2022 Proxy Statement Summary
Corporate Governance Highlights
We recognize the importance of a robust corporate governance framework to promote the interests of our stockholders. Our corporate governance highlights include:
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ü Annual election of directors by majority vote | ü Stock ownership and retention guidelines |
ü 8 out of 10 independent director nominees | ü Annual Board and committee evaluations |
ü Range of director nominee tenures | ü One-share, one-vote standard |
ü Separate Board Chair and CEO | ü Mandatory retirement age (72 years of age)(a) |
ü Regular Board executive sessions | ü Proxy access |
ü Board diversity | ü No poison pill |
(a) Subject to the Board-approved transition plan. For additional information on the retirement policy and the transition plan, see "V. Information About the Board of Directors—Board Committees—Nominating, Environmental, Social and Governance Committee—Consideration of Director Nominees."
2021 Business Performance Highlights
We delivered another strong year of results for 2021, adding to our long history of consistently delivering attractive growth. We continue to believe our ability to offer towers, small cells and fiber solutions, which are all integral components of communications networks and are shared among multiple tenants, provides us the best opportunity to generate significant growth while delivering high returns for our stockholders.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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2022 Proxy Statement Summary
2021 Environmental, Social and Governance Highlights
We consider the environmental, social and governance ("ESG") impact of our business and integrate ESG into our business practices and decision-making. For over 25 years, we have met the increased need for data and connectivity through a shared infrastructure model. We build once and use our infrastructure for multiple tenants, resulting in the use of fewer resources – including water, energy, metals and other materials – than would otherwise be needed to construct and maintain communications infrastructure.
Environmental
We are not resting on our strong foundation and have set goals aligned with our commitment to continue to reduce the impact from our assets and operations on the environment and the communities in which we operate.
Social
In 2021, we established a supplier diversity goal and have taken steps toward realizing our vision to build an inclusive and diverse community.
Governance
We have continued to build upon our strong corporate governance framework by expanding the diversity, expertise and oversight responsibilities of our Board and continuing to safeguard our corporate network and the data it stores.
Additional information regarding our sustainability initiatives and progress is available through the investor section of our website at crowncastle.com/investors/corporate-sustainability. The information on our website, including our most recent ESG Report, is not, and shall not be deemed to be, incorporated by reference into this Proxy Statement or any other filings with the Securities and Exchange Commission ("SEC") unless expressly noted in any such other filings.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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2022 Proxy Statement Summary
Pay-for-Performance
Rewarding improvement in our financial and operating results and the creation of stockholder value are key characteristics of our compensation philosophy, which serves as the foundation of our executive compensation program. To align the interests of our executives with those of our stockholders, the focus of our executive compensation program is on incentive compensation that emphasizes "pay-for-performance," rewarding our executives for performance against pre-established financial goals and total stockholder return ("TSR"). Our executive compensation program is discussed in detail in section "VIII. Executive Compensation" starting on page 45.
Alignment of Pay and Performance
We seek to align the interests of our named executive officers ("NEOs"), including our chief executive officer ("CEO"), with the interests of our stockholders. Our executive compensation program aligns a significant portion of our NEOs' compensation with the total return experienced by our stockholders. The graph below illustrates the alignment between our CEO's compensation and the returns experienced by our stockholders over the last three years.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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2022 Proxy Statement Summary
Say-on-Pay
Our stockholders have historically approved our say-on-pay proposal at a high rate, with approximately 97% of votes cast in favor of our executive compensation program at our 2021 annual meeting of stockholders. For the past five years, the average stockholder approval of our executive compensation program exceeded 98%.
2021 Pay Components
As part of our executive compensation program, we provide our NEOs with base salary, short-term incentives and long-term incentives. We allocate compensation among these components based on our belief that the majority of executive compensation should be paid in the form of performance-based, variable compensation, with a greater emphasis on "at risk" pay for senior executives who have greater responsibility for the business.
As illustrated below, the compensation pay mix for our CEO and our other NEOs during 2021 reflects our objectives of linking pay to performance and aligning executives' interests with those of our stockholders. The compensation pay mix for "All Other NEOs" reflects the average compensation for all of our NEOs as a group, excluding the CEO, for 2021. For an individual breakdown of the compensation allocation for each of our NEOs, see "VIII. Executive Compensation—Compensation Disclosure and Analysis—Elements of Executive Compensation and Benefits" starting on page 48.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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2022 Proxy Statement Summary
The following illustrates the make-up of, and performance metrics attributable to, the short-term and long-term incentives awarded to our NEOs. For additional information on the short-term and long-term incentives, see "VIII. Executive Compensation—Compensation Discussion and Analysis—Elements of Executive Compensation and Benefits."
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Unless this Proxy Statement indicates otherwise or the context otherwise requires, the terms, "we," "our," "our Company," "the Company" or "us" as used in this Proxy Statement refer to Crown Castle International Corp. and its predecessor (organized in 1995), as applicable, each a Delaware corporation (together, "Crown Castle International Corp.").
II. INFORMATION ABOUT THE ANNUAL MEETING
Who Is Soliciting Proxies?
The Board of Crown Castle International Corp. is soliciting proxies for use at our Annual Meeting and any adjournments or postponements of the Annual Meeting. This Proxy Statement, the form of proxy and our 2021 Form 10-K are being distributed or made available via the Internet to our stockholders on or about April 4, 2022.
Why Did I Receive a "Notice of Internet Availability of Proxy Materials"?
Pursuant to SEC rules regarding the electronic distribution of proxy materials, we have elected to provide access to our proxy materials on the Internet, instead of mailing the full set of printed proxy materials, which allows us to reduce costs associated with the Annual Meeting. On or about April 4, 2022, we intend to send to most of our stockholders a Notice of Internet Availability of Proxy Materials ("Proxy Materials Notice") containing instructions on how to access our Proxy Statement and 2021 Form 10-K and how to submit a proxy. If you receive a Proxy Materials Notice, you will not receive a printed copy of the proxy materials in the mail unless you request it. If you would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Proxy Materials Notice.
What are the Agenda Items for Consideration at the Annual Meeting?
The agenda for the Annual Meeting is to consider and vote upon the following matters:
• the election of 10 director nominees for a one-year term;
• the ratification of the appointment of PricewaterhouseCoopers LLP ("PwC") as our independent registered public accountants for fiscal year 2022;
• a proposal to approve our 2022 Long-Term Incentive Plan ("2022 LTIP");
• an amendment to our Restated Certificate of Incorporation ("Charter") to increase the number of authorized shares of Common Stock;
• a non-binding, advisory vote to approve the compensation of our named executive officers; and
• such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
How Can I Attend the Annual Meeting?
The Annual Meeting will be held on Thursday, May 19, 2022 at 9:00 a.m. Central Time at our offices located at 8020 Katy Freeway, Houston, Texas 77024. Although we currently intend to hold the Annual Meeting in person, we are monitoring public health and safety concerns relating to COVID-19. If we determine that it is not possible or advisable to hold the Annual Meeting in person, we will announce alternative arrangements, including any changes to the format, date or time of the Annual Meeting, through a press release posted on our investor relations website at investor.crowncastle.com and additional proxy materials filed with the SEC.
To support the health and well-being of our stockholders, employees, directors and other meeting attendees, attendees will be required to follow health and safety protocols consistent with then applicable procedures, guidelines, mandates or recommendations. These protocols may include the use of face coverings, providing proof of vaccination and maintaining appropriate social distances, which we will outline on our investor relations website at investor.crowncastle.com in advance of the Annual Meeting. In advance of the Annual Meeting, attendees will be required to complete a health self-assessment form located at visitoraccess.crowncastle.com. We reserve the right to refuse entry to any attendees who fail to follow these required protocols.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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You may attend and participate at the Annual Meeting if you are (1) a stockholder of record as of the close of business on March 21, 2022 ("Record Date"), (2) a legal proxy for a stockholder of record as of the Record Date or (3) a beneficial owner with evidence of ownership as of the Record Date (such as a letter from the bank, broker or other nominee through which you hold your shares confirming your ownership or a bank or brokerage firm account statement). If you are a stockholder of record who plans to attend the Annual Meeting, please mark the appropriate box on your proxy card (or note your intention to attend when prompted via Internet or telephone proxy submission). For all attendees, a valid picture identification must be presented in order to attend the meeting.
If you are a beneficial owner and plan to attend the Annual Meeting, please send written notification in advance of the Annual Meeting to our Corporate Secretary at Crown Castle International Corp., 8020 Katy Freeway, Houston, Texas 77024, and enclose a copy of (1) evidence of your ownership as of the Record Date or (2) a legal proxy, executed in your favor, from the institution through which you hold your shares.
Even if you plan to attend the Annual Meeting, we encourage you to vote your shares in advance of the Annual Meeting by one of the ways identified in "II. Information About the Annual Meeting—How to Do I Vote?" below. If you are a participant in the Crown Castle International Corp. 401(k) Plan ("401(k) Plan"), you must vote by the applicable deadline prior to the Annual Meeting. For further information on how to vote as a participant of the 401(k) Plan and the applicable deadline for voting, see "II. Information About the Annual Meeting—How Do I Vote as a Participant in the Crown Castle International Corp. 401(k) Plan?".
Who Is Entitled to Vote at the Annual Meeting?
You can vote at the Annual Meeting if you are, on the Record Date, a holder of record of our common stock, par value of $0.01 per share ("Common Stock"). In addition, if you are a beneficial owner of our Common Stock, you may vote your shares at the Annual Meeting if you obtain a legal proxy, executed in your favor, from the bank, broker or other nominee through which you hold your shares and present it at the Annual Meeting. To request a legal proxy, please follow the instructions at the website listed on the Proxy Materials Notice.
Holders of Common Stock will have one vote for each share of Common Stock owned of record as of the Record Date. As of the close of business on the Record Date, there were 433,029,630 shares of Common Stock outstanding.
Is There a List of Stockholders Entitled to Vote at the Annual Meeting?
A complete list of the stockholders of record entitled to vote at the meeting will be available for examination, during ordinary business hours, by any stockholder of record at our offices located at 8020 Katy Freeway, Houston, Texas 77024 for a period of 10 days prior to the Annual Meeting. The list will also be available for examination by any stockholder of record present at the Annual Meeting.
How Do I Vote?
