vote. You may vote in two ways:
. You can come to the Annual Meeting and cast your vote there.
. You can vote by signing and returning the enclosed proxy card (or
contacting the internet or telephone voting service listed on your proxy
card). If you do, the individuals named on the card will vote your
shares in the manner you indicate.
Use of Proxies. Unless you tell the Board on the proxy card to vote
differently, the Board plans to vote all shares represented by the signed and
returned proxies FOR the Board nominees named herein and FOR the ratification
of the appointment of KPMG LLP as the
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Company's independent public accountants for 2002. The Company does not now
know of any other matters to come before the Annual Meeting. If they do, proxy
holders will vote the shares represented by the proxies in their best judgment.
Revoking a Proxy. You may revoke your proxy at any time before it is exercised.
You can revoke a proxy by:
. Sending a written notice of revocation to the Corporate Secretary of
CCIC;
. Delivering a properly executed, later-dated proxy; or
. Attending the Annual Meeting and voting in person.
The Quorum Requirement. A quorum of stockholders is needed to hold a valid
Annual Meeting. A quorum will exist to hold a valid Annual Meeting if the
holders of at least a majority in voting power of the outstanding shares of
Common Stock and 8 1/4% Convertible Preferred Stock entitled to vote at the
Annual Meeting either attend the Annual Meeting in person or are represented by
proxy. Abstentions and broker non-votes are counted as present for the purpose
of establishing a quorum. A broker non-vote occurs when a broker votes on some
matters on the proxy card but not on others because the broker has not received
voting instructions from its customer or does not have the authority to do so.
Vote Required for Action. Directors are elected (Proposal 1) by a plurality
vote of the holders of shares of Common Stock and the holders of 8 1/4%
Convertible Preferred Stock present in person or represented by proxy at the
Annual Meeting and entitled to vote on the election of directors, voting
together as a single class. The ratification of KPMG LLP as CCIC's independent
public accountants for 2002 (Proposal 2) requires the affirmative vote of the
holders of a majority of the voting power represented by the shares of Common
Stock and 8 1/4% Convertible Preferred Stock present in person or represented
by proxy at the Annual Meeting and entitled to vote on such matter, voting
together as a single class.
Generally, all other actions require the affirmative vote of a majority of the
voting power represented by shares of Common Stock and 8 1/4% Convertible
Preferred Stock present in person or represented by proxy at the Annual Meeting
and entitled to vote on such matters, voting together as a single class. With
respect to Proposal 1, abstentions and broker non-votes have no effect on
determinations of plurality, except to the extent that they affect the total
votes received by any particular candidate. Abstentions have the effect of a no
vote with respect to Proposal 2. Shares represented by broker non-votes will
not be considered to be present at the Annual Meeting for purposes of Proposal
2; therefore, broker non-votes will have the practical effect of reducing the
number of affirmative votes required to achieve a majority vote by reducing the
total number of shares from which the majority is calculated.
4
II. PROPOSALS
1. The Election of Directors
CCIC has three classes of directors of as nearly equal size as possible. The
term for each class is three years. Class terms expire on a rolling basis, so
that one class of directors is elected each year. The term for class I
directors expires at the 2002 Annual Meeting.
The nominees for class I directors this year are: Dale N. Hatfield, Lee W.
Hogan and Robert F. McKenzie.
The nominees have consented to be nominated and have expressed their intention
to serve if elected. The Board expects that each of the nominees for class I
directors will be able and willing to serve as directors. If any nominee is not
available, the proxies may be voted for another person nominated by the current
Board to fill the vacancy, or the size of the Board may be reduced. Information
about the nominees, the continuing directors and the Board is contained in the
next section of this proxy statement.
The Board of Directors recommends a vote FOR the election of Dale N. Hatfield,
Lee W. Hogan and Robert F. McKenzie as class I directors.
5
2. Ratification of Appointment of Independent Public Accountants
The Audit Committee of the Board has recommended that KPMG LLP continue to
serve as CCIC's independent public accountants for 2002. KPMG LLP has served as
CCIC's independent public accountants since 1995. An adverse vote will be
considered as a direction to the Audit Committee of the Board to select other
auditors for 2003.
The Company expects a representative of KPMG LLP to attend the Annual Meeting.
The representative will have an opportunity to make a statement if he or she
desires and also will be available to respond to appropriate questions.
Audit Fees. The aggregate fees, including out-of-pocket expenses, billed for
professional services rendered by KPMG LLP for the audit of the Company's
consolidated financial statements as of and for the year ended December 31,
2001, and the reviews of the Company's unaudited condensed consolidated interim
financial statements as of March 31, 2001, June 30, 2001, and September 30,
2001 were $400,000.
Financial Information Systems Design & Implementation Fees. KPMG LLP did not
engage in any activities or receive any fees for 2001 relating to designing or
implementing hardware or software systems that aggregate source data underlying
the financial statements or generate information that is significant to the
Company's financial statements taken as a whole.
All Other Fees. In addition to the fees described above, aggregate fees,
including out-of-pocket expenses, of $1,427,000 were paid to KPMG LLP during
the year ended December 31, 2001, primarily for the following professional
services: tax-related services ($677,000); due diligence for acquisitions
($166,000); registration statements ($165,000); and statutory and other audits
($419,000).
The Board of Directors recommends a vote FOR ratification of the appointment of
KPMG LLP as the Company's independent public accountants for the year 2002.
6
III. BOARD OF DIRECTORS
Nominees for Director
Class I--For a Term Expiring in 2005
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Dale N. Hatfield
Principal Occupation: Director of Interdisciplinary
Telecommunications, University of Colorado at Boulder
Age: 63
Director Since: 2001
[PHOTO OF DALE N. HATFIELD]
Dale N. Hatfield was appointed a Director of CCIC in July
2001. Mr. Hatfield has been the Chair of the Department of
Interdisciplinary Telecommunications at the University of
Colorado at Boulder since January 2001. Prior to his current
position, Mr. Hatfield was the Chief of the Office of
Engineering and Technology at the Federal Communications
Commission and, immediately before that, he was the agency's
Chief Technologist. He retired from the FCC and government service in December
2000. Before joining the FCC in December 1997, he was Chief Executive Officer
of Hatfield Associates, Inc., a Boulder, Colorado based multidisciplinary
telecommunications consulting firm. Prior to founding Hatfield Associates in
1982, Mr. Hatfield was Deputy Assistant Secretary of Commerce for
Communications and Information and Deputy Administrator of the National
Telecommunications and Information Administration ("NTIA"). Before moving to
NTIA, Mr. Hatfield was Chief of the Office of Plans and Policy at the FCC. Mr.
Hatfield has received numerous professional excellence awards from industry,
academia and government. Currently, Mr. Hatfield also serves on the Board of
Directors of KBDI TV-12 Public Television in Denver.
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Lee W. Hogan
Principal Occupation: Individual Investor
Age: 57
Director Since: 2001
[PHOTO OF LEE W. HOGAN]
Lee W. Hogan was appointed as a director of CCIC in March
2001. Mr. Hogan served as President and CEO of SFM Limited
from March 2001 to December 2001. Mr. Hogan served as an
officer and director of Reliant Energy Inc. ("Reliant"), a
public diversified international energy services and energy
delivery company, from 1990 to 2000. During his tenure at
Reliant, Mr. Hogan served as vice chairman and as one of four
members of The Office of the Chief Executive Officer, the
principal management policy instrument of Reliant. In addition, he served on
the finance committee of Reliant's Board of Directors. Previously, Mr. Hogan
served as CEO of Reliant's Retail Energy Group, president and CEO of Reliant's
International Business Group (directing energy operations in Asia, Europe and
Latin America), and in a variety of capacities for Reliant's Houston Lighting &
Power subsidiary. Mr. Hogan was the founding president of The Greater Houston
Partnership, a business advocacy organization, where he served from 1987 to
1990. During that same time, he was a member of the Board of Directors of St.
Luke's Episcopal Hospital, M.D. Anderson Cancer Center Outreach Corporation,
The Texas Medical Center and The Salvation Army.
7
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Robert F. McKenzie
Principal Occupation: Individual Investor
Age: 58
Director Since: 1995
[PHOTO OF ROBERT F. MCKENZIE]
Robert F. McKenzie was elected as a director of CCIC in 1995.
From 1990 to 1994, Mr. McKenzie was the Chief Operating
Officer and a director of OneComm, Inc., a mobile
communications provider that he helped found in 1990. From
1980 to 1990, he held general management positions with
Northern Telecom, Inc., a supplier of telecommunications
equipment, and was responsible for the marketing and support of its Meridian
Telephone Systems and Distributed Communications networks to businesses
throughout the Western United States. Since 1995, Mr. McKenzie has sought to
help develop telecommunications companies as an independent investor and a
director, including Cordillera Communications Corporation, CO Space and Velocom
Inc. Mr. McKenzie currently also serves on the Board of Directors of Vector
ESP, Inc., a private company that helps customers create and implement faster,
better and more effective information technology solutions.
8
Directors Continuing in Office
Class II--Term Expiring in 2003
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David L. Ivy
Principal Occupation: Individual Investor
Age: 55
Director Since: 1997
[PHOTO OF DAVID L. IVY]
David L. Ivy was elected as a director of CCIC in June 1997.
Mr. Ivy served as Vice Chairman--Global Mergers and
Acquisitions of CCIC from March 2000 to September 2000 and as
President of CCIC from August 1997 to March 2000. In
addition, from October 1996 to August 1997, he served as
Executive Vice President and Chief Financial Officer of CCIC.
From 1993 to 1995, Mr. Ivy was a senior executive with, and later the President
and Chief Operating Officer of J.E. Robert Companies, where he managed a joint
venture with Goldman, Sachs & Co. that was established to acquire distressed
assets from financial institutions. From 1987 to 1993, Mr. Ivy served as
Chairman of the Board of Directors of Interstate Realty Corporation.