You may submit your proxy for your shares in any of the following ways:
•Mail. If you receive a printed proxy card or voting instruction form, mark, sign, date and return the proxy card or voting instruction form (see instructions on the Proxy Materials Notice on how to request a printed proxy card or voting instruction form).
•Phone. Call 1-800-690-6903 to submit a proxy by telephone.
•Internet. Prior to the Annual Meeting, you can vote by visiting www.proxyvote.com.
Alternatively, you may vote in person at the Annual Meeting. As noted above in "II. Information About the Annual Meeting—Who is Entitled to Vote at the Annual Meeting?," if you are a beneficial owner whose shares are held in the name of a bank, broker or other nominee, you must obtain a legal proxy, executed in your favor, from the stockholder of record (that is, your bank, broker or nominee) to be able to vote at the Annual Meeting.
Have your Proxy Materials Notice, proxy card or voting instruction form in front of you when submitting a proxy by telephone or the Internet. It contains important information that is required to access the system. You must submit your proxy by 11:59 p.m. Eastern Time on May 18, 2022. As always, we encourage you to vote your shares prior to the Annual Meeting.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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How Do I Vote as a Participant in the Crown Castle International Corp. 401(k) Plan?
If you are a participant in the 401(k) Plan, your proxy card, or a proxy submitted by telephone or through the Internet, will also serve as voting instructions to Charles Schwab Bank, as trustee for the 401(k) Plan ("Trustee"), with respect to shares of Common Stock allocable to your 401(k) Plan account as of the Record Date.
If you provide voting instructions with respect to shares of Common Stock allocable to your 401(k) Plan account, the Trustee will vote those shares in the manner specified. If you fail to provide timely instructions, the independent fiduciary for the 401(k) Plan will instruct the Trustee to vote such shares of Common Stock in the same proportion as shares of Common Stock for which voting instructions have been timely and properly received from other 401(k) Plan participants, unless required by applicable law to exercise discretion in voting such shares.
To allow sufficient time for the Trustee to vote your shares, voting instructions from 401(k) Plan participants must be received by 11:59 p.m. Eastern Time on May 16, 2022.
How Will My Shares Be Voted at the Annual Meeting?
All proxies that have been timely and properly submitted – whether by Internet, telephone or mail – and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy card but do not give voting instructions, the shares represented by that proxy will be voted as recommended by the Board. The Board recommends the following vote for each of the proposals to be considered and voted upon at the Annual Meeting:
• FOR the election of each of the director nominees named in this Proxy Statement (Proposal 1);
• FOR the ratification of the appointment of PwC as our independent registered public accountants for fiscal year 2022 (Proposal 2);
• FOR the proposal to approve our 2022 LTIP (Proposal 3);
• FOR an amendment to our Charter to increase the number of authorized shares of Common Stock (Proposal 4); and
• FOR the non-binding, advisory vote to approve the compensation of our named executive officers (Proposal 5).
If any other matters are properly presented at the Annual Meeting for consideration and if you have submitted a proxy for your shares by Internet, telephone or mail, the persons named as proxies in the proxy card will have the discretion to vote on those matters in their judgment for you. As of the date we filed this Proxy Statement with the SEC, we do not know of any other matters to be raised at the Annual Meeting.
What Can I Do If I Change My Mind After I Vote?
You may change your vote by revoking your proxy at any time before it is exercised. If you are a stockholder of record, you can revoke your proxy by:
• delivering a timely written notice of revocation to our Corporate Secretary, Crown Castle International Corp., 8020 Katy Freeway, Houston, Texas 77024;
• submitting a timely, later-dated proxy by Internet, telephone or mail (see instructions on your Proxy Materials Notice, proxy card or voting instruction form); or
• attending the Annual Meeting and voting. Attendance at the meeting alone will not constitute a revocation of a proxy.
If you are a beneficial owner whose shares are held in the name of a bank, broker or other nominee, you may revoke your voting instructions by submitting new voting instructions to your bank, broker or other nominee before the applicable deadline indicated in "II. Information About the Annual Meeting—How Do I Vote?". Alternatively, if you have obtained a legal proxy from your bank, broker or other nominee giving you the right to vote your shares, you may change your vote by attending the Annual Meeting and voting in person.
If you are a participant in the 401(k) Plan, you may revoke your voting instructions by submitting new voting instructions to the Trustee on or before the applicable deadline indicated in "II. Information About the Annual Meeting—How Do I Vote as a Participant in the Crown Castle International Corp. 401(k) Plan?".
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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What Is a Quorum for the Annual Meeting?
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 entitled to vote at the Annual Meeting 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.
What Are the Voting Requirements for Each Proposal?
Each director shall be elected (Proposal 1) by a majority of the votes cast by the holders of shares of Common Stock entitled to vote and present in person or represented by proxy (a majority of the votes cast means that, to be elected, the number of votes cast "for" a nominee must exceed the number of votes cast "against" the nominee). The affirmative vote of the holders of a majority of the voting power of the shares of Common Stock present in person or represented by proxy at the annual meeting and entitled to vote on such matter is required to approve each of (1) the ratification of PwC as our independent registered public accountants for fiscal year 2022 (Proposal 2) and (2) the non-binding, advisory resolution to approve the compensation of our named executive officers (Proposal 5). The proposal to approve our 2022 LTIP shall be approved by a majority of the votes cast (Proposal 3). The affirmative vote of the holders of a majority of the outstanding shares of Common Stock is required to approve the amendment to our Charter to increase the number of authorized shares of Common Stock (Proposal 4).
With respect to all proposals other than (1) the election of directors (Proposal 1), (2) the approval of the 2022 LTIP (Proposal 3) and (3) the amendment to our Charter to increase the number of authorized shares of Common Stock (Proposal 4), abstentions have the same effect as votes against, and broker non-votes have no effect. With respect to the election of directors, abstentions and broker non-votes are not counted as a vote cast "for" or "against" a nominee. With respect to the proposal to approve our 2022 LTIP, abstentions and broker non-votes are not counted as votes "for" or "against" the proposal and therefore have no effect on the vote. With respect to the proposal to amend our Charter to increase the number of authorized shares of Common Stock, abstentions and broker non-votes have the same effect as a vote "against."
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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III. PROPOSALS
1. Election of Directors
Pursuant to our Charter, all directors of the Board (other than any director who may be elected by the holders of any series of preferred stock) hold office for a term expiring at the first succeeding annual meeting of stockholders after their election, with each such director holding office until his or her successor shall have been duly elected and qualified ("Annual Term").
The Board is currently comprised of 12 directors. As previously announced, Lee W. Hogan and J. Landis Martin (our current independent Board Chair) will retire from the Board effective upon the expiration of their respective current terms as directors at the Annual Meeting. The Board has appointed P. Robert Bartolo to be our new independent Board Chair, effective immediately prior to the Annual Meeting. The Board has also approved a reduction in the size of the Board, effective upon the election of directors at the Annual Meeting, to 10 directors.
The nominees for director at the Annual Meeting are: P. Robert Bartolo, Jay A. Brown, Cindy Christy, Ari Q. Fitzgerald, Andrea J. Goldsmith, Tammy K. Jones, Anthony J. Melone, W. Benjamin Moreland, Kevin A. Stephens and Matthew Thornton, III. Each of these nominees is currently a member of the Board. If elected at the Annual Meeting, each of the nominees shall hold office as a director for an Annual Term.
In accordance with our Amended and Restated By-laws ("By-Laws"), each incumbent director nominee has tendered an irrevocable resignation that will be effective upon (1) failure to receive the required vote for election at the Annual Meeting and (2) the Board's subsequent acceptance of such resignation. If an incumbent director nominee fails to receive the required vote for re-election, the Nominating, Environmental, Social and Governance Committee ("NESG Committee") and the Board should act to determine whether to accept or reject the resignation, or whether other action should be taken.
Each nominee has consented to be nominated and has expressed his or her intention to serve if elected. The Board expects that each of the nominees for director will be able and willing to serve as a director. If any nominee is not available, the proxies may be voted for another person nominated by the current Board, or the size of the Board may be reduced. Information about the nominees and the Board is contained in the next two sections of this Proxy Statement (see "IV. Board of Directors" and "V. Information About the Board of Directors").
The Board recommends a vote FOR the election of each of the 10 nominees named herein as directors.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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2. Ratification of Appointment of Independent Registered Public Accountants
The Audit Committee of the Board ("Audit Committee") has appointed PwC to continue to serve as our independent registered public accountants for fiscal year 2022. In the event the stockholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee. Approval of the resolution will in no way limit the Audit Committee's authority to terminate or otherwise change the engagement of PwC for fiscal year 2022.
We were billed for professional services provided with respect to fiscal years 2021 and 2020 by PwC in the amounts set forth in the following table:
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Services Provided | | 2021 | | 2020 |
Audit Fees (a) | | $ | 3,560,000 | | $ | 3,330,281 |
Audit-Related Fees (b) | | 954 | | 900 |
Tax Fees (c) | | 35,948 | | 211,857 |
All Other Fees (d) | | 40,000 | | — | |
Total | | $ | 3,636,902 | | $ | 3,543,038 |
(a) Represents the aggregate fees billed for professional services rendered by PwC for the audit of our annual financial statements, review of financial statements included in our quarterly reports on Form 10-Q, services related to the audit of internal control over financial reporting, and other services normally provided by our independent auditor in connection with statutory and regulatory filings or engagements.
(b) Represents the aggregate fees billed for assurance and related services by PwC that are reasonably related to the performance of the audit or review of our financial statements not reported as "Audit Fees."
(c) Represents the aggregate fees billed for professional services rendered by PwC for tax compliance, tax advice and tax planning.
(d) Represents the aggregate fees billed for products and service provided by PwC other than those reported as audit, audit-related or tax fees above, including fees related to limited assurance services pertaining to 2021 sustainability metrics with respect to our senior unsecured credit facility.
We expect a representative of PwC 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.
The Board recommends a vote FOR ratification of the appointment of PwC as our independent registered public accountants for fiscal year 2022.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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3. Proposal to Approve Our 2022 Long-Term Incentive Plan
At the Annual Meeting, the stockholders will be asked to approve the adoption of our 2022 Long-Term Incentive Plan ("2022 LTIP"), a copy of which is attached hereto as Appendix A. The 2022 LTIP is a broad-based incentive plan that provides for the granting of awards to our employees, directors and consultants.
The 2022 LTIP is intended to replace our 2013 Long-Term Incentive Plan, as amended ("2013 LTIP"), as the term for granting awards under the 2013 LTIP currently expires in February 2023. While the 2022 LTIP, like the 2013 LTIP, is a broad-based incentive plan providing for the grant of a variety of awards, the only types of awards we have ever issued pursuant to the 2013 LTIP are RSU Awards, Restricted Stock, and Stock Awards (each defined below). The 2022 LTIP is generally consistent in substance with the 2013 LTIP.
Stockholder approval of the 2022 LTIP is required under the rules of the New York Stock Exchange ("NYSE"). The Company is also asking our stockholders to approve the 2022 LTIP for purposes of Section 421 of the Internal Revenue Code of 1986, as amended ("Code").
Purpose and Background
The 2022 LTIP is proposed to enable us to provide a means to continue to attract able directors, employees, and consultants and to provide a means whereby those individuals upon whom the responsibilities rest for our successful administration and management, and whose present and potential contributions are of importance, can acquire and maintain Common Stock ownership, thereby strengthening their concern for our welfare. A further purpose of the 2022 LTIP is to provide such individuals with additional incentive and reward opportunities designed to enhance our profitable growth. Accordingly, the 2022 LTIP provides for the following:
•discretionary grants to our (or our affiliates') employees and consultants and our directors of (a) shares of Common Stock that are subject to restrictions on disposition and forfeiture to us under certain circumstances ("Restricted Stock"), (b) restricted stock unit awards ("RSU Awards" or "RSUs"), (c) shares of Common Stock, without satisfaction of any performance criteria or objectives ("Stock Awards"), (d) stock options that do not constitute Incentive Stock Options ("Non-statutory Stock Options"), (e) stock appreciation rights ("Stock Appreciation Rights" or "SARs"), (f) shares of Common Stock, cash payments, or a combination thereof that may be earned based on the satisfaction of various performance measures ("Performance Awards"), and (g) the right to receive the value of shares of Common Stock, cash payments or a combination thereof which vest over a period of time ("Phantom Stock Awards"); and
•discretionary grants to our employees or the employees of our subsidiary corporations of stock options that constitute incentive stock options as defined in Section 422 of the Code ("Incentive Stock Options").
The Board adopted the 2022 LTIP on February 17, 2022, subject to stockholder approval at the Annual Meeting. If the 2022 LTIP is not approved by our stockholders at the Annual Meeting, then no awards will be granted under the 2022 LTIP. If the 2022 LTIP is approved by our stockholders at the Annual Meeting, pursuant to an amendment to our 2013 LTIP approved by the Board on February 17, 2022, we will not issue any new awards under our 2013 LTIP on or after the date of such stockholder approval; provided, that the 2013 LTIP and the applicable award agreements will continue to govern any outstanding awards previously issued under the 2013 LTIP. The 2013 LTIP is our only other existing compensatory plan under which equity awards relating to shares of Common Stock can currently be granted.
No awards have been made under the 2022 LTIP, and the amount of any benefits cannot be determined at this time.
Reasons the Board Recommends Voting For Approval of the 2022 LTIP
The Board believes that adopting the 2022 LTIP is in the best interest of the stockholders as the Board believes that granting equity-based compensation will incentivize our employees, directors and consultants to work to achieve stock price appreciation and dividend growth and will better enable us to attract, motivate and retain talented, qualified employees and consultants. The Board also believes that encouraging our employees, directors and consultants to own shares of our Common Stock fosters broad alignment between the interests of employees, directors and consultants and the interests of our stockholders.
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Not only do long-term incentives foster an ownership culture that aligns the interests of employees with those of our stockholders, but they also represent a significant component of the overall compensation package for our leadership. The Company has exercised responsible use of long-term incentives in the recent past, as our burn rate and overhang (discussed below) demonstrate, and we intend to continue such practices going forward under the 2022 LTIP.
The 2022 LTIP also contains many stockholder-friendly features, such as restrictions on repricing stock options or stock appreciation rights, prohibitions on the payment of dividends and dividend equivalents unless the underlying awards become earned and vested, and express annual limits on the value of director equity retainer awards.
Matters Considered by the Board
In determining to adopt the 2022 LTIP (including the number of shares issuable thereunder) and to recommend it to our stockholders for approval, in addition to the reasons noted above, the Board considered a number of factors, including the following:
•Duration that shares available for issuance under the Plan are expected to last. Based on (i) the requested number of shares to be reserved under the 2022 LTIP (including shares to be transferred from the 2013 LTIP to the 2022 LTIP), (ii) our three-year average burn rate (as provided below) and (iii) our current long-term incentive granting practices and the current economics of our share price, we expect that the share reserve will cover awards for approximately 10 years, which represents the full granting term of the proposed plan (no awards may be granted under the 2022 LTIP after the tenth anniversary of the date the plan is approved by stockholders of the Company). As a result, we believe the expected life of the share reserve is reasonable and will ensure sufficient funding for equity awards for a significant number of years.
•Expected potential dilution. The potential dilution (sometimes referred to as overhang) under our 2013 LTIP was, as of December 31, 2021, approximately 1.5%. The 2022 LTIP will increase our potential dilution to approximately 3.9%. The Board believes the expected potential dilution that will result from the 2022 LTIP is (i) reasonable for a Company of our size in our industry and (ii) below the median of our peer group.
We define potential dilution as the sum of the total number of (i) outstanding full value share grants and (ii) shares of Common Stock available for future grants under the Plan, expressed as a percentage of the fully diluted weighted average common shares outstanding.
•Other considerations. In approving the 2022 LTIP and the number of shares reserved for issuance thereunder, the Board also considered our long-term incentive pay strategy of emphasizing equity grants to executives and directors to align their interests to those of our stockholders.
Burn Rate
The following table sets forth information regarding time-vested and performance-based, stock-settled equity awards granted over each of the last three fiscal years. These awards were all made under the 2013 LTIP:
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| 2021 | 2020 | 2019 | Three-Year Average |
Stock Options/SARs Granted | 0 | 0 | 0 | |
Time-Vested RSUs Granted | 658,511 | 582,959 | 782,636 |
Performance RSUs Granted | 279,658 | 403,097 | 455,169 |
Total Shares Granted | 938,169 | 986,056 | 1,237,805 |
Weighted-Average Basic Common Stock Shares Outstanding (as of December 31) | 432,075,225 | 422,719,397 | 415,630,837 |
Burn Rate | 0.22% | 0.23% | 0.30% | 0.25% |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Information on Equity Compensation Plans as of December 31, 2021
The following is information regarding all existing equity compensation plans as of December 31, 2021 (except as noted):
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| Number of Shares |
Total number of stock options and SARs outstanding(a) | 0 |
Total number of full value awards outstanding (includes time-based RSUs and performance RSUs)(a) | 2,191,230 |
Shares available for grant under the 2013 LTIP(b) | 4,401,331 |
Total shares of Common Stock outstanding as of the Record Date | 433,029,630 |
(a) The number of shares of outstanding performance RSUs assumes performance at the target performance level.
(b) The number of shares remaining available for future grant under the 2013 LTIP reflects performance RSUs at target payout. Only the number of shares remaining available for future grant under the 2013 LTIP on the date the 2022 LTIP becomes effective, as well as any outstanding awards under the 2013 LTIP that later become forfeited, will be transferred to the 2022 LTIP.
Below is a summary of the terms of the 2022 LTIP that is qualified in its entirety by reference to the full text of the 2022 LTIP which is attached to this Proxy Statement as Appendix A.
Administration
The 2022 LTIP will be administered by a committee (for purposes of this Proposal 3, "Committee") appointed by the Board that will be comprised solely of two or more non-employee directors who qualify as "Non-Employee Directors" as defined in Rule 16b-3 of the Securities Exchange Act of 1934, as amended ("Exchange Act"). The Board has appointed the Compensation Committee to initially administer the 2022 LTIP.
The Committee will have full authority, subject to the terms of the 2022 LTIP, to establish rules and regulations for the proper administration of the 2022 LTIP, to select the employees, directors and consultants to whom awards are granted, and to set the dates of grants, the types of awards that shall be made and the other terms of the awards. When granting awards, the Committee will consider such factors as an individual's duties and present and potential contributions to our success and such other factors as the Committee in its discretion shall deem relevant. The Committee may also correct any defect or supply any omission or reconcile any inconsistency in the 2022 LTIP or in any agreement relating to an award in the manner and to the extent it shall deem expedient to carry it into effect. The Committee may, in its discretion and as of a date determined by the Committee, fully vest any award, in whole or in part.
The Committee in its sole discretion, and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the 2022 LTIP to one or more members of the Board and/or officers of the Company; provided, however, that the Committee may not delegate its authority or power with respect to (i) the selection for participation in the 2022 LTIP of an officer or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer or person; or (ii) any awards to a director.
Number of Shares Subject to the 2022 LTIP; Award Limits
10,500,000 shares of Common Stock will be available for awards under the 2022 LTIP, representing 2.4% of the Company's outstanding shares as of the Record Date, which amount shall be increased by (i) the number of shares which remain available for issuance under the 2013 LTIP on the date the 2022 LTIP becomes effective and (ii) any shares issued under the 2013 LTIP that are the subject of outstanding awards and are subsequently forfeited or terminated, expire unexercised, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares covered by such award are not issued to the award holder or are exchanged for awards that do not involve shares (provided, for purposes of this clause (ii), any shares withheld from payment of an award to satisfy tax obligations shall be treated as issued).
Any shares of Common Stock that are the subject of awards under the 2022 LTIP which are forfeited or terminated, expire unexercised, are settled in cash in lieu of shares of Common Stock or in a manner such that all or some of the shares covered by such award are not issued to the award holder or are exchanged for awards that do not involve shares will again immediately become available to be issued pursuant to awards granted under
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the 2022 LTIP. If shares of Common Stock are withheld from payment of an award to satisfy tax obligations with respect to an award, other than a stock option award, those shares will be added back to the number of shares available for issuance under the 2022 LTIP. If shares of Common Stock are tendered in payment of an option price of an option or the exercise price of a SAR, those shares will not be available for issuance under the 2022 LTIP.