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John P. Kelly
Principal Occupation: President and Chief Executive Officer
Age: 44
Director Since: 2000
[PHOTO OF JOHN P. KELLY]
John P. Kelly was elected as a director of CCIC in May 2000
and was appointed President and Chief Executive Officer of
CCIC in August 2001. Prior to his appointment as CEO, he
served as President and Chief Operating Officer of Crown
Castle. Mr. Kelly joined Crown Castle in July 1998, and was
named President and COO of Crown Communication, Inc. in
December of that year. From January 1990 to July 1998, Mr. Kelly was the
President and Chief Operating Officer of Atlantic Cellular Company L.P. From
December 1995 to July 1998, Mr. Kelly was also President and Chief Operating
Officer of Hawaiian Wireless, Inc., an affiliate of Atlantic Cellular. He
currently serves on the Board of Directors and is Vice Chairman of the Personal
Communications Industry Association ("PCIA") and serves as the Chairman of
PCIA's Site Owners and Managers Alliance.
9
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William D. Strittmatter
Principal Occupation: Vice President of GE Capital and
Managing Director--Telecommunications for the Structured
Finance Group of GE Capital
Age: 45
Director Since: 1999
[PHOTO OF WILLIAM D. STRITTMATTER]
William D. Strittmatter has been a director of CCIC since
November 1999. He is the Vice President of GE Capital and
Managing Director--Telecommunications for the Structured
Finance Group of GE Capital ("SFG"). Prior to his appointment
as Managing Director--Telecommunications for SFG, Mr. Strittmatter was Managing
Director and head of SFG's Commercial and Industrial financing business. Before
being appointed as a Managing Director of SFG, Mr. Strittmatter was SFG's Chief
Credit Officer. In that capacity, he was responsible for the worldwide credit
and risk management functions of SFG's project and structured financing
activities in the energy, infrastructure and industrial sectors. In addition,
Mr. Strittmatter was responsible for managing SFG's investment portfolio of
approximately $11 billion. Mr. Strittmatter joined GE Capital in 1982 and has
held various positions in finance, operations and marketing. From 1978 to 1980,
Mr. Strittmatter was a CPA with the Rochester, NY office of the accounting firm
Main Hurdman. Mr. Strittmatter is the nominee of GE Capital for election as a
director of CCIC pursuant to the terms of CCIC's 8 1/4% Convertible Preferred
Stock.
10
Directors Continuing in Office
Class III--Term Expiring in 2004
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Randall A. Hack
Principal Occupation: Senior Managing Director, Nassau
Capital
Age: 54
Director Since: 1997
[PHOTO OF RANDALL A. HACK]
Randall A. Hack was elected as a director of the Company in
February 1997. Since January 1995, Mr. Hack has served as a
Senior Managing Director of Nassau Capital L.L.C., an
investment firm that he co-founded. Nassau Capital manages a
$300 million portfolio of investments in private companies
exclusively on behalf of Princeton University's endowment.
From 1990 to January 1995, Mr. Hack served as President of
the Princeton University Investment Company ("PRINCO"), which
has management responsibility for Princeton's $8 billion endowment. From 1970
to 1988, he served as President and CEO of Matrix Development Company, a
commercial and industrial real estate development firm that he founded. Mr.
Hack holds a number of corporate directorships, including CompHealth Inc., a
private company engaged in comprehensive healthcare recruiting and staffing,
and Vector ESP, a private company that helps customers create and implement
faster, better and more effective information technology solutions. He is a
past trustee of the Princeton Medical Center and Princeton Day School and is
currently a trustee of The Quebec Labrador Foundation and Deerfield Academy.
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Edward C. Hutcheson, Jr.
Principal Occupation: Individual Investor and Consultant
Age: 56
Director Since: 1995
[PHOTO OF EDWARD C. HUTCHESON, JR.]
Edward C. Hutcheson, Jr. has served as a director of CCIC
from January 1995 until February 1999 and from July 1999
until the present. Mr. Hutcheson co-founded CCIC in 1994 and
served as Chairman of the Board or Chief Executive Officer
from its inception until March 1997. Since February 2000, Mr.
Hutcheson has been involved in private investment activities
and has provided consulting services to private companies
seeking capital. From March 1997 until February 2000, he
served in several capacities with Pinnacle Global Group, Inc. ("Pinnacle"), a
publicly owned financial services company, and its predecessor private
companies. He served as Chief Operating Officer of Pinnacle and was a Principal
of the merchant banking subsidiary of Pinnacle. During 1994, he was involved in
private investment activities leading to the creation of the predecessor to
CCIC. From 1987 through 1993, he served in senior management roles with Baroid
Corporation ("Baroid"), a publicly owned petroleum services company. His
positions included President, Chief Operating Officer and a director of Baroid
from 1990 through 1993. Mr. Hutcheson also serves on the Board of Directors of
Trico Marine Services (a publicly held provider of marine support vessels to
the oil and gas industry), Titanium Metals Corporation (a publicly held
integrated producer of titanium metals), Special Metals Corporation (a publicly
held producer of high performance nickel-based alloys and superalloys),
Pinnacle Management & Trust Co. (a full-service investment manager and trust
company and wholly owned subsidiary of the publicly held holding company
Sanders Morris Harris Group ("SMHG")) and Sanders Morris Harris (an investment
banking firm and wholly owned subsidiary of SMHG).
11
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J. Landis Martin
Principal Occupation: President and CEO, NL Industries,
Inc.;
Chairman and CEO, Titanium Metals Corporation
Age: 56
Director Since: 1995
[PHOTO OF J. LANDIS MARTIN]
J. Landis Martin has been a director of CCIC from 1995
through November 1998 and November 1999 to the present. Mr.
Martin has been Chairman and CEO of Titanium Metals
Corporation ("Timet"), a publicly held integrated producer of
titanium metals, since January 1995. Mr. Martin has served as
President and Chief Executive Officer of NL Industries, Inc. ("NL"), a publicly
held manufacturer and marketer of titanium dioxide chemicals, since 1987 and as
a director since 1986. Mr. Martin has served as Chairman of Tremont Corporation
("Tremont"), a holding company which primarily owns stock in Timet and NL,
since 1990 and as Chief Executive Officer and a director of Tremont since 1988.
From 1990 until its acquisition by Dresser Industries, Inc. ("Dresser") in
1994, Mr. Martin served as Chairman of the Board and Chief Executive Officer of
Baroid Corporation, a publicly owned petroleum services company. In addition to
Tremont and NL, Mr. Martin is also a director of Halliburton Company, a public
company engaged in the petroleum services, hydrocarbon processing and
engineering industries, Apartment Investment Management Corporation, a public
real estate investment trust, and Special Metals Corporation, a publicly held
producer of high performance nickel-based alloys and superalloys.
--------------------------------------------------------------------------------
Ted B. Miller, Jr.
Principal Occupation: Chairman of the Board
Age: 50
Director Since: 1995
[PHOTO OF TED B. MILLER JR.]
Ted B. Miller, Jr. has been Chairman of the Board since May
1999 and a director of CCIC since 1995. Mr. Miller co-founded
CCIC in 1994. He was the Chief Executive Officer of CCIC from
November 1996 to August 2001, President of CCIC from November
1996 to August 1997 and Vice Chairman of the Board from
August 1997 to May 1999. Mr. Miller was the Managing Director
and Chief Executive Officer of Crown Castle UK Holdings Limited (formerly known
as Castle Transmission Services (Holdings) Ltd) ("CCUK"), a subsidiary of CCIC,
from February 1997 to September 2001 and served as Chairman of the Board of
Directors of CCUK from August 1998 to September 2001. Prior to founding CCIC,
Mr. Miller was involved in the commercial real estate business for 20 years.
12
IV. INFORMATION ABOUT THE BOARD OF DIRECTORS
Meetings
During 2001, the Board held 6 regular meetings and 9 special meetings. All
incumbent directors attended at least 80% of the total number of meetings of
the Board during the period which they were a director, except Mr. Hatfield,
who attended 73% of such meetings. All incumbent directors attended all of the
meetings of all committees on which they served during the period which they
were a director, except Mr. McKenzie, who attended two of the three meetings of
the Compensation Committee held during 2001.
Committees
The Board has three standing committees: an Audit Committee, a Compensation
Committee and a Nominating Committee.
..Audit Committee
Duties:
.. Provide oversight relating to the Company's Financial Statements and
accounting practices and generally endeavor to (among other things):
. encourage procedures that promote sound accounting practices and systems
of internal controls
. review the adequacy and functionality of policies, procedures and
control mechanisms implemented by management relating to the risks of
the corporate finance function
. review reports from Company management relating to the Company's
financial reporting process and published financial statements
. review with management any material financial risk exposures and the
steps management has taken to monitor and control such exposures
.. Subject to confirmation by the Board, select, evaluate, and, where
appropriate, replace the independent external auditors
The Audit Committee's Charter, containing additional information regarding the
role of the Audit Committee is set forth in Appendix A to this Proxy Statement.
Members: Mr. Hogan (Chair), Mr. Hack, Mr. McKenzie and Mr. Strittmatter--all
independent directors
Number of Meetings in 2001: 5
13
..Compensation Committee
Duties:
. establish and monitor compensation for the Company's executive officers
. review and approve compensation policies and practices
. administer awards under the Company's compensatory plans
. review and make recommendations to the Board with regard to the
Company's overall compensation philosophy and objectives
Members: Mr. Martin (Chair), Mr. Hogan and Mr. McKenzie--all independent
directors
Number of Meetings in 2001: 3
..Nominating Committee
Duties:
. review and recommend candidates for director
. assess Board member performance
. review and approve director compensation policies
. monitor overall corporate governance
If a stockholder wishes to recommend a nominee for director, the recommendation
should be sent in a timely manner to the Corporate Secretary at the address
appearing on the notice of Annual Meeting (see "IX. Other Matters--Stockholder
Proposals for 2003 Annual Meeting"). All recommendations should be accompanied
by a complete statement of such person's qualifications and an indication of
the person's willingness to serve. All serious recommendations will be
considered by the Committee.