The 2022 LTIP will allow the Committee to grant awards in substitution for stock and stock based awards held by service providers of another corporation in connection with (i) a merger or consolidation of the service recipient corporation with the Company or an affiliate or (ii) the acquisition by the Company or an affiliate of property or stock of the service recipient corporation. Provided the substitute awards granted under the 2022 LTIP satisfy certain terms and conditions, they will not reduce the number of shares available for issuance under the 2022 LTIP's terms. If substitute award shares are forfeited, those shares will not become available for issuance under the 2022 LTIP.
The aggregate number of shares of Common Stock with respect to which Incentive Stock Options may be granted under the 2022 LTIP is 1,000,000 shares. This limitation may be adjusted upon a subdivision or consolidation of shares of Common Stock or other capital readjustment, the payment of a stock dividend on Common Stock, or other increase or reduction in the number of shares of Common Stock outstanding without receipt of consideration by our Company.
The maximum value of any award of equity to a non-employee director during a calendar year, which are generally issued as Stock Awards, shall be determined by the Committee and shall not exceed $850,000 per calendar year.
Eligibility
All of our (and our affiliates') employees and consultants and our directors are eligible to participate in the 2022 LTIP. The selection of those employees, directors and consultants, from among those eligible, who will receive Incentive Stock Options, Non-statutory Stock Options, Stock Awards, Restricted Stock awards, Performance Awards, Phantom Stock Awards, Stock Appreciation Rights, RSU Awards or any combination thereof is within the discretion of the Committee. However, Incentive Stock Options may be granted only to our employees and employees of our subsidiary corporations. We currently have 11 non-employee directors, 8 executive officers and approximately 2,200 other employees who would be eligible to participate in the 2022 LTIP.
Provisions Related to Awards; Dividend and Dividend Equivalents
Except with respect to certain Stock Awards and as otherwise set forth in the 2022 LTIP, an award under the 2022 LTIP shall generally be evidenced by an award agreement which shall designate (i) the type of award being issued; (ii) the vesting conditions or forfeiture provisions applicable to the award, including any applicable performance goals; (iii) transferability restrictions; (iv) any applicable rules regarding delivery of shares under the award; and (v) any additional matters as the Committee may determine to be appropriate.
The Committee may provide in an award agreement that an award under the 2022 LTIP shall earn dividends or dividend equivalents; provided, however, that the payment of such dividends or dividend equivalents shall be subject to the same vesting conditions as apply to the underlying award. No portion of any dividends or dividend equivalents will be paid prior to vesting or during a forfeiture restriction period. Prior to payment, any dividends or dividend equivalents will be credited to an account maintained on the books of the Company and will be subject to such terms, conditions, limitations and restrictions as the Committee may establish, from time to time, including reinvestment in additional shares of Common Stock or common share equivalents. No dividends or dividend equivalents will be paid on options or Stock Appreciation Rights.
Term of 2022 LTIP
The 2022 LTIP will be effective as of May 19, 2022, the date the 2022 LTIP is approved by our stockholders at the Annual Meeting. No further awards may be granted under the 2022 LTIP after May 19, 2032, and the 2022 LTIP will terminate thereafter once all awards have been satisfied, exercised or expire. The Board in its discretion may terminate the 2022 LTIP at any time with respect to any shares of Common Stock for which awards have not theretofore been granted.
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Restricted Stock
a. Transfer Restrictions and Forfeiture Obligations. Pursuant to a Restricted Stock award, shares of Common Stock will be issued or delivered to the employee, director or consultant at the time the award is made without any payment to us (other than for any payment amount determined by the Committee in its discretion), but such shares will be subject to certain restrictions on the disposition thereof and certain obligations to forfeit and surrender such shares to us as may be determined in the discretion of the Committee. The Committee may provide that the restrictions on disposition and the obligations to forfeit the shares will lapse based on (i) the attainment of one or more performance measures established by the Committee, (ii) the continued employment or service with us or our affiliates for a specified period or (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion. Upon the issuance of shares of Common Stock pursuant to a Restricted Stock award, except for the foregoing restrictions and unless otherwise provided in the award agreement or the 2022 LTIP (which, for the avoidance of doubt, shall include the restrictions described above regarding dividends and dividend equivalents), the recipient of the award will generally have all the rights of a stockholder with respect to such shares, including the right to vote such shares.
b. Other Terms and Conditions. The Committee may, in its sole discretion, prescribe additional terms, conditions, or restrictions relating to Restricted Stock awards, including rules pertaining to the effect of the termination of employment or service as a director or consultant of a recipient of Restricted Stock (by reason of retirement, disability, death or otherwise) prior to the lapse of any applicable restrictions.
Restricted Stock Unit Awards
a. RSU Awards. An RSU Award will be similar in nature to a Restricted Stock award except that no shares of Common Stock or cash will be transferred to the holder of the award until the applicable vesting restrictions lapse or performance conditions have been satisfied. The amount of, and the vesting and the transferability restrictions applicable to, any RSU Award will be determined by the Committee in its sole discretion. The Committee will maintain a bookkeeping ledger account that reflects the number of restricted stock units credited under the 2022 LTIP for the benefit of a holder.
b. Form of Payment Under RSU Award. Payment under an RSU Award will be made in cash or shares of Common Stock as specified in the applicable award agreement.
c. Time of Payment Under RSU Award. Payment to a holder under an RSU Award shall be made at the time specified in the applicable award agreement. The award agreement will specify that the payment will be made (i) by a date that is no later than the date that is two and one-half months after the end of the fiscal year in which the RSU Award payment is no longer subject to a substantial risk of forfeiture or (ii) at a time that is permissible under Section 409A of the Code ("Section 409A").
Stock Awards
a. Award. Stock Awards are rights to receive shares of Common Stock, which vest immediately, without satisfaction of any performance criteria or objectives.
b. Payment. A Stock Award entitles the recipient to receive immediate payment of such award in Common Stock. The Committee may, in its discretion, require payment, partial payment or other conditions of the recipient relating to any Stock Award.
c. Other Terms and Conditions. The Committee may establish other terms and conditions for Stock Awards under the 2022 LTIP.
Stock Options
a. Term of Option. The term of each option will be as specified by the Committee at the date of grant but shall not be exercisable more than ten years after the date of grant. The effect of the termination of an optionee's employment, consulting relationship or membership on the Board will be specified in the award agreement that evidences each option grant.
b. Option Price. The option price will be determined by the Committee and may not be less than the fair market value of a share of Common Stock on the date that the option is granted.
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c. Repricing Restrictions. Except for adjustments for certain changes in the Common Stock, the Committee may not, without the approval of our stockholders, amend any outstanding award agreement that evidences an option grant to lower the option price (or cancel and replace any outstanding award agreement for an option with a new award agreement having a lower option price) or cancel any outstanding “underwater” options in exchange for cash. In addition, the Committee may not lower the option price (or cancel and replace any outstanding award agreement for an option with a new award agreement having a lower option price) to the extent that doing so would subject the holder to additional taxes under Section 409A.
d. Special Rules for Certain Stockholders. If an Incentive Stock Option is granted to an employee who then owns, directly or by attribution under the Code, stock possessing more than 10% of the total combined voting power of all classes of our stock or the stock of a subsidiary of ours, then the term of the option may not exceed five years, and the option price will be at least 110% of the fair market value of the shares on the date that the option is granted.
e. Size of Grant. The number of shares for which an option is granted to an employee, director or consultant will be determined by the Committee.
f. Status of Options. The status of each option granted to an employee as either an Incentive Stock Option or a Non-statutory Stock Option will be designated by the Committee at the time of grant. Unless an option is specifically characterized by the Committee as an Incentive Stock Option, it will be a Non-statutory Stock Option. If, however, the aggregate fair market value (determined as of the date of grant) of shares with respect to which Incentive Stock Options become exercisable for the first time by an employee exceeds $100,000 in any calendar year, the options with respect to the excess shares will be Non-statutory Stock Options. All options granted to any non-employee directors and consultants will be Non-statutory Stock Options.
g. Payment. The option price upon exercise may be paid by an optionee in any combination of the following: (i) cash, certified check, bank draft or postal or express money order for an amount equal to the option price under the option, (ii) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the Committee) or (iii) any other form of payment which is acceptable to the Committee.
Stock Appreciation Rights
a. Term of Stock Appreciation Right. The term of each Stock Appreciation Right will be as specified by the Committee at the date of grant but shall not be exercisable more than ten years after the date of grant.
b. Calculation of Payments. Unless otherwise provided in an award agreement for Stock Appreciation Rights, upon the exercise of a Stock Appreciation Right, a holder will be entitled to receive payment from us in an amount determined by multiplying (i) the difference between the value of a share of Common Stock on the date of exercise over the grant price by (ii) the number of shares of Common Stock with respect to which the Stock Appreciation Right is exercised. The per share grant price for a Stock Appreciation Right will be established on the date of grant of the Stock Appreciation Right. At the discretion of the Committee, the payment made to a holder upon the exercise of a Stock Appreciation Right may be in cash, in shares of Common Stock or in some combination of cash and Common Stock.
c. Repricing Restrictions. Except for adjustments for certain changes in the Common Stock, the Committee may not, without the approval of our stockholders, amend any outstanding award agreement to lower the Stock Appreciation Right grant price (or cancel and replace any outstanding Stock Appreciation Right with a new Stock Appreciation Right having a lower Stock Appreciation Right grant price) or cancel any outstanding "underwater" Stock Appreciation Rights in exchange for cash. In addition, the Committee may not lower the Stock Appreciation Right grant price (or cancel and replace any outstanding Stock Appreciation Right with a new award agreement having a lower Stock Appreciation Right grant price) to the extent that doing so would subject the holder to additional taxes under Section 409A.
Performance Awards
a. Grant of Performance Awards. The Committee, at any time, may grant Performance Awards under the 2022 LTIP to eligible persons in such amounts and upon such terms as the Committee may determine. The amount of, the vesting and the transferability restrictions applicable to any Performance Award will generally be based upon the attainment of performance goals as the Committee may determine.
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b. Performance Goals. The 2022 LTIP provides that a performance goal may be based on one or more business criteria that apply to the holder, one or more of our business units, or us as a whole, including, but not limited to, one or more of the following: stock price (including adjustments for dividends), funds from operations, adjusted funds from operations, earnings or adjusted earnings before or after interest, taxes, depletion, depreciation or amortization, earnings per share, earnings per share growth, total stockholder return, economic value added, cash return on capitalization, increased revenue, revenue ratios (per employee or per customer), net income (before or after taxes), market share, return on equity, return on assets, return on capital, return on capital compared to cost of capital, return on capital employed, return on invested capital, return on investment, return on sales, operating or profit margins, stockholder value, net cash flow, operating income, cash flow, cash flow from operations, cost reductions or cost savings, cost ratios (per employee or per customer), expense control, sales, proceeds from dispositions, project completion time, budget goals, net cash flow before financing activities, customer growth, total capitalization, debt to total capitalization ratio, credit quality or debt ratings, dividend payout, dividend growth, production volumes or safety results, or such other events or matters as the Committee determines in its sole discretion. Performance goals may also be based on performance relative to a peer group or index of companies. A performance goal need not be based upon an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria). The Committee, in its discretion, may adjust or modify the calculation of the performance goals for a performance period in order to prevent the dilution or enlargement of the rights of the holders (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development; (ii) in the event of, or in connection with, any acquisition or divestiture of a portion of the Company's business or operations; or (iii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.
c. Payment. Payment under a Performance Award may be made in cash or shares of Common Stock, as specified in the holder's award agreement. Unless a Performance Award is structured as a current transfer of shares of Common Stock subject to a risk of forfeiture in the event performance goals are not achieved, a holder's payment under a Performance Award will be made at the time specified in the applicable award agreement. The award agreement will specify that any payment will be made (i) by a date that is no later than the date that is two and one-half months after the end of the calendar year in which the Performance Award payment is no longer subject to a substantial risk of forfeiture or (ii) at a time that is permissible under Section 409A.
Phantom Stock Awards
a. Forfeiture. Phantom Stock Awards under the 2022 LTIP are awards of rights to receive the value of shares of Common Stock. Such awards vest over a period of time established by the Committee, without satisfaction of any performance criteria or objectives. The Committee may, in its discretion, require payment or other conditions of the recipient of a Phantom Stock Award. A Phantom Stock Award will terminate if the recipient's employment or service as a director or consultant with us and our affiliates terminates during the applicable vesting period, except as otherwise determined by the Committee.
b. Payment. Following the end of the vesting period for a Phantom Stock Award (or at such other time as may be provided in a Phantom Stock Award agreement), the holder of a Phantom Stock Award will be entitled to receive payment of an amount not exceeding the maximum value of the Phantom Stock Award, based on the then vested value of the award. Payment of a Phantom Stock Award may be made in cash, Common Stock, or a combination thereof.
c. Other Terms and Conditions. The Committee may establish other terms and conditions for Phantom Stock Awards under the 2022 LTIP.
Corporate Change and Other Adjustments
The 2022 LTIP provides that, upon a Corporate Change (as defined below), the Committee generally may accelerate the vesting of options and Stock Appreciation Rights, cancel options and Stock Appreciation Rights and cause us to make payments in respect thereof in cash, or adjust the outstanding options and Stock Appreciation Rights as appropriate to reflect such Corporate Change (including, subject to certain conditions, having some or all of the then outstanding options and Stock Appreciation Rights (whether vested or unvested)
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assumed or having a new award of a similar nature substituted for some or all of their then outstanding options and Stock Appreciation Rights under the 2022 LTIP (whether vested or unvested) by an entity which is a party to the transaction resulting in such Corporate Change).
In addition, upon a Corporate Change, the Committee may cause any award (whether vested or unvested) to be assumed or have a new award of a similar nature substituted for the award by an entity which is a party to the transaction resulting in the Corporate Change and which is then (or will be upon completion of the Corporate Change transaction) employing the holder or which is (or will be upon completion of the Corporate Change transaction) affiliated or associated with the holder in the same or a substantially similar manner as the Company prior to the Corporate Change, or a parent or subsidiary of such entity, provided that (i) such assumption or substitution is on a basis where the aggregate fair market value of the Common Stock subject to the award immediately after the assumption or substitution is equal to the aggregate fair market value of all Common Stock subject to the award immediately before such assumption or substitution and (ii) the assumed rights under such existing award or the substituted rights under such new award, as the case may be, will have substantially the same terms and conditions as the rights under the existing award assumed or substituted for, as the case may be.
Finally, upon a Corporate Change, the Committee may, acting in its sole discretion without the consent or approval of any holder, require the mandatory surrender to the Company by any holder of some or all of the outstanding awards, as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such awards and the Company shall pay (or cause to be paid) to the holder an amount of cash equal to the maximum value of the award which, in the event the applicable performance or vesting period set forth in such award has not been completed, shall be multiplied by a fraction, the numerator of which is the number of days during the period beginning on the first day of the applicable performance or vesting period and ending on the date of the surrender, and the denominator of which is the aggregate number of days in the applicable performance or vesting period.
The 2022 LTIP provides that a "Corporate Change" occurs if (i) we are not the surviving entity in any merger or consolidation or other reorganization (or we survive only as a subsidiary of an entity other than an entity that was directly or indirectly wholly owned by us immediately prior to such merger, consolidation or other reorganization), (ii) we sell, lease or exchange all or substantially all of our assets to any other person (other than an entity that is directly or indirectly wholly owned by us), (iii) we are to be dissolved, (iv) any person or group acquires or gains ownership or control of more than 50% of the outstanding shares of our voting stock, (v) as a result of a contested election of directors, the persons who were our directors before the election cease to constitute a majority of our Board or (vi) we are party to any other corporate transaction (as defined under section 424(a) of the Code and applicable Department of Treasury regulations) that is not described in clauses (i), (ii), (iii), (iv) or (v).
The maximum number of shares that may be issued under the 2022 LTIP, as well as the number and price of shares of Common Stock or other consideration subject to an award under the 2022 LTIP, will be appropriately adjusted by the Committee in the event of changes in the outstanding Common Stock by reason of stock dividends, recapitalizations, mergers, consolidations, combinations, split, spin-offs, extraordinary dividend, exchanges of shares or other relevant changes in capitalization or distributions to the holders of Common Stock occurring after an award is granted.
Transferability
An Incentive Stock Option is not transferable other than by will or the laws of descent and distribution and may be exercised during the employee's lifetime only by the employee or such employee's guardian or legal representative. All other awards under the 2022 LTIP are not transferable other than by will or the laws of descent and distribution, pursuant to a qualified domestic relations order, or with the consent of the Committee (as to certain family transfers, or otherwise). No award shall be transferred for value without stockholder approval.
Amendments
The Board may from time to time amend the 2022 LTIP; however, any change that would impair the rights of a participant with respect to an award theretofore granted will require the participant's consent. Further, without the prior approval of our stockholders, the Board may not amend the 2022 LTIP to change the class of eligible individuals, increase the number of shares of Common Stock that may be issued under the 2022 LTIP or amend or delete the provisions of the 2022 LTIP that prevent the Committee from amending any outstanding option or Stock Appreciation Right agreement to lower the option price or Stock Appreciation Right grant price (or cancel
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and replace any outstanding award agreement for an option with a new award agreement having a lower option price or cancel and replace any outstanding Stock Appreciation Right with a new Stock Appreciation Right having a lower grant price).
Recoupments in Restatement Situations
All awards granted under the 2022 LTIP will be subject to recoupment in accordance with any recoupment policy that the Company has adopted or adopts (i) pursuant to the requirements of the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law or (ii) that otherwise imposes recoupment provisions in the event of (1) a restatement by the Company of its financial statements, or (2) misconduct that causes financial or reputational harm to the Company.
Federal Income Tax Aspects of the 2022 LTIP
The following discussion summarizes certain material U.S. Federal income tax consequences to us and U.S. holders with respect to the acquisition, ownership, exercise or disposition of awards which may be granted under the 2022 LTIP. The discussion is based upon the provisions of the Code and the regulations and rulings promulgated thereunder, all of which are subject to change (possibly with retroactive effect) or different interpretations. Options and Stock Appreciation Rights with exercise prices less than the fair market value of Common Stock on the dates of grant, Phantom Stock, and certain other awards that may be granted pursuant to the 2022 LTIP, could be subject to additional taxes unless they are designed to comply with certain restrictions set forth in Section 409A and guidance promulgated thereunder. This summary reflects generally contemplated consequences and does not purport to deal with all aspects of U.S. Federal income taxation that may be relevant to an individual award holder's situation, nor any tax consequences arising under the laws of any state, local or foreign jurisdiction.
Restricted Stock. The recipient of a Restricted Stock award will not realize taxable income at the time of grant, and we will not be entitled to a deduction at that time, assuming that the restrictions constitute a substantial risk of forfeiture for federal income tax purposes. When the risk of forfeiture with respect to the stock subject to the award lapses, the holder will realize ordinary income in an amount equal to the fair market value of the shares of Common Stock at such time, and, subject to Section 162(m), we will be entitled to a corresponding deduction. All dividends and distributions (or the cash equivalent thereof) with respect to a Restricted Stock award paid to the holder before the risk of forfeiture lapses will also be compensation income to the holder when paid and, subject to Section 162(m) as discussed below, deductible as such by us. Notwithstanding the foregoing, the holder of a Restricted Stock award may elect under Section 83(b) of the Code to be taxed at the time of grant of the Restricted Stock award based on the fair market value of the shares of Common Stock on the date of the award, in which case (a) subject to Section 162(m), we will be entitled to a deduction at the same time and in the same amount, (b) dividends paid to the recipient during the period the forfeiture restrictions apply will be taxable as dividends and will not be deductible by us and (c) there will be no further federal income tax consequences when the risk of forfeiture lapses. Such election must be made not later than 30 days after the grant of the Restricted Stock award and is irrevocable.
Restricted Stock Unit Awards. The grant of an RSU Award under the 2022 LTIP generally will not result in the recognition of any U.S. federal taxable income by the recipient or a deduction for us at the time of grant. At the time an RSU Award vests, the recipient will generally recognize ordinary income, and, subject to Section 162(m), we will be entitled to a corresponding deduction. Generally, the measure of the income and the deduction will be the number of units subject to the RSU Award multiplied by the value of our Common Stock at the time the RSU Award is settled.
Stock Awards. The recipient of a Stock Award will realize taxable ordinary income at the time of grant in an amount equal to the fair market value of the shares of Common Stock on the date of the award, and, subject to Section 162(m), we will be entitled to a corresponding deduction.