Members: Mr. Hutcheson (Chair), Mr. McKenzie and Mr. Hatfield--all independent
directors.
Number of Meetings in 2001: 4
Board Compensation and Relationships
.. Compensation Plan. Effective May 25, 2000, the Board adopted a compensation
arrangement for independent directors of CCIC. Effective the beginning of
2002, as further described below, the Board amended the compensation
arrangement with respect to independent directors serving as Chairmen of the
Board's committees.
14
.. Retainer and Fees. Each independent director of CCIC receives an annual
retainer of $20,000 ($25,000 for Board committee chairmen, effective 2002)
paid quarterly and reimbursement of reasonable incidental expenses. Each
independent director also receives $1,500 for each Board meeting attended
($500 if such meeting is held by conference call) and $1,500 for each Board
committee meeting attended (plus, in the case of Board committee Chairmen,
an additional $1,000 for each committee meeting after the fourth such
meeting in any given year, effective 2002).
.. Options. At the first Board meeting of each year, CCIC grants each
independent director an option to purchase 15,000 shares of Common Stock
pursuant to the Amended and Restated 1995 Stock Option Plan. In addition,
each new independent director is granted 25,000 options upon such director's
initial election or appointment to the Board. The exercise price of these
options equals the fair market value of the shares at the close of business
on the date of grant. The options have a 10-year life and are exercisable on
the date of grant. In 2001, CCIC granted each independent director an option
to purchase 15,000 shares at a price of $24.69 per share.
.. Other Compensation. Each independent director is eligible to participate at
his cost and election in the Company's medical and dental plans. Messrs. Ivy
and Miller receive certain additional benefits pursuant to their severance
arrangements with the Company (see "VII. Executive Compensation--Employment,
Termination and Change of Control Arrangements"). Each management director
receives no additional compensation for service as a director.
.. Certain Relationships and Related Transactions. On November 19, 1999, GE
Capital Structured Finance Group, or SFG, made a $200,000,000 strategic
investment in CCIC in exchange for 200,000 shares of CCIC's 8 1/4%
Convertible Preferred Stock and warrants to purchase 1,000,000 shares of
CCIC's Common Stock. The warrants have an exercise price of $26.875 per
share and are exercisable, in whole or in part, at any time for a period of
five years following the issue date. The net proceeds of this investment
were used to pay a portion of the purchase price for CCIC's transaction with
GTE Wireless. The certificate of designations relating to the 8 1/4%
Convertible Preferred Stock provides that so long as GE Capital or its
permitted transferees hold at least 50% of such 8 1/4% Convertible Preferred
Stock, GE Capital will have the right to designate one nominee to be a
member of the Board of Directors of CCIC. William D. Strittmatter has served
as a director of CCIC as the nominee of GE Capital since November 1999 and
is also Vice President of GE Capital and Managing Director--
Telecommunications for SFG.
David L. Ivy, Director of CCIC, and Edward W. Wallander, President and
Chief Operating Officer of Crown Castle USA Inc., are brothers-in-law.
15
V. EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information relating to the current executive
officers of the Company. Biographical information with respect to Mr. Kelly is
set forth above under "III. Board of Directors."
Name Age Position
---- --- --------
John P. Kelly................ 44 President and Chief Executive Officer
W. Benjamin Moreland......... 38 Senior Vice President, Chief Financial Officer
and Treasurer
E. Blake Hawk................ 52 Executive Vice President and General Counsel
Robert E. Giles.............. 54 Executive Vice President--Strategic Business
Units
Edward W. Wallander.......... 44 President and Chief Operating Officer, Crown
Castle USA Inc.
Peter G. Abery............... 54 President and Chief Operating Officer, Crown
Castle UK Limited
Kelli Hunter Cole............ 41 Senior Vice President--Human Capital
Michael T. Schueppert........ 35 Senior Vice President--Business Development
Robert E. Paladino........... 43 Senior Vice President--Global Performance
W. Benjamin Moreland was appointed Chief Financial Officer and Treasurer of
CCIC in April 2000. Prior to being appointed CFO, he had served as Senior Vice
President and Treasurer of CCIC and its domestic subsidiaries since October
1999. Mr. Moreland joined CCIC following 15 years with Chase Manhattan Bank,
primarily in corporate finance and real estate investment banking. He is
responsible for all treasury functions, banking relationships and general
corporate financing activities for CCIC.
E. Blake Hawk has been Executive Vice President and General Counsel of CCIC
since February 1999. Mr. Hawk was an attorney with Brown, Parker & Leahy, LLP
(now known as Thompson & Knight LLP) in Houston, Texas from 1980 to 1999 and
became a partner with the firm in 1986. Mr. Hawk received certification in tax
law by the Texas Board of Legal Specialization in 1984 and as a Certified
Public Accountant in 1976.
Robert E. Giles became Executive Vice President--Strategic Business Units of
CCIC effective January 2002. Prior to that time, he had served as President and
Chief Operating Officer of CCUK since April 2000. Mr. Giles served as Executive
Vice President and Chief Commercial Officer for CCUK from December 1999 until
April 2000. Mr. Giles has 27 years experience in the commercial real estate,
banking, and energy sectors. Prior to joining Crown Castle, Mr. Giles was
President of Title Network, Ltd., a real estate services firm that he owned in
partnership with Goldman Sachs.
Edward W. Wallander became President and Chief Operating Officer of Crown
Castle USA in April 2000. Prior to being appointed to these positions, Mr.
Wallander had served
16
as Senior Vice President and Chief Information Officer of CCIC since April
1998. From August 1990 to April 1998, Mr. Wallander worked for PNC Bank in
various capacities including Senior Vice President and Chief Operating Officer
of PNC Brokerage Corp. Prior to joining PNC Bank, Mr. Wallander was a
commercial real estate lender with Mellon Bank, N.A. and a Certified Public
Accountant for Ernst & Young, L.L.P.
Peter Abery became President and Managing Director of Crown Castle UK Limited
effective January 2002. Prior to that time, Mr. Abery had served as Managing
Director of Crown Castle Australia Holdings Pty Ltd. ("CCAL") and its
subsidiary, Crown Castle Australia Pty Ltd., since February 2000. From October
1997 to January 2000, Mr. Abery was Managing Director of Vodafone Network, a
wireless telecommunications company, in Australia. Prior to joining Vodafone,
Mr. Abery had held various positions with Telstra (a publicly traded Australian
telecommunications and information services company), including Managing
Director of Industry Services for Domestic Wholesale Business and Director of
Strategy, since 1993.
Kelli Hunter Cole was named Senior Vice President--Global Human Capital of CCIC
in January 2001 and directs CCIC's global human capital strategic initiatives.
Prior to joining CCIC, she served as Vice President of Global Human Resources
for Software Spectrum in Dallas from November 1998 to January 2001, where she
managed human resources responsibility for 2000 employees worldwide. From
September 1995 to November 1998, she was Vice President of Global Human
Resources, Operations for Mary Kay, Inc., where her responsibilities included
international compensation, benefits, organizational development and employee
communications.
Michael T. Schueppert was appointed Senior Vice President--Business Development
in July 2000. Prior to being appointed Senior Vice President, he had served as
Director of Sales & Marketing for CCUK since September 1997. Mr. Schueppert has
15 years experience in wireless communications and previously held a variety of
sales and marketing positions with Cable & Wireless (a publicly traded global
telecommunications company) in the UK and overseas.
Robert E. Paladino was appointed Senior Vice President--Global Performance of
CCIC in March 2002. Mr. Paladino heads CCIC's global performance improvement
programs to drive its operational excellence strategy. From 2000 to 2002, he
served as Vice President and Global Leader of the Telecommunications and
Utility Practice of the Balanced Scorecard Collaborative in affiliation with
Harvard Business School. Mr. Paladino was a Principal Consultant with
Pricewaterhouse Coopers from 1996 to 2000. Mr. Paladino is a Certified Public
Accountant and is a member of the AICPA and MSCPA.
17
VI. SECURITY OWNERSHIP OF CCIC
Management Ownership
The table below shows the beneficial ownership as of April 9, 2002 of CCIC's
capital stock held by each of the directors, nominees and executive officers of
CCIC and all directors and executive officers as a group. This table also gives
effect to shares that may be acquired pursuant to options, warrants or
convertible stock within 60 days after April 9, 2002.
Shares Beneficially
Owned
---------------------
Executive Officers and Directors(a) Title of Class Number Percent(b)
----------------------------------- ---------------- ---------- ----------
John P. Kelly(c)........................ Common Stock(d) 807,734 *
W. Benjamin Moreland.................... Common Stock(e) 207,237 *
E. Blake Hawk........................... Common Stock(f) 404,966 *
Robert E. Giles......................... Common Stock(g) 328,854 *
Edward W. Wallander(h).................. Common Stock(i) 252,421 *
Peter G. Abery (j)...................... Common Stock(k) 6,466 *
Kelli Hunter Cole....................... Common Stock(l) 20,000 *
Michael T. Schueppert................... Common Stock(m) 171,899 *
Robert E. Paladino...................... Common Stock -- --
Ted B. Miller, Jr.(n)................... Common Stock(o) 3,255,589 1.60
Randall A. Hack(p)...................... Common Stock(q) 191,780 *
Dale N. Hatfield(r)..................... Common Stock(s) 40,000 *
Lee W. Hogan(t)......................... Common Stock(u) 40,000 *
Edward C. Hutcheson, Jr.(v)............. Common Stock(w) 150,516 *
David L. Ivy(x)......................... Common Stock(y) 1,716,813 *
J. Landis Martin(z)..................... Common Stock(aa) 144,786 *
Robert F. McKenzie(bb).................. Common Stock(cc) 92,143 *
William D. Strittmatter(dd)............. Common Stock(ee) 8,486,860 4.80
Directors and Executive Officers as a
group
(18 persons total)..................... Common Stock(ff) 16,318,064 7.57
---------
* Less than 1%
(a) Except as otherwise indicated, the address of each person in this table is
c/o Crown Castle International Corp., 510 Bering Drive, Suite 500, Houston,
Texas 77057. Unless otherwise indicated, each of the persons listed in this
table may be deemed to have sole voting and investment power with respect
to the shares beneficially owned by such persons.