Incentive Stock Options. Incentive Stock Options are subject to special federal income tax treatment. No federal income tax is imposed on the optionee upon the grant or the exercise of an Incentive Stock Option if the optionee does not dispose of the shares acquired pursuant to the exercise within the two-year period beginning on the date the option was granted or within the one-year period beginning on the date the option was exercised (collectively, the "holding period"). In such event, we would not be entitled to any deduction for federal income tax
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purposes in connection with the grant or exercise of the option or the disposition of the shares so acquired. With respect to an Incentive Stock Option, the difference between the fair market value of the stock on the date of exercise and the exercise price must generally be included in the optionee's alternative minimum taxable income for the year in which such exercise occurs. However, if the optionee exercises an Incentive Stock Option and disposes of the shares received in the same year and the amount realized is less than the fair market value of the shares on the date of exercise, then the amount included in alternative minimum taxable income will not exceed the amount realized over the adjusted basis of the shares.
Upon disposition of the shares received upon exercise of an Incentive Stock Option after the holding period, any appreciation of the shares above the exercise price should constitute long-term capital gain. If an optionee disposes of shares acquired pursuant to his or her exercise of an Incentive Stock Option prior to the end of the holding period, the optionee will be treated as having received, at the time of disposition, compensation taxable as ordinary income. In such event, and subject to Section 162(m), we may claim a deduction for compensation paid at the same time and in the same amount as compensation is treated as received by the optionee. The amount treated as compensation is the excess of the fair market value of the shares at the time of exercise (or in the case of a sale in which a loss would be recognized, the amount realized on the sale if less) over the exercise price; any amount realized in excess of the fair market value of the shares at the time of exercise would be treated as short-term or long-term capital gain, depending on the holding period of the shares.
Non-statutory Stock Options and Stock Appreciation Rights. As a general rule, no federal income tax is imposed on the optionee upon the grant of a Non-statutory Stock Option (whether or not including a Stock Appreciation Right), and we are not entitled to a tax deduction by reason of such grant. Generally, upon the exercise of a Non-statutory Stock Option, the optionee will be treated as receiving compensation taxable as ordinary income in the year of exercise in an amount equal to the excess of the fair market value of the shares of stock at the time of exercise over the option price paid for such shares. In the case of the exercise of a Stock Appreciation Right, the optionee will be treated as receiving compensation taxable as ordinary income in the year of exercise in an amount equal to the cash received plus the fair market value of the shares distributed to the optionee. Upon the exercise of a Non-statutory Stock Option or a Stock Appreciation Right, and subject to Section 162(m), we may claim a deduction for compensation paid at the same time and in the same amount as compensation income is recognized by the optionee assuming any federal income tax reporting requirements are satisfied.
Upon a subsequent disposition of the shares received upon exercise of a Non-statutory Stock Option or a Stock Appreciation Right, any difference between the fair market value of the shares at the time of exercise and the amount realized on the disposition would be treated as capital gain or loss. If the shares received upon the exercise of an option or a Stock Appreciation Right are transferred to the optionee subject to certain restrictions, then the taxable income realized by the optionee, unless the optionee elects otherwise, and our tax deduction (assuming any federal income tax reporting requirements are satisfied) should be deferred and should be measured at the fair market value of the shares at the time the restrictions lapse. The restrictions imposed on officers, directors and 10% stockholders by Section 16(b) of the Exchange Act is such a restriction during the period prescribed thereby if other shares have been purchased by such an individual within six months of the exercise of a Non-statutory Stock Option or Stock Appreciation Rights.
Performance Awards and Phantom Stock Awards. An individual who has been granted a Performance Award or a Phantom Stock Award generally will not realize taxable income at the time of grant, and we will not be entitled to a deduction at that time. Whether a Performance Award or Phantom Stock Award is paid in cash or shares of Common Stock, the individual will have taxable compensation, and, subject to Section 162(m), we will have a corresponding deduction. The measure of such income and deduction will be the amount of any cash paid and the fair market value of any shares of Common Stock either at the time the Performance Award or the Phantom Stock Award is paid or at the time any restrictions on the shares (including restrictions under Section 16(b) of the Exchange Act) subsequently lapse, depending on the nature, if any, of the restrictions imposed and whether the individual elects to be taxed without regard to any such restrictions.
Section 162(m). Generally, Section 162(m) precludes a public corporation from taking a deduction for annual compensation in excess of $1,000,000 paid to its covered employees (as defined in Section 162(m)). Our Section 162(m) covered employees are the principal executive officer, the principal financial officer, the three next highest-paid officers, and any employee who has been classified previously as a covered employee for purposes of Section 162(m).
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The 2022 LTIP is not qualified under Section 401(a) of the Code.
Inapplicability of ERISA. Based upon current law and published interpretations, we do not believe that the 2022 LTIP is subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended. The comments set forth in the above paragraphs are only a summary of certain of the Federal income tax consequences relating to the 2022 LTIP. No consideration has been given to the effects of state, local, or other tax laws on the 2022 LTIP or award recipients.
Parachute Payment Sanctions. Certain provisions of the 2022 LTIP or provisions included in an award agreement may afford a recipient special protections or payments which are contingent on a change in the ownership or effective control of us or in the ownership of a substantial portion of our assets. To the extent triggered by the occurrence of any such event, these special protections or payments may constitute "parachute payments" that, when aggregated with other parachute payments received by the recipient, if any, could result in the recipient receiving "excess parachute payments" (a portion of which would be allocated to those protections or payments derived from the award). We would not be allowed a deduction for any such excess parachute payments, and the recipient of the payments would be subject to a nondeductible 20% excise tax upon such payments in addition to income tax otherwise owed.
The Board recommends a vote FOR the proposal to approve our 2022 LTIP.
Equity Compensation Plan Information
The following table summarizes information with respect to our equity compensation plans under which our equity securities are authorized for issuance as of December 31, 2021:
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Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (in Shares) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($ per Share) | Number of Securities Remaining Available for Future Issuance (in Shares)(a) |
Equity Compensation Plans Approved by Security Holders | — | — | 6,592,561(b) |
Equity Compensation Plans Not Approved by Security Holders | — | — | — |
Total | — | — | 6,592,561 |
(a) In the first quarter of 2022, we granted 13,968 shares of Common Stock to the non-executive members of the Board. In addition, in the first quarter of 2022, as a component of long-term incentive compensation, the Board authorized the grant of RSU Awards for an aggregate of approximately 850,000 shares to approximately 2,350 of our employees, including the grant of RSU Awards for 157,093 shares to the named executive officers included in the table below at “VIII. Executive Compensation—Summary Compensation Table.” These awards were authorized pursuant to the 2013 LTIP which has been approved by our stockholders.
(b) This amount is comprised of 4,401,331 shares available for grant under the 2013 LTIP, plus 2,191,230 shares underlying awards granted and outstanding under the 2013 LTIP, each as of December 31, 2021. Pursuant to an amendment to our 2013 LTIP approved by the Board on February 17, 2022, we will not grant any new awards under our 2013 LTIP on or after the date of the stockholder approval of the 2022 LTIP.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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4. Amendment to Our Restated Certificate of Incorporation to Increase the Number of Authorized Shares of Common Stock
Our Board has unanimously adopted and declared advisable and is submitting for stockholder approval an amendment to the Company's Charter to increase the number of authorized shares of Common Stock from 600,000,000 to 1,200,000,000 ("Share Amendment"). The Share Amendment would be the first increase to the number of authorized shares of Common Stock since the Company's initial public offering in 1998.
As of March 24, 2022, the Company had 433,029,658 shares of Common Stock outstanding, 5,894,436 shares of Common Stock reserved for future issuance under the 2013 LTIP, and 161,075,906 shares of Common Stock unreserved and available for issuance. Accordingly, only approximately 27% of our authorized Common Stock is unreserved and available for issuance. The Company is not requesting any increase to the Company's authorized number of shares of preferred stock, which will remain unchanged at 20,000,000 shares. No shares of the Company's preferred stock are currently issued and outstanding.
Our Board recommends that stockholders approve the proposed Share Amendment, adopted by the Board on February 17, 2022, which would amend the first paragraph of Article IV of our Charter to read as follows:
The total number of shares of stock which the Corporation shall have authority to issue is one billion two hundred twenty million (1,220,000,000), consisting of twenty million (20,000,000) shares of Preferred Stock, par value $0.01 per share (hereinafter referred to as “Preferred Stock”), and one billion two hundred million (1,200,000,000) shares of Common Stock, par value $0.01 per share (hereinafter referred to as “Common Stock”).
Our Board believes it is advisable and in the best interests of the Company and our stockholders to increase the total number of authorized shares of Common Stock in order to provide the Company with greater flexibility to successfully pursue its business strategy. Except for shares of Common Stock that have already been reserved for issuance, there are currently no agreements, arrangements, commitments, or understandings regarding any specific issuances of additional shares of Common Stock at this time, but the proposed increase will allow the Company to remain flexible to issue shares of Common Stock for strategic purposes and other business needs. For example, we may issue shares of Common Stock to fund and complete acquisitions or other strategic transactions, to grant equity awards under our incentive plan (including the 2022 LTIP, if approved by our stockholders at the Annual Meeting), to raise capital through equity offerings, to effect stock splits or stock dividends or for general corporate purposes.
In addition, the Company's ability to use equity to attract, retain and motivate key employees is an important component of our compensation strategy, aligning the interests of our employees, executive officers and directors with those of our stockholders. Further, the ability to timely take advantage of market conditions and respond quickly to business opportunities is important to our growth and success. Our Board believes that increasing the number of authorized shares of Common Stock will enable the Company to take strategic action without the expense and delay of arranging for a special meeting of stockholders in the future. No further action or authorization by our stockholders would be necessary prior to the issuance of the approved additional shares of Common Stock unless required by the Company's organizational documents, applicable law, or by the rules of the NYSE or any other stock exchange on which our securities may be listed or traded.
The additional authorized shares of Common Stock, if and when issued, would be part of our existing class of Common Stock and would be identical in all respects, having the same rights and privileges as the shares of Common Stock currently authorized and outstanding. The adoption of the Share Amendment will not have any immediate dilutive effect or change the rights of current holders of our Common Stock. However, to the extent that the additional authorized shares of Common Stock are issued in the future, such issuances may have a dilutive effect on earnings per share, book value per share, percentage ownership interest or voting rights of present holders of our Common Stock. Current stockholders do not have preemptive rights to acquire any shares of Common Stock authorized by the Share Amendment, meaning that current stockholders do not have a prior right to purchase any newly issued shares to maintain their proportionate ownership of our Common Stock.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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The proposed Share Amendment could, under certain circumstances, discourage an attempt by another person or entity to take control of the Company by providing the Company with the capability to engage in actions that would be dilutive to a potential acquirer, pursue alternative transactions or otherwise increase the potential cost to acquire control of the Company. However, the Board is not aware of any attempt to take control of the Company and has not presented this proposal with the intention that the increase in our authorized shares of Common Stock be used as a type of anti-takeover device.