(b) Pursuant to SEC rules, Common Stock percentages are based on the number of
outstanding securities, but exclude the 15,597,783 shares of Common Stock
held by Crown Atlantic Holding Company LLC and the 5,063,731 shares of
Common Stock held by Crown Castle GT Holding Company LLC.
18
(c) Mr. Kelly's principal business address is c/o Crown Castle International
Corp., 2000 Corporate Drive, Canonsburg, Pennsylvania 15317.
(d) Includes options to purchase 786,724 shares of Common Stock.
(e) Includes options to purchase 197,237 shares of Common Stock.
(f) Includes (1) options to purchase 339,966 shares of Common Stock, (2)
options to purchase 30,000 shares of Common Stock held by a trust, of which
Mr. Hawk is the trustee, for the benefit of Mr. Hawk's child, and (3) 5,000
shares of Common Stock owned by Mr. Hawk's spouse, with respect to which
Mr. Hawk may be deemed to have shared voting and investment power.
(g) Includes options to purchase 318,854 shares of Common Stock.
(h) Mr. Wallander is the President and Chief Operating Officer of Crown Castle
USA, Inc., and his principal business address is 2000 Corporate Drive,
Canonsburg, Pennsylvania 15317.
(i) Includes options to purchase 242,421 shares of Common Stock.
(j) Mr. Abery is the President and Managing Director of Crown Castle UK
Limited, and his principal business address is Warwick Technology Park,
Gallows Hill, Warwick CV346TN, United Kingdom.
(k) Represents options to purchase 6,466 shares of Common Stock.
(l) Represents options to purchase 20,000 shares of Common Stock.
(m) Represents options to purchase 171,899 shares of Common Stock.
(n) Mr. Miller is chairman of the Board and served as Chief Executive Officer
through August 20, 2001. His principle business address is 510 Bering
Drive, Suite 300, Houston, Texas 77057.
(o) Includes options to purchase 3,255,589 shares of Common Stock. Excludes
99,995 shares of Common Stock held in trust for the benefit of Mr. Miller's
children.
(p) Mr. Hack's principal business address is c/o Nassau Capital LLC, 22
Chambers St., Princeton, New Jersey 08542.
(q) Includes (1) options to purchase 40,000 shares of Common Stock held by Mr.
Hack and (2) options to purchase 35,000 shares of Common Stock and warrants
to acquire 50,000 shares of Common Stock held by Nassau Capital LLC and its
affiliates. Mr. Hack disclaims beneficial ownership of the shares of Common
Stock represented by such options and warrants held by Nassau Capital LLC
and its affiliates.
(r) Mr. Hatfield's principal business address is University of Colorado at
Boulder, Engineering Center ECOT-317, Campus Box 530, Boulder, Colorado
80309-0530.
(s) Represents options to purchase 40,000 shares of Common Stock.
(t) Mr. Hogan's principal business address is 5312 Bayou Glen, Houston, Texas
77056.
(u) Represents options to purchase 40,000 shares of Common Stock.
19
(v) Mr. Hutcheson's principal business address is 5599 San Felipe, Suite 555,
Houston, Texas 77056.
(w) Includes options to purchase 50,000 shares of Common Stock. Excludes 10,000
shares of Common Stock held in a trust for the benefit of Mr. Hutcheson's
children.
(x) Mr. Ivy's principal business address is 5110 San Felipe #393W, Houston,
Texas 77056.
(y) Includes options to purchase 1,706,813 shares of Common Stock.
(z) Mr. Martin's principal business address is c/o Timet Corporation, 1999
Broadway, Suite 4300, Denver, Colorado 80202.
(aa) Includes options to purchase 45,000 shares of Common Stock, warrants to
acquire 8,000 shares of Common Stock, and 2,000 shares of Common Stock
held in a trust, of which Mr. Martin is the Trustee, for the benefit of
Mr. Martin's children.
(bb) Mr. McKenzie's principal business address is P. O. Box 3906, 1496 Bruce
Creek Road, Eagle, Colorado 81631.
(cc) Represents options to purchase 92,143 shares of Common Stock. Excludes
options to purchase 62,232 shares of Common Stock held by Mr. McKenzie
pursuant to a divorce agreement dated August 18, 2000 for the benefit of
his ex-wife; Mr. McKenzie disclaims beneficial ownership of such options
held for his ex-wife.
(dd) William D. Strittmatter's principal business address is c/o GE Capital,
120 Long Ridge Road, Stamford, Connecticut 06927.
(ee) Represents options to purchase 45,000 shares of Common Stock held by GE
Capital, warrants to acquire 1,000,000 shares of Common Stock held by GE
Capital and 7,441,860 shares of Common Stock issuable upon conversion of
the 200,000 shares of 8 1/4% Convertible Preferred Stock held by GE
Capital. Mr. Strittmatter disclaims beneficial ownership of such shares.
(ff) Includes options to purchase 7,463,112 shares of Common Stock, warrants to
acquire 1,058,000 shares of Common Stock and 7,441,860 shares of Common
Stock issuable upon conversion of the 8 1/4% Convertible Preferred Stock.
20
Other Security Ownership
The following is a tabulation as of April 9, 2002 of those stockholders of CCIC
who own beneficially in excess of 5% of each class of CCIC voting securities.
Shares Beneficially
Owned
---------------------
Beneficial Owner Title of Class Number Percent(a)
---------------- ---------------------- ---------- ----------
Janus Capital Corporation(b).... Common Stock 29,713,824 14.88
100 Fillmore Street
Denver, Colorado 80206-4923
Goldman Sachs Asset
Management(c).................. Common Stock 24,675,029 12.35
10 Hanover Square
New York, NY 10005
Capital Research and Management
Company(d)..................... Common Stock 22,579,540 11.31
333 South Hops Street
Los Angeles, California 90071
Salomon Brothers International
Limited(e)..................... Common Stock 17,713,536 8.87
Victoria Plaza
111 Buckingham Palace Road
London, England SW1W OSB
Verizon Communications Inc...... Common Stock 15,597,783 7.24
1095 Avenue of the Americas
New York, NY 10036
General Electric Capital
Corporation(g)................. 8 1/4% Cumulative 200,000 100.00
120 Long Ridge Road Convertible Redeemable
Stamford, CT 06927 Preferred Stock
---------
(a) Pursuant to SEC rules, except as noted below, Common Stock percentages are
based on the number of outstanding securities, but exclude the 15,597,783
shares of Common Stock held by Crown Atlantic Holding Company LLC and the
5,063,731 shares of Common Stock held by Crown Castle GT Holding Company
LLC, unless otherwise indicated.
(b) Based on an amendment to Schedule 13G filed on February 14, 2002, Janus
Capital Corporation reports sole voting and dispositive power with respect
to all such shares as a result of acting as investment advisor to various
investment companies and
21
individual and institutional clients. The Schedule 13G states that Janus
Capital does not have the right to receive dividends from, or the proceeds
from the sale of, the shares held by such entities and disclaims any
ownership associated with such rights. The Schedule 13G also indicates that
Thomas H. Bailey, President, Chief Executive Officer and Chairman of the
Board of Janus Capital, may be deemed to have the power to exercise or
direct the voting and/or dispositive power that Janus Capital may have over
such shares. Mr. Bailey specifically disclaims beneficial ownership over
such shares in the Schedule 13G. The number of shares reported by Janus
Capital Corporation includes 1,220,310 shares of Common Stock which may
result from the assumed conversion of 900,000 shares of the Company's 6.25%
Convertible Preferred Stock. Percentage ownership shown is based on the
number of shares of Common Stock outstanding as of April 9, 2002 rather than
February 14, 2002.
(c) Based on an amendment to Schedule 13G filed on February 14, 2002, Goldman
Sachs Asset Management, a separate operating unit of Goldman, Sachs & Co.,
reports sole dispositive power with respect to all such shares and sole
voting power with respect to 20,173,819 of such shares. The Schedule 13G
states that such shares reflect the securities beneficially owned by the
asset management unit of Goldman, Sachs & Co. Such asset management unit
disclaims beneficial ownership of the securities beneficially owned by (i)
any client accounts with respect to which it or its employees have voting
or investment discretion, or both, and (ii) certain investment entities,
of which its affiliate is the general partner, managing general partner or
other manager, to the extent interests in such entities are held by
persons other than such asset management unit. Percentage ownership shown
is based on the number of shares of Common Stock outstanding as of April
9, 2002 rather than February 14, 2002.
(d) Based on an amendment to Schedule 13G filed on February 11, 2002, Capital
Research and Management Company reports sole dispositive power with
respect to all such shares as a result of acting as investment advisor to
various investment companies. The Schedule 13G states that Capital
Research and Management disclaims beneficial ownership of such shares
pursuant to SEC Rule 13d-4. The number of shares reported by Capital
Research and Management includes 1,240,240 shares of Common Stock which
may result from the assumed conversion of 914,700 shares of the Company's
6.25% Convertible Preferred Stock. Percentage ownership shown is based on
the number of shares of Common Stock outstanding as of April 9, 2002
rather than February 11, 2002.
(e) Based upon an amendment to Schedule 13D filed on January 23, 2001, Salomon
Brothers International Limited ("SBIL"), Salomon Brothers Europe Limited
("SBEL"), Salomon International LLC ("SI"), Salomon Brothers Holding
Company Inc. ("SBHC"), Salomon Smith Barney Holdings Inc. ("SSBH"), and
Citigroup Inc. each report shared voting and dispositive power with
respect to the 17,713,536 shares
22
(the "Covered Shares"). In addition, the Schedule 13D indicates shared
voting and dispositive power of an additional 160,968 shares of Common Stock
by SBHC, reflecting securities beneficially owned by certain other
subsidiaries of SBHC (including securities convertible into Common Stock).