If the Share Amendment is approved, it will become effective upon the filing of a Certificate of Amendment to the Charter setting forth the Share Amendment with the Secretary of State of the State of Delaware, which we would expect to file following the Annual Meeting.
The Board recommends a vote FOR the approval of the Share Amendment.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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5. Non-binding, Advisory Vote to Approve the Compensation of Our Named Executive Officers
In accordance with the requirements of Section 14A of the Exchange Act and the related rules, our stockholders have the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the SEC's compensation disclosure rules.
Accordingly, we are asking our stockholders to approve the following resolution at the Annual Meeting:
RESOLVED, that the stockholders of Crown Castle International Corp. ("Company") approve, on an advisory basis, the compensation of the named executive officers of the Company, as disclosed in the Company's Proxy Statement for the 2022 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure.
As described in "VIII. Executive Compensation—Compensation Discussion and Analysis" of this Proxy Statement, we seek to align the interests of our named executive officers with the interests of our stockholders. Our compensation programs are generally designed to reward our named executive officers for performance against pre-established financial goals and the TSR experienced by our stockholders, with a focus on variable, "at risk" incentive-based compensation that supports our "pay-for-performance" compensation philosophy. We believe that our executive compensation program is designed to attract, retain and motivate high-performing executives to lead our Company.
The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. The vote on this proposal is advisory, which means that the vote is not binding on the Company, our Board or the Compensation Committee of the Board ("Compensation Committee"). Nevertheless, the Board and the Compensation Committee value the opinions of our stockholders, and intend to consider any stockholder concerns evidenced by this vote and evaluate whether any actions are necessary to address those concerns.
The Board recommends a vote FOR the approval of the compensation of our named executive officers as disclosed in this Proxy Statement.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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IV. BOARD OF DIRECTORS
Nominees for Director—For a Term Expiring in 2023
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P. Robert Bartolo | | Age: 50 | Director Since: 2014 |
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Principal Occupation: Individual Investor | | Mr. Bartolo was appointed to the Board as a director in February 2014. The Board has appointed Mr. Bartolo to serve as our new independent Board Chair, effective immediately prior to the Annual Meeting. Mr. Bartolo served as a portfolio manager in the U.S. Equity Division of T. Rowe Price from March 2005 to January 2014. During such time, Mr. Bartolo also served as Vice President of T. Rowe Price Group, Inc. From October 2007 to January 2014, Mr. Bartolo served as Executive Vice President ("EVP") of the U.S. Growth Stock Fund and chairman of that fund's Investment Advisory Committee. Mr. Bartolo also analyzed and recommended companies in the telecommunications and related industries for T. Rowe Price from August 2002 to March 2007 and co-managed the Media and Telecom Fund from March 2005 to March 2007. Mr. Bartolo has earned the Chartered Financial Analyst designation.
Skills and Qualifications: Mr. Bartolo brings to our Board financial and investment expertise and experience, business analysis acumen, advanced financial literacy, and an understanding of our business and the communications infrastructure industry, including extensive experience investing in and analyzing companies in the telecommunications and related industries.
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Jay A. Brown | | Age: 49 | Director Since: 2016 |
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Principal Occupation: President and CEO, Crown Castle International Corp. | | Mr. Brown was elected to the Board as a director in May 2016 and has served as our President and CEO since June 2016. Previously, Mr. Brown served as our Senior Vice President ("SVP"), Chief Financial Officer ("CFO") and Treasurer from July 2008 to May 2016. Mr. Brown served as Vice President of Finance from August 2001 until his appointment as our CFO and, during such time, was also appointed Treasurer in May 2004. From the time he joined the Company in August 1999 until July 2001, Mr. Brown served in a number of positions in corporate development and corporate finance. Mr. Brown serves on the advisory board of governors of NAREIT—the National Association of Real Estate Investment Trusts, the board of directors and executive committee of the Wireless Industry Association and the advisory board of Hankamer School of Business at Baylor University. Mr. Brown also serves on the board of trustees of Baylor College of Medicine and board of regents of Baylor University.
Skills and Qualifications: Mr. Brown brings to our Board executive experience (including as our CEO and CFO), extensive knowledge and understanding of our business and the communications infrastructure industry, financial and transactional acumen, and strategic insight. |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Cindy Christy | | Age: 56 | Director Since: 2007 |
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Principal Occupation: President, Asurion Corporation
| | Ms. Christy was appointed to the Board as a director in August 2007. Ms. Christy has served as President of Asurion Corporation ("Asurion") since September 2014. Ms. Christy's prior positions at Asurion include service as Chief Operating Officer ("COO") from September 2014 to December 2017, as President-Americas from December 2012 to September 2014, and as President-Sales, Marketing and Product Management from November 2008 to December 2012. Prior to joining Asurion, Ms. Christy served as President, Americas Region for Alcatel-Lucent from January 2008 to September 2008 and as President of the North America Region for Alcatel-Lucent from December 2006 to December 2007. Prior to that time, Ms. Christy served in various positions with Lucent Technologies Inc., including President of the Network Solutions Group, President of the Mobility Solutions Group and COO of the Mobility Solutions Group. From August 2015 to February 2019, Ms. Christy served on the board of directors of The Dun & Bradstreet Corporation, formerly a public company.
Skills and Qualifications: Ms. Christy brings to our Board extensive and advanced know-how and understanding of telecommunications technologies and related emerging technological trends, relevant executive experience (including with a leading telecommunications infrastructure provider), industry strategic insights, and extensive knowledge of our customers, including such customers' anticipated priorities, goals and objectives.
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Ari Q. Fitzgerald | | Age: 59 | Director Since: 2002 |
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Principal Occupation: Partner and Leader, Communications, Internet and Media Practice, Hogan Lovells US LLP
| | Mr. Fitzgerald was appointed to the Board as a director in August 2002. Mr. Fitzgerald is currently a partner in the Washington, D.C. office of Hogan Lovells US LLP ("Hogan Lovells") and the leader of its Communications, Internet and Media Practice. At Hogan Lovells, Mr. Fitzgerald concentrates on wireless, international and Internet-related issues. Prior to joining Hogan Lovells, Mr. Fitzgerald was an attorney with the Federal Communications Commission ("FCC") from 1997 to 2001. While at the FCC, he served for nearly three years as legal advisor to FCC Chairman William Kennard and later as Deputy Chief of the FCC's International Bureau. Prior to joining the FCC, Mr. Fitzgerald was an attorney in the Office of Legal Counsel of the U.S. Department of Justice. He also served as legal counsel to former U.S. Senator Bill Bradley. Prior to working for the U.S. Department of Justice, Mr. Fitzgerald worked as an attorney for the law firm of Sullivan & Cromwell LLP.
Skills and Qualifications: Mr. Fitzgerald brings to our Board extensive regulatory knowledge and experience (particularly with respect to the FCC, National Telecommunications and Information Administration, the U.S. Congress, U.S. Department of Justice and other federal agencies that address communications policy issues), legal expertise, an understanding of and insight into government affairs and activities, and an understanding of our business and the communications infrastructure industry. |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Andrea J. Goldsmith | | Age: 57 | Director Since: 2018 |
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Principal Occupation: Dean of Engineering and Applied Science and Professor of Electrical and Computer Engineering, Princeton University | | Ms. Goldsmith was appointed to the Board effective February 2018. Ms. Goldsmith has served as the Dean of Engineering and Applied Science and Arthur LeGrand Doty Professor of Electrical and Computer Engineering at Princeton University since September 2020. From 2012 to September 2020, Ms. Goldsmith served as the Stephen Harris professor in the School of Engineering at Stanford University and served as a professor, associate professor or assistant professor at Stanford University from January 1999 to 2012. Ms. Goldsmith also founded and served as Chief Technology Officer ("CTO") of Plume WiFi (formerly, Accelera, Inc.) from August 2010 to August 2014 and Quantenna Communications, Inc. (formerly, mySource Communications, Inc.) from 2005 to 2009. In addition, Ms. Goldsmith currently serves as Chair of the Committee on Diversity, Inclusion and Ethics at the Institute of Electrical and Electronics Engineers and is a member of the President's Council of Advisors on Science and Technology (PCAST). Ms. Goldsmith is a frequent lecturer and writer regarding wireless technologies. Ms. Goldsmith also serves on the board of directors of Intel Corporation and Medtronic plc, each a public company. Skills and Qualifications: Ms. Goldsmith brings to our Board extensive and advanced know-how and understanding of telecommunications technologies and emerging related technological trends, Diversity, Equity and Inclusion expertise, public company corporate governance knowledge, executive experience and an academic perspective. |
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Tammy K. Jones | | Age: 56 | Director Since: 2020 |
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Principal Occupation: Co-Founder and CEO, Basis Investment Group, LLC | | Ms. Jones was appointed to the Board as a director effective November 2020. Ms. Jones is the Co-Founder and Chief Executive Officer of Basis Investment Group, LLC (founded in 2009), a multi-strategy commercial real estate investment platform. Ms. Jones has over 25 years of commercial real estate investment and lending experience. From 2004 to 2009, Ms. Jones served as head of the fixed and floating rate Capital Markets Lending Division at CWCapital LLC, a U.S. debt investment platform). From 1997 to 2004, Ms. Jones served as Senior Vice President at Commercial Capital Initiatives, Inc., a commercial real estate company. Ms. Jones serves as Board Chair of Veris Residential, Inc. (formerly Mack-Cali Realty Corporation), a public company, as well as member of its ESG, Audit and Strategic Review Committees, and has previously served as Lead Independent Director from June 2020 to March 2021. From April 2016 to September 2017, Ms. Jones served on the board of directors of Monogram Residential Trust, Inc., formerly a public company. Ms. Jones serves as Chair of the Real Estate Executive Council and is also a member of The Executive Leadership Council. Ms. Jones formerly served as a Trustee of the Georgia State University Foundation.