The Schedule 13D also indicates shared voting and dispositive of an
additional 246,710 shares of Common Stock by each of SSBH and Citigroup
Inc., reflecting securities beneficially owned by certain other subsidiaries
of SSBH and Citigroup Inc. (including securities convertible into Common
Stock).
The Schedule 13D states that on July 5, 2000, SBIL purchased the Covered
Shares from Transmission Future Networks B.V. ("TFN"), a wholly-owned
indirect subsidiary of France Telecom S.A. ("FT"). The acquisition of the
shares was made in connection with the disposition by FT and its affiliates
(including TFN) of their interests in the Company and its affiliates, in
accordance with a letter of undertakings between FT and the United Kingdom
Secretary of State for Trade and Industry.
Pursuant to a Disposition Agreement, dated as of May 17, 2000 and amended as
of June 5, 2000 (the "Disposition Agreement"), among the Company, CCUK, FT,
TFN, Telediffusion de France International S.A. and SBIL, SBIL agreed,
subject to certain exceptions, not to dispose of the Covered Shares prior to
June 8, 2001. Following such date, TFN is entitled, pursuant to a
Confirmation for Equity Swap Transaction, dated as of July 5, 2000 (the
"Swap Agreement"), among TFN, FT and SBIL, to direct SBIL to dispose of the
Covered Shares in a manner specified by TFN. Upon the occurrence of certain
events of default with respect to FT or TFN or certain other contingencies,
however, SBIL may sell the Covered Shares without TFN's direction. If the
Covered Shares have not been disposed of prior to June 8, 2002 (subject to
extension under certain circumstances set forth in the Disposition
Agreement), the Company will be entitled to direct SBIL to dispose of any
remaining Covered Shares. Pursuant to the Disposition Agreement, SBIL has
granted an irrevocable proxy to each of the general counsel and associate
general counsel of the Company to vote the Covered Shares in the same
proportion as the votes cast by or on behalf of all other holders of Common
Stock of the Company.
By reason of their relationship, Citigroup, SSBH, SBHC, SI and SBEL may be
deemed to share voting and dispositive power with respect to Common Stock
owned by SBIL. In addition, by reason of certain provisions in the
Disposition Agreement and the Swap Agreement described above, the Company
may be deemed to share voting power with respect to the Covered Shares held
by SBIL, and TFN, FT and the Company may be deemed to share dispositive
power with respect to the Covered Shares held by SBIL. Percentage ownership
shown is based on the number of shares of Common Stock outstanding as of
April 9, 2002 rather than January 23, 2001.
(f) Based on a Schedule 13D filed on April 9, 1999, Cellco Partnership
(currently doing business as Verizon Wireless), and Bell Atlantic
Corporation (predecessor in interest
23
to Verizon Communications Inc. ("Verizon")) report shared voting and
dispositive power with respect to all such shares. The 15,597,783 shares are
currently held by Crown Atlantic Holding Company LLC ("CA JV"), a joint
venture owned 56.9% by CCIC's subsidiary, CCA Investment Corp., and 43.1% by
an indirect subsidiary of Verizon (the "Verizon CA Sub"). Pursuant to the
terms of the agreements relating to the CA JV, the Verizon CA Sub may
trigger the dissolution of the joint venture at any time after March 31,
2002, at which time all shares of Common Stock held by the joint venture
will be distributed to the Verizon CA Sub. For purposes of the percentage
ownership calculation set forth in the table, the shares held by the CA JV
are included in the number of shares of Common Stock outstanding. The
Schedule 13D states that Verizon Wireless and Verizon disclaim beneficial
ownership of the 15,597,783 shares of Common Stock for all purposes other
than Section 13 of the Securities Exchange Act of 1934, as amended.
The number of shares set forth in the table with respect to Verizon excludes
the 5,063,731 shares of Common Stock held by Crown Castle GT Holding Company
LLC ("GT JV"), a joint venture owned 82.2% by CCIC's subsidiary, Crown
Castle GT Company LLC, and 17.8% by an indirect subsidiary of Verizon (the
"Verizon GT Sub"). Pursuant to the terms of the agreements relating to the
GT JV, the Verizon GT Sub may trigger the dissolution of the joint venture
at any time after January 31, 2003, at which time all shares of Common Stock
held by the GT JV will be distributed to the Verizon GT Sub. On or after
December 2, 2002 (60 days prior to January 31, 2003), Verizon may be deemed
to have shared voting and shared dispositive power with respect to the
aggregate 20,661,514 held by the CA JV and the GT JV, which amount would
constitute beneficial ownership of 9.38% of CCIC's Common Stock as of April
9, 2002. For purposes of the percentage ownership calculation in the
foregoing sentence, the shares held by the CA JV and the GT JV are included
in the number of shares of Common Stock outstanding.
(g) Represents all outstanding shares of 8 1/4% Convertible Preferred Stock.
Such shares of Preferred Stock are convertible into an aggregate of
7,441,860 shares of Common Stock and vote with the Common Stock in
proportion to the number of shares of Common Stock into which they are
convertible. General Electric Capital Corporation also holds warrants to
acquire 1,000,000 shares of Common Stock.
24
VII. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the cash and non-cash compensation paid by or
incurred on behalf of CCIC to all persons who served as Chief Executive Officer
during 2001 and the other four most highly paid executive officers for 2001.
Number of
Securities
Name and Principal Salary Bonus Underlying All Other
Position Year ($) ($) Options (#)(a) Compensation ($)
------------------ ---- -------- -------- -------------- ----------------
Ted B. Miller, Jr....... 2001 $286,540(b) $ -- 125,000 $3,358,223(b)
Chief Executive Officer 2000 325,000 325,000 362,420 10,200(c)
and Chairman of the 1999 325,000 325,000 595,219 9,600(c)
Board
John P. Kelly........... 2001 $325,000 $243,800 622,000 $ 10,200(c)
President and Chief 2000 275,000 206,250 205,086 10,200(c)
Executive Officer and 1999 235,000 176,250 423,431 8,827(c)
Director
W. Benjamin Moreland.... 2001 $245,000 $220,500 426,000 $ 10,200(c)
Senior Vice President, 2000 200,000 150,000 61,226 9,228(c)
Chief Financial Officer 1999 28,846(d) 25,000 250,000 --
and Treasurer
E. Blake Hawk........... 2001 $300,000 $225,000 276,000 $ 10,200(c)
Executive Vice 2000 200,000 150,000 284,719 10,200(c)
President 1999 169,230(e) 150,000 232,918 8,307(c)
and General Counsel
Peter G. Abery.......... 2001 $247,500 $173,000 200,000 $ 59,600(f)
President and Chief 2000 227,633(f) 160,000 13,859 92,600(f)
Operating Officer, CCUK 1999 -- -- -- --
Edward W. Wallander..... 2001 $255,000(g) $229,500 400,000 $ 10,200(c)
President and Chief 2000 200,000 150,000 166,026 10,200(c)
Operating Officer, 1999 180,000 135,000 64,264 7,061(c)
Crown Castle, USA
---------
(a) All awards are for options to purchase the number of shares of Common Stock
indicated.
(b) Mr. Miller resigned as Chief Executive Officer effective August 20, 2001.
Amount shown as All Other Compensation for 2001 represents (1) $5,100
received pursuant to matching contributions made by the Company in
accordance with the Company's 401K Plan and (2) $3,353,123 received
pursuant to severance arrangements with Mr. Miller (see "VII. Executive
Compensation--Termination and Change of Control Arrangements").
(c) Represents amounts received pursuant to matching contributions made by the
Company in accordance with the Company's 401K plan.
25
(d) Mr. Moreland began working for CCIC in October 1999, at an annual salary of
$150,000.
(e) Mr. Hawk began working for CCIC in February 1999, at an annual salary of
$200,000.
(f) Mr. Abery began working for Crown Castle Australia Pty Ltd. in February
2000, at an annual salary of Australian $375,000 (approximately $225,000);
Mr. Abery's salary was increased in July 2000 to Australian $425,000
(approximately $247,400). Mr. Abery was paid at an annual salary of
Australian $482,500 (approximately $247,500) during 2001. Amounts shown as
All Other compensation for Mr. Abery are comprised of allowance for motor
vehicle, superannuation contributions (Australian retirement benefits),
income protection insurance, and the payment of interest on certain
investment loans.
(g) Mr. Wallander's base salary was increased from $230,000 to $255,000 in
September 2001 in connection with his assumption of additional
responsibilities.
26
Option Grants in 2001
The following table provides details regarding stock options granted in 2001 to
executive officers named in the Summary Compensation Table. In addition, in
accordance with SEC rules, the hypothetical gains are shown that would exist
for the respective options based on assumed rates of annual compounded growth
in the stock price of 5% and 10% from the date the options were granted over
the full option term. The actual value, if any, an executive may realize will
depend on the spread between the market price and the exercise price on the
date the options are exercised.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
Individual Grants for Option Term(a)
--------------------------------------------- ---------------------
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ----------- ------------ -------- ---------- ---------- ----------
Ted B. Miller, Jr....... 125,000 1.9% $24.6880 8/20/06 $1,940,769 $4,918,289
John P. Kelly........... 32,000 0.5% $24.6880 2/22/11 $ 496,837 $1,259,082
590,000(b) 8.9% 8.7000 9/25/11 1,418,153 3,133,748
W. Benjamin Moreland.... 26,000 0.4% $24.6880 2/22/11 $ 403,680 $1,023,004
400,000(b) 6.0% 8.7000 9/25/11 961,460 2,124,575
E. Blake Hawk........... 26,000 0.4% $24.6880 2/22/11 $ 403,680 $1,023,004
250,000(b) 3.8% 8.7000 9/25/11 600,912 1,327,859
Peter G. Abery.......... 100,000(b) 1.5% $ 8.7000 9/25/11 $ 240,365 $ 531,144
100,000 1.5% 10.5000 10/15/11 660,339 1,673,430
Edward W. Wallander..... 75,000 1.1% $24.6880 2/22/11 $1,164,461 $2,950,974
325,000(b) 4.9% 8.7000 9/25/11 781,186 1,726,217
---------
(a) The potential realizable value assumes a per-share market price at the time
of the grant to be approximately equal to the exercise price with an
assumed rate of appreciation of 5% and 10%, respectively, compounded
annually for the term of the options.
(b) These options were granted as front-loaded performance options ("Front
Loaded Options"). The vesting terms relating to the Front Loaded Options
are more specifically described herein at "VII. Executive Compensation--
Compensation Committee Report on Executive Compensation." The expiration
date set forth above with respect to the Front Loaded Options assumes the
performance hurdle related to such options will be met; however, at the
assumed rate of appreciation of 5% and 10% described in footnote (a) above,
the performance hurdle would not be met and such options would expire five
years and one month after their date of grant.
27
Aggregated Option Exercises in 2001 And Year-End Option Values
The following table describes all option exercises in 2001 and details the
December 31, 2001 year end estimated value of unexercised stock options of each
of the executive officers named in the Summary Compensation Table. All
unexercised options are to purchase the number of shares of Common Stock
indicated.
Number of
Securities
Underlying Value of Unexercised
Unexercised In-the-Money Options
Shares Options at Year- at
Acquired on Value End (#) Year-End ($)
Exercise Realized Exercisable (E)/ Exercisable (E)/
Name (#) ($) Unexercisable (U) Unexercisable (U)(a)
---- ----------- ----------- ----------------- --------------------
Ted B. Miller, Jr....... 1,810,000 $15,206,600 3,255,589(E) $3,981,090(E)
--(U) --(U)
John P. Kelly........... -- $ -- 735,524(E) $ 664,941(E)
983,038(U) 1,196,642(U)
W. Benjamin Moreland.... -- $ -- 171,904(E) $ --(E)
565,322(U) 792,000(U)
E. Blake Hawk(b)........ -- $ -- 285,657(E) $ --(E)
507,980(U) 495,000(U)
Peter G. Abery.......... -- $ -- 6,466(E) $ --(E)
207,393(U) 216,000(U)
Edward W. Wallander..... -- $ -- 190,520(E) $ 242,516(E)
526,033(U) 675,300(U)
---------
(a) The estimated value of unexercised in-the-money stock options held at the
end of 2001 assumes a per-share fair market value of $10.68 and per-share
exercise prices ranging from $5.775 to $39.75 as applicable.
(b) Exercisable options shown for Mr. Hawk include 30,000 options held in trust
for the benefit of Mr. Hawk's child.
28
Employment, Termination and Change of Control Arrangements
.. Severance Agreements. Under severance agreements entered into with each of
the executive officers named above in "VII. Executive Compensation--Summary
Compensation Table", CCIC is required to provide severance benefits to these
executive officers if they are terminated without cause (as defined in the
severance agreements) or they terminate their employment with good reason (as
defined in the severance agreements) (collectively, a "qualifying
termination"). The severance agreements provide for enhanced severance
benefits if the executive officers incur a qualifying termination within the
two-year period following a change in control (as defined in the severance
agreements). Upon a qualifying termination that does not occur during the
change in control period, an eligible executive officer is entitled to:
. a lump sum payment equal to two times the sum of his base salary and
annual bonus,
. a prorated cash amount equal to his annual bonus for the year of
termination,
. continued coverage under specified welfare benefit programs for two
years, and
. immediate vesting of any outstanding options and restricted stock
awards.
Upon a qualifying termination during the change in control period, an
eligible executive officer is entitled to:
. receive a lump sum payment equal to three times the sum of his base
salary and annual bonus,
. continued coverage under specified welfare benefit programs for three
years, and
. immediate vesting of any outstanding options (which remain exercisable
for two years following employment or service as a director, if
applicable) and restricted stock awards.
.. Stock Options. All unvested stock options granted to executive officers vest
upon a change in control. The accelerated vesting provisions relating to a
change in control are contained in the individual stock option agreements.
.. Additional Severance Arrangements. During 2001, the Company also negotiated a
separate severance arrangement for Ted B. Miller, Jr, who resigned as Chief
Executive Officer of the Company effective August 20, 2001. Pursuant to the
terms of the severance arrangement, Mr. Miller received:
. an amount in cash equal to three times the sum of his base salary and
annual bonus at the time of his resignation,
. an amount in cash equal to his annual bonus for 2001, pro rated for the
time during which he served as an executive officer in 2001,
29
. continued coverage under specified welfare benefit programs for three
years, and
. immediate vesting of any outstanding options, which remain exercisable
until five years following the date Mr. Miller ceases to serve on the
Board.
.. Employment Agreement. The Company has entered into an employment agreement
with Peter G. Abery in connection with Mr. Abery's appointment as President
and Managing Director of CCUK. The contract has a term from January 1, 2002
through December 2004. The agreement provides that Mr. Abery shall receive
the following compensation during the term:
. base salary of $250,000 per year,
. eligibility for an annual bonus of 75% of base salary provided
performance hurdles are met,
. options to purchase 100,000 shares of the Company's common stock at an
exercise price of $10.50 per share,
. bonus of $75,000 to be paid upon completion of the term,
. health care and other employee welfare benefits, and
. access to an employee vehicle, and relocation, career transition and
housing assistance.
30
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors reviews, evaluates and
establishes the salary levels of corporate executive officers (the chief
executive officer ("CEO"), officers reporting directly to the CEO, and certain
other officers--currently 10 persons) and administers CCIC's stock option and
other compensatory plans. The current members of the Committee are J. Landis
Martin, Chairman, Lee W. Hogan and Robert F. McKenzie. The following report
presents the Committee's summary of CCIC's compensation programs and policies
and describes the bases for compensation of CCIC's executive officers and its
CEO.
.. Goals. The principal goals of CCIC's executive compensation policy are to
provide competitive compensation opportunities to attract and retain
qualified and productive executive employees; to motivate executives to meet
and exceed corporate financial goals; and to create meaningful links between
corporate performance, individual performance and rewards. It has been CCIC's
traditional executive compensation policy that a significant portion of the
compensation paid to the executive officers should be based on CCIC's results
of operations and the growth in value of its equity. CCIC's executive officer
compensation program is designed to align executive officer compensation with
stockholder interests. Specifically, the program seeks to:
. incentivize and reward executive officers for sound business management
and improvement in stockholder value
. balance its components so that the accomplishment of short-term and
long-term operating and strategic objectives is encouraged and
recognized
. encourage achieving objectives within a team environment
. attract, motivate and retain executive officers necessary for the long-
term success of CCIC
.. Compensation Program. For the year 2001, as in prior years, the Compensation
Committee reviewed the compensation programs of certain competitors and
"peers" in similar industries. All of the companies used by the Compensation
Committee as the peer group for evaluating CCIC's executive officer
compensation offer base salary, stock options and bonuses. Some of the
companies used by the Committee as the peer group are among those included in
the Communications Services, NEC index contained in the Stockholder Return
Performance Presentation graph set forth on page 35 of this proxy statement.
The Committee believes that using stock options and performance-based
bonuses matches executive officers' interests with those of the
stockholders. The market price of CCIC's stock must increase in order for an
executive officer to receive the value of a stock option. Therefore, CCIC's
operating goals and individual incentives are targeted towards those
activities that increase stockholder value. If CCIC does not perform, the
options are of less value and performance-based bonuses are reduced.
31
In the Committee's assessment of compensation levels, the Committee takes
into consideration performance relative to the individual responsibilities
of the executive officers and considerations of internal equity, as well as
the financial performance of CCIC relative to its goals. The Committee also
considers the competitiveness of the entire executive compensation package
and each of its individual components. The Committee reviews CCIC's overall
performance and each executive officer individually to determine salary and
bonus adjustments and to determine stock awards.
.. Salaries. The Committee approves the annual salaries for all executive
officers of CCIC. The Committee reviews recommendations made by the CEO with
regard to salary adjustments for executive officers other than himself, and
then either approves or amends these recommended salary adjustments. The
Committee independently reviews performance of the CEO and determines an
appropriate salary based on the criteria set forth above, as well as input
from outside compensation consultants and other sources. In 2001, the
Committee retained the services of Towers Perrin to review CCIC's overall
compensation packages for executive officers. The majority of the executive
officers received adjustments to their base salaries for 2001 to more closely
align their compensation with the market analysis prepared by Towers Perrin.
.. Incentive Compensation. Each year, the Committee approves incentive bonuses
for the executive officers of CCIC using similar methodologies to those
employed in evaluating salaries for the executive officers. As in prior
years, achievement of certain performance targets, such as the improvement of
earnings before interest, taxes, depreciation and amortization, were used by
the Committee in awarding bonuses for 2001. Depending on the level at which
the performance goals are met, the CEO and the other executive officers
generally are eligible for cash bonuses approximating 50 to 100 percent of
their base salaries. Bonuses were paid to executive officers for 2001 based
upon the level at which their respective business segments achieved
performance goals; in addition, bonuses were also paid to certain persons for
significant individual contributions.
.. Stock Options. Historically, the CCIC executive officers were granted
discretionary annual incentive stock options pursuant to the Amended and
Restated 1995 Stock Option Plan, based upon individual and corporate
performance. In addition, the Committee had historically granted stock
options to executive officers from time to time pursuant to a discretionary
option pool (the "Option Pool") of up to 1.29% of the purchase price or deal
value for major acquisitions, mergers, new business initiatives and similar
transactions that were consistent with CCIC's mission statement and long-term
business plans. Following the approval of the 2001 Stock Incentive Plan at
the annual stockholders' meeting held on June 5, 2001, the Committee
terminated the Option Pool.
Following a change in certain management positions, the Board in September
2001 (following review and recommendation by the Committee) granted certain
front-loaded
32
performance accelerated options under the Amended and Restated 1995 Stock
Option Plan ("Front-Loaded Options") to the CEO, John P. Kelly, the other
executive officers and certain other key employees of CCIC. The number of
Front-Loaded Options granted to each recipient was approximately equal to
the number of options which would have otherwise been expected to be granted
to such individual as annual incentive stock options for the years 2001,
2002 and 2003. The Front-Loaded Options have an exercise price equal to
$8.70 per share, the closing share price of the CCIC common stock on the
date of grant.
In the absence of the achievement of the Performance Hurdle (defined below),
the Front-Loaded Options vest on the fifth anniversary of the date of grant
and expire one month thereafter. The vesting of the Front-Loaded Options is
accelerated as follows upon CCIC common stock reaching a target price of
$20.00 per share for twenty consecutive trading days (the "Performance
Hurdle"):
Hurdle Met Within: Vesting Schedule:
------------------ ----------------------------------------------------
1st year of grant date 25% on first four anniversaries of grant
1st and 2nd anniversary
of grant 33% on second, third and fourth anniversary of grant
2nd and 3rd anniversary
of grant 50% on third and fourth anniversary of grant
3rd and 4th anniversary
of grant 100% on fourth anniversary of grant
4th and 5th anniversary
of grant 100% on date performance hurdle met
Absent special circumstances, it is not expected that individuals who
received Front-Loaded Options under this program will receive annual
incentive options for 2002 or 2003.
.. Compensation of the Chief Executive Officer. During 2001, Ted B. Miller, Jr.
served as CEO of CCIC from January 1, 2001 until August 20, 2001;
thereafter, John P. Kelly served as CEO.
For 2001, the Committee set Mr. Miller's base salary at $500,000, $286,540
of which had been paid through August 20, 2001. In determining the level of
Mr. Miller's salary, the Committee considered the market in which CCIC
competes, the compensation of similarly situated officers at certain
competitors and "peers" in similar industries, CCIC's performance in 2000
and Mr. Miller's contributions to corporate performance. Mr. Miller did not
receive non-qualified stock options under the company's annual incentive
stock option program for 2001, as he was not serving as CEO at the end of
2001. In connection with Mr. Miller's resignation as CEO, and in connection
with his severance arrangement, CCIC provided Mr. Miller an aggregate
severance of $3,353,123 in cash (calculated as three years' base salary and
bonus and an amount equal to his pro rated annual target bonus for 2001),
three years of medical, dental, vision, disability and death benefits, and
the vesting of all stock options held by Mr. Miller with an exercise period
of five years after he ceases to serve on the Board (see "VII. Executive
Compensation--Employment, Termination and Change of Control Arrangements").
33
Mr. Kelly began 2001 as President and Chief Operating Officer of CCIC. The
Committee set Mr. Kelly's base salary for that position at $325,000. At Mr.
Kelly's request, the Committee did not increase his salary for 2001
following his appointment as CEO on August 20, 2001. Mr. Kelly also received
a bonus of $243,800 (or 75% of his base salary) for his service during 2001;
again, this amount reflects the amount he otherwise would have received had
he not assumed the additional responsibilities of CEO. In addition, in 2001,
the Company granted Mr. Kelly Front-Loaded Options to purchase 590,000
shares of common stock of the Company having an exercise price equal to
$8.70 and subject to the vesting terms described above under "Stock
Options". In determining the level of Mr. Kelly's salary, bonus and Front
Loaded Option grant, the Committee considered the market in which CCIC
competes, the compensation of similarly situated officers at certain
competitors and "peers" in similar industries, CCIC's performance in 2000,
Mr. Kelly's contributions to corporate performance, and Mr. Kelly's request
that his cash compensation not be increased for 2001 following his
appointment as CEO.
.. Summary. The Committee has considered the impact of Section 162(m) of the
Code regarding the corporate limitations on deducting certain compensation
expenses. It is the Committee's intent to adopt policies to obtain maximum
tax deductibility of executive compensation consistent with providing
motivational and competitive compensation, which is truly performance-based.
However, it is also the Committee's intent to balance the effectiveness of
its plans and compensation policies against the materiality of any possible
lost deductions.
The Committee believes that CCIC's executive compensation policies and
programs serve the interests of the stockholders and the Company
effectively. The Committee believes the various compensation programs are
appropriately balanced to provide motivation for executives to contribute to
CCIC's overall success and enhance the value of CCIC for the stockholders'
benefit. When performance goals are met or exceeded, resulting in increased
value to stockholders, executives are rewarded commensurately. The Committee
will continue to monitor the effectiveness of CCIC's total compensation
program and continue to make proposals where appropriate, in order to meet
the current and future needs of CCIC.
COMPENSATION COMMITTEE
J. Landis Martin, Chairman
Lee W. Hogan
Robert F. McKenzie
34
Stockholder Return Performance Presentation
The following chart compares the yearly percentage change in the cumulative
stockholder return on CCIC's Common Stock against the cumulative total return
of the NASDAQ Market Index, the NYSE Market Value Index and SIC Code Index
(Communications Services, NEC) for the period commencing August 18, 1998 (the
date the Company went public) and ending December 31, 2001. The Company's
Common Stock was traded on the NASDAQ NMS from August 18, 1998 until April 25,
2001, at which time the Company's Common Stock began trading on the New York
Stock Exchange under the symbol "CCI."
[PERFORMANCE CHART APPEARS HERE]
Crown Castle Communications NASDAQ Market
------------ -------------- -------------
08/18/1998 100.00 100.00 100.00
12/31/1998 180.77 115.81 147.73
12/31/1998 247.12 163.13 260.55
12/29/2000 208.18 83.50 163.76
12/31/2001 82.15 35.20 130.54
35
VIII. AUDIT COMMITTEE MATTERS
The Board has established an Audit Committee comprised entirely of independent
directors, as defined in the rules and regulations of the New York Stock
Exchange Listed Company Manual. Upon the recommendation of the Audit Committee
and in compliance with the regulations of the NYSE, the Board has adopted an
Audit Committee Charter setting forth the requirements for the composition of
the Audit Committee, the qualifications of its members and the responsibilities
of the Audit Committee. The Audit Committee Charter is set forth in Appendix A
to this proxy statement.
In addition, in accordance with regulations promulgated by the SEC, the Audit
Committee has issued the following report.
Audit Committee Report for the Year Ended December 31, 2001
To our Stockholders:
Management has the primary responsibility for preparing the Company's financial
statements and implementing the Company's reporting process, including the
Company's system of internal controls. On behalf of the Board of Directors, the
Audit Committee, among other duties, performs an oversight role relating to the
Company's financial reporting processes and systems of internal control, the
independence and the performance of the independent accountants, and the
performance of the internal accountants.
Management has represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed the consolidated financial statements with management and the
independent accountants. The Audit Committee has discussed with the independent
accountants their evaluation of the accounting principles, practices and
judgments applied by management, and the Committee has discussed any items
required to be communicated to it by the independent accountants in accordance
with standards established by the American Institute of Certified Public
Accountants (including Statement on Auditing Standards 61).
The Audit Committee has received from the independent accountants a letter
describing any relationships with the Company that may bear on their
independence (as required by Independence Standards Board Standard No. 1) and
has discussed with the independent accountants the accountants' independence
from the Company and its management. The Committee has reviewed the audit fees
of the independent accountants. It has also reviewed non-audit services and
fees to assure compliance with the Company's and the Committee's policies
restricting the independent accountants from performing services that might
impair their independence.
36
The Audit Committee discussed with the Company's independent accountants the
overall scope of and plans for their audit. The Committee has met with the
independent accountants, separately and together, with and without management
present, to discuss the Company's financial reporting processes and internal
controls. The Committee has reviewed significant audit findings prepared by the
independent accountants and those prepared by the Company's staff, together
with management's responses.
Based on its reviews of the Company's audited financial statements and the
discussions with management and the independent accountants referred to above,
the Audit Committee recommended to the Board of Directors the inclusion of the
audited consolidated financial statements in the Company's Annual Report on
Form 10-K for the year ended December 31, 2001.
AUDIT COMMITTEE
Lee W. Hogan, Chairman
Randall A. Hack
Robert F. McKenzie
William D. Strittmatter
37
IX. OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires CCIC's directors
and executive officers, and persons who own more than 10% of a registered class
of CCIC's equity securities, to file with the SEC and the NYSE reports of
ownership and changes in ownership of Common Stock and other equity securities
of CCIC. Executive officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based on a review of copies of such reports furnished to the Company and
written representations that no other reports were required, the Company
believes that, during the 2001 fiscal year, CCIC's executive officers,
directors and greater than 10% beneficial owners complied with all Section
16(a) filing requirements applicable to them, except (i) Randall A. Hack filed
a Form 5 for 2001 late relating to one transaction, (ii) Ted B. Miller, Jr.
filed a Form 4 late relating to four transactions which took place in November
2001, and (iii) Dale N. Hatfield filed a Form 3 late relating to his
appointment as a director.
Stockholder Proposals for 2003 Annual Meeting
Stockholders wishing to have a proposal included in the Board's 2003 proxy
statement must submit the proposal so that the corporate secretary of CCIC
receives it at CCIC's principal executive offices no later than December 24,
2002. If the date of the 2003 Annual Meeting is changed by more than 30 days
from the date of the 2002 Annual Meeting, the deadline for submitting proposals
to be included in the Board's 2003 proxy statement will be a reasonable time
before the Company begins to print and mail its proxy materials for its 2003
Annual Meeting.
Stockholders may make nominations for directors and introduce proposals or
other business to be considered at the 2003 Annual Meeting provided such
nominations and proposals are in accordance with CCIC's bylaws and involve
proper matters for stockholder action. Such stockholder nominations and
proposals and other business for the 2003 Annual Meeting must be received not
less than 90 days (February 28, 2003) nor more than 120 days (January 29, 2003)
before May 29, 2003 (which will then be the first anniversary of the preceding
year's meeting) at CCIC's principal executive offices, 510 Bering, Suite 500,
Houston, TX 77057, Attn: Corporate Secretary. If the 2003 Annual Meeting is
advanced by more than 30 days, or delayed by more than 90 days, from the date
of the 2002 Annual Meeting, the nomination or proposal must be delivered not
earlier than the 120th day prior to the 2003 Annual Meeting and not later than
the later of the 90th day prior to the 2003 Annual Meeting or the 10th day
following the announcement of the change in the 2003 Annual Meeting date. The
notice of nominations for the election of directors must set forth certain
information concerning the stockholder
38
giving the notice and each nominee. A copy of the applicable bylaw provision
may be obtained, without charge, upon written request to the Corporate
Secretary.
If the date of the 2003 Annual Meeting is advanced or delayed by more than 30
calendar days from the date of the 2002 Annual Meeting, the Company shall, in a
timely manner, inform shareholders of such change, by including a notice, under
Item 5, in its earliest possible quarterly report on Form 10-Q. The notice will
include the new deadline for submitting proposals to be included in the Board's
2003 proxy statement and the new date for determining whether the Company has
received timely notice of a nomination or proposal.
Expenses Relating to this Proxy Solicitation
CCIC will pay all expenses relating to this proxy solicitation. In addition to
this solicitation by mail, CCIC officers, directors, and employees may solicit
proxies by telephone or personal call without extra compensation for that
activity. CCIC also expects to reimburse banks, brokers and other persons for
reasonable out-of-pocket expenses in forwarding proxy material to beneficial
owners of CCIC stock and obtaining the proxies of those owners.
The Company will furnish without charge to each person whose proxy is being
solicited, upon request of any such person, a copy of the Annual Report on Form
10-K for the fiscal year ended December 31, 2001 as filed with the Securities
and Exchange Commission, including the financial statements and schedules
thereto, but not the exhibits. Requests for copies of such report should be
directed to Donald J. Reid, Jr., Corporate Secretary, Crown Castle
International Corp., 510 Bering Drive, Suite 500, Houston, Texas 77057. Copies
of any exhibit to the Form 10-K will be forwarded upon receipt of a written
request with respect thereto addressed to Mr. Reid.
The Board invites you to attend the Annual Meeting in person. If you are unable
to do so, please sign, date and return the enclosed proxy promptly in the
enclosed envelope, so that your shares will be represented at the Annual
Meeting.
By Order of the Board of Directors,
/s/ Donald J. Reid, Jr.
Donald J. Reid, Jr.
Corporate Secretary
39
Appendix A
CROWN CASTLE INTERNATIONAL CORP.
AUDIT COMMITTEE CHARTER
The Audit Committee (the "Committee") is established by the Board of
Directors ("Board") of Crown Castle international Corp. ("Company") to assist
the Board in its fiduciary responsibilities to the Company's shareholders. The
Committee's function is an oversight role relating to the Company's financial
statements and accounting practices. In its oversight function, the Committee
is neither intended nor equipped to guarantee to the Board, the Shareholders
or any other person the accuracy and quality of the Company's financial
statements and accounting practices. Proper accounting, financial reporting,
and audit functions are a collaborative effort among internal and external
professionals.
In connection with the Committee's oversight function, it should generally
endeavor to:
1. Encourage procedures that promote (i) sound accounting practices and
systems of internal controls, (ii) reasonable allocation of human
resources to the accounting and external auditing processes and (iii)
appropriate relations with the independent external auditors
("Auditors").
2. Review the adequacy and functionality of policies, procedures and
control mechanisms implemented by management relating to the risks of
the corporate finance function.
3. Review reports from Company management ("Management") relating to the
Company's financial reporting process and published financial
statements.
4. Promote effective communication among Management, the Board, the
Committee and the Auditors.
5. Review with Management any material financial risk exposures, including
risks resulting from technology, security or business operations, and
the steps Management has taken to monitor and control such exposures.
6. Review the adequacy of human resources and expertise in the financial
accounting and reporting process as well as the external auditing
process.
7. Review reports from Management relating to legal and regulatory matters
that may have a material impact on the Company's financial statements
and compliance policies.
8. Review reports from and consult with the Company's accounting
department as to on-going monitoring programs, compliance with policies
and other accounting issues or controls.
A-1
9. Subject to confirmation by the Board, select, evaluate, and, where
appropriate, replace the Auditors. The Committee will endeavor to:
. recommend as necessary the appointment of the Auditors to the Board
for its approval, based upon periodic performance and Auditor
independence evaluations;
. periodically review the independence of the Auditors by obtaining a
formal written statement delineating all relationships between
Auditors and the Company, including non-audit related services and
fees;
. periodically discuss with the Auditors concerns relating to the
Auditors' objectivity and independence; and
. recommend, if necessary, that the Board take appropriate action
relating to the independence of the Auditors.
10. Review with the Auditors the accounting principles and policies of the
Company and matters discussed in the Auditors' report to the Committee
including comments relating to the system of internal controls,
published financial statements and related disclosures, the adequacy of
the financial reporting process and the scope of the independent audit.
The Auditors are ultimately responsible to the Board and the Committee.
11. Prepare a report, for inclusion in the Company's proxy statement,
disclosing that the Committee reviewed and discussed the audited
financial statements with management and discussed certain matters with
the Auditors. Based upon these discussions, the report will state
whether the Committee recommends or recommended to the Board that the
audited financial statements be included in the Company's Annual Report
or any other reports.
12. Review the Committee's charter on a periodic basis and submit any
revisions deemed necessary or appropriate to the Board for its
consideration and approval.
The Committee shall be comprised of no fewer than three independent members
of the Board. A Chairperson shall be designated by the Board from among the
members of the Committee. The members of the Committee shall be financially
literate with at least one having accounting or related financial management
expertise. Management, the Auditors, outside counsel and other persons may
attend each meeting or portions thereof as required or permitted by the
Committee. Regular meetings of the Committee shall be held at such times as
determined by resolution of the Board or the Committee. A special meeting of
the Committee shall be called by resolution of the Board or by the Secretary or
Assistant Secretary of the Company upon the request of the Chairperson or a
majority of the members of the Committee. A majority of the members, but not
less than two, will constitute a quorum. A majority of the members present at
any meeting at which a quorum is present may act on behalf of the Committee.
A-2
Principal Executive Offices Notice of
Crown Castle International Corp. Annual Meeting of Stockholders
510 Bering, Suite 500 May 29, 2002
Houston, TX 77057 and Proxy Statement
[Crown Castle Logo]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES AND PROPOSALS ABOVE AND IF NO SPECIFICATION IS MADE, THE SHARES WILL BE
VOTED FOR SUCH NOMINEES AND PROPOSALS.
1. Election of Directors, Nominees: Dale [ ] For All [ ] Withhold All
N. Hatfield, Lee W. Hogan, Robert F. McKenzie
For all, except nominee(s) written in below: [ ] For All Except
2. The ratification of the appointment of KPMG LLP [ ] For [ ] Against [ ] Abstain
as the Company's independent certified public
accountants for 2002.
3. In their discretion, upon such other matters as
may properly come before the meeting.
INTERNET
By checking the box to the right, I consent to future delivery of annual reports, [ ]
proxy statements, prospectuses and other materials and shareholder communications
electronically via the internet at a webpage which will be disclosed to me. I
understand that the Company may no longer distribute printed materials to me
from any future shareholder meeting until such consent is revoked. I understand
that I may revoke my consent at any time by contacting the Company's transfer
agent, Mellon Investor Services LLC, Ridgefield Park, NJ and that costs
normally associated with electronic delivery, such as usage and telephone
charges as well as any costs I may incur in printing documents, will be my
responsibility.
If you plan to attend the Annual Meeting please mark the WILL ATTEND box WILL
ATTEND
[ ]
Signature_________________________________ Signature_____________________________________ Dated___________________________, 2002
Signature should agree with name printed hereon. If stock is held in the name of more than one person, EACH joint owner should sign.
Executors, administrators, trustees, guardians, and attorneys should indicate the capacity in which they sign. Attorneys should
submit powers of attorney.
------------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO ANNUAL MEETING DAY.
YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES IN THE SAME MANNER
AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
INTERNET TELEPHONE MAIL
http://www.eproxy.com.cci 1-800-435-6710
Use the Internet to vote your proxy. Use any touch-tone telephone to vote your Mark, sign and date
Have your proxy card in hand when you proxy. Have your proxy card in hand when your proxy card
access the web site. You will be OR you call. You will be prompted to enter OR and
prompted to enter your control number, your control number, located in the box return it in the
located in the box below, to create below, and then follow the directions enclosed postage-paid
and submit an electronic ballot. given. envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
CROWN CASTLE INTERNATIONAL CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON MAY 29, 2002
The undersigned stockholder acknowledges receipt of the Notice of Annual
Meeting of Stockholders and the Proxy Statement, each dated April 23, 2002, and
hereby appoints John P. Kelly and Donald J. Reid, Jr., or either of them,
proxies for the undersigned, each with full power of substitution, to vote all
of the undersigned's shares of common stock of Crown Castle International Corp.
(the "Company") at the Annual Meeting of Stockholders of the Company to be held
in the Forest III Meeting Room of the Houstonian Hotel, 111 North Post Oak Lane,
Houston, Texas, on Wednesday, May 29, 2002 at 9:00 a.m., Central Time, and at
any adjournments or postponements thereof.
PLEASE SIGN, DATE AND RETURN THE PROXY IN THE ENVELOPE ENCLOSED. THIS PROXY
WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES IN ITEM 1,
FOR PROPOSAL 2, AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT TO ITEM 3. THIS
PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
(Please sign on reverse side)