Skills and Qualifications: Ms. Jones brings to our Board executive experience (including as CEO of a commercial real estate investment company), extensive commercial real estate and capital markets experience, ESG and Diversity, Equity and Inclusion expertise, financial and transactional acumen, investment and capital allocation expertise, strategic insight and public company corporate governance knowledge. |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Anthony J. Melone | | Age: 61 | Director Since: 2015 |
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Principal Occupation: Former EVP and CTO, Verizon Communications
| | Mr. Melone was appointed to the Board as a director in May 2015. Mr. Melone has over three decades of experience in the telecommunications industry, including having served as EVP and CTO for Verizon Communications from December 2010 to April 2015. In addition, Mr. Melone served in a variety of positions with Verizon Wireless from 2000 to December 2010, including as SVP and CTO from 2007 to December 2010. From February 2016 to May 2020, Mr. Melone served on the board of directors of ADTRAN, Inc., a public company. Skills and Qualifications: Mr. Melone brings to our Board extensive and advanced know-how and understanding of telecommunications technologies and emerging related technological trends, relevant executive experience (including with a leading telecommunications company), industry strategic insight, an understanding of our business and the communications infrastructure industry, and extensive knowledge of our customers, including such customers' anticipated priorities, goals and objectives.
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W. Benjamin Moreland | | Age: 58 | Director Since: 2006 |
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Principal Occupation: Former President, CEO and Executive Vice Chairman ("EVC"), Crown Castle International Corp.
| | Mr. Moreland was appointed to the Board as a director in August 2006 and served as our EVC from June 2016 to December 2017. Prior to his appointment as EVC, he served as our President and CEO from July 2008 and as our EVP and CFO from February 2004 to June 2008, having been appointed CFO and Treasurer in April 2000. Prior to being appointed CFO, he had served as our SVP and Treasurer, including with respect to our domestic subsidiaries, since October 1999. Mr. Moreland serves as the Chair of the board of directors of Clear Channel Outdoor Holdings, Inc., a public company, and as a director on the board of directors of Houston Methodist Hospital. From May 2016 to September 2017, Mr. Moreland served on the board of directors of Monogram Residential Trust, Inc., which was a public company until its acquisition by an affiliate of Greystar Growth and Income Fund, LP in September 2017. From January 2008 to March 2018, Mr. Moreland served on the board of directors of Calpine Corp., which was a public company until its acquisition by an affiliate of Energy Capital Partners. Skills and Qualifications: Mr. Moreland brings to our Board varied executive experience (including as our CEO, CFO, and EVC), extensive knowledge and understanding of our business and the communications infrastructure industry, financial and transactional acumen, and strategic insight. |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Kevin A. Stephens | | Age: 60 | Director Since: 2020 |
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Principal Occupation: Former EVP and President, Business Services Division, Altice USA, Inc. | | Mr. Stephens was appointed to the Board in December 2020. Mr. Stephens served as the Executive Vice President and President, Business Services Division of Altice USA, Inc. ("Altice"), a provider of broadband communications and video services, from December 2015 to January 2019. Mr. Stephens served as President, Commercial and Advertising Operations of Suddenlink Communications, Inc. ("Suddenlink"), an internet and cable provider and a subsidiary of Altice, from 2006 to 2015. Prior to joining Suddenlink, Mr. Stephens served in various senior leadership positions at Cox Communications, Inc., Choice One Communications and Xerox Corporation. Mr. Stephens is currently a member of the investment committee at Cultivation Capital, a private equity firm, and is also a member of The Executive Leadership Council. Mr. Stephens currently serves on the board of directors of Consumer Cellular Inc., a private company, and Keysight Technologies, Inc., a public company.
Skills and Qualifications: Mr. Stephens brings to our Board extensive experience in the fiber and telecommunications industry, sales and marketing expertise, executive experience, industry strategic insights and investment experience. |
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Matthew Thornton, III | | Age: 63 | Director Since: 2020 |
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Principal Occupation: Former EVP and COO, FedEx Freight Corporation, FedEx Corporation | | Mr. Thornton was appointed to the Board effective November 2020. Mr. Thornton served as Executive Vice President and COO of FedEx Freight Corporation, a subsidiary of FedEx Corporation ("FedEx") from May 2018 until his retirement in November 2019. Mr. Thornton joined FedEx Corporation in November 1978 and held various management positions with the company, including Senior Vice President, U.S. Operations of Federal Express Corporation ("FedEx Express"), a subsidiary of FedEx, from September 2006 to May 2018, Senior Vice President – Air, Ground and Freight Services of FedEx Express from July 2004 to September 2006, and Vice President – Regional Operations (Central Region), FedEx Express from April 1998 to July 2004. Mr. Thornton serves on the board of directors of Sherwin Williams Company, a public company, and on the board of trustees of Nuveen funds, overseeing approximately 150 portfolios within the fund complex. Mr. Thornton is also a member of The Executive Leadership Council.
Skills and Qualifications: Mr. Thornton brings to our Board extensive executive experience from a large multinational company, significant strategic operations expertise, logistics management experience and public company corporate governance knowledge. |
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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V. INFORMATION ABOUT THE BOARD OF DIRECTORS
Board Matrix
The following matrix provides information regarding the members of our Board (other than the directors that have not been nominated for re-election at the Annual Meeting), including certain types of knowledge, skills, experiences and attributes possessed by one or more of our directors which our Board believes are relevant to our business, industry or real estate investment trust ("REIT") structure. The matrix does not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not mean that a director does not possess it. In addition, the absence of a particular knowledge, skill, experience or attribute with respect to any of our directors does not mean the director in question is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill and experience listed below may vary among the members of the Board.
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Board Leadership Structure
Since May 2002, J. Landis Martin has served as our independent Board Chair. In accordance with the previously disclosed transition plan relating to the Board's mandatory retirement policy, Mr. Martin has not been nominated for re-election at the Annual Meeting. In anticipation of Mr. Martin's retirement from the Board, on February 17, 2022, the Board appointed P. Robert Bartolo as the new independent Board Chair, effective immediately prior to the Annual Meeting.
Since our initial public offering in 1998, the roles of Board Chair and CEO have been filled by two different persons at all times. Notwithstanding the foregoing, our Corporate Governance Guidelines provide that the Board does not maintain a firm policy with respect to the separation of the offices of Chair and CEO. The Board believes that it is in the best interests of our stockholders for the Board to make a determination regarding the separation or combination of these roles each time it elects a new Chair or CEO based on the relevant facts and circumstances applicable at such time.
Meetings
During 2021, the Board held four meetings (four regularly scheduled and no special). Each incumbent director attended at least 75% of the aggregate of (1) the total number of meetings of the Board during the period in which he or she was a director and (2) the total number of meetings of all Board committees ("Committees") on which he or she served during the period in which he or she was a director.
Our Corporate Governance Guidelines provide that, while the Board understands that scheduling conflicts may arise resulting in absences, the Board strongly encourages each director to attend our annual meeting of stockholders. Each of the directors serving on the Board at the time of our 2021 annual meeting of stockholders ("2021 Annual Meeting") attended the 2021 Annual Meeting, which was held virtually.
The non-management directors generally meet in executive session at each regularly scheduled meeting of the Board (typically four times per year). In addition, the Board meets at least once a year in executive session with only independent directors present. Our Corporate Governance Guidelines provide that if the Board Chair is a non-management director, the Board Chair shall preside at such executive sessions, and if the Board Chair is a member of management, the non-management directors may elect a chair to preside at such executive sessions.
Risk Oversight
Management is primarily responsible for assessing and managing our various exposures to risk on a day-to-day basis. Our Internal Audit department serves as the primary monitoring and testing function for company-wide policies and procedures, including policies and procedures regarding our risk management strategy. Such strategy includes identifying, evaluating and addressing potential risks that may exist at the enterprise, strategic, financial, operational, compliance and reporting levels. The Board is responsible for overseeing and assessing our risk management strategy. In addition, at least annually, the Board, through its Committees, and management engage in an interactive review and evaluation of the key risks that are essential and mission critical to our business and operations ("Mission Critical Risks"). The Board exercises these responsibilities periodically as part of its meetings and also through its Committees, each of which examines various components of risk in connection with its responsibilities.
Our Vice President—Audit and Security reports to the Audit Committee and provides periodic updates (generally quarterly) to the Audit Committee with respect to the Internal Audit department's activities, including with respect to risk management matters and the audit agenda. In addition, an overall review of risk is inherent in the Board's consideration of our long-term strategies and in the transactions and other matters presented to the Board, including capital expenditures, acquisitions and divestitures, and financial matters. The Board's role in risk oversight is consistent with the Board's current leadership structure, with the CEO and other members of senior management having responsibility for assessing, managing and mitigating, when appropriate, risk exposure, and the Board and its Committees providing oversight and review in connection with those efforts.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Oversight of Cybersecurity Risk
Our VP—Audit and Security reports on a periodic basis (generally quarterly, or more frequently, as needed) to the Audit Committee regarding cybersecurity risk exposure and cybersecurity risk management strategy. The Board also may review and assess cybersecurity risks in connection with its review of the Company’s Mission Critical Risks. Our dedicated team of cybersecurity specialists has implemented a robust program designed to detect, prevent and respond to threats and malicious activity. We also maintain a Security Operations Center (SOC) that provides a mechanism for addressing cyberthreats before they comprise data security. Through a combination of a threat management platform and our dedicated team of cybersecurity specialists, our SOC continuously monitors and proactively isolates and analyzes cybersecurity alerts to position us to mitigate cybersecurity risks. Through company-wide policies, mandatory training and end-user testing, we position our employees to recognize threats and report (and when appropriate, escalate) them. We have developed an incident response plan to handle suspected loss of, or unauthorized access to, information. We work with third-party industry experts to conduct annual vulnerability assessments and penetration testing. In the past three years, we have not experienced a material information security breach. As such, we have not incurred any material expenses from cybersecurity breaches or any expenses from penalties or settlements related to a cybersecurity breach during that time. We are insured under a cyber liability insurance policy against losses stemming from cybersecurity incidents.
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CROWN CASTLE INTERNATIONAL CORP. | | 2022 PROXY STATEMENT |
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Board Committees
The Board has four standing Committees: Audit Committee, Compensation Committee, NESG Committee (formerly, the Nominating & Corporate Governance Committee) and Strategy Committee. The table below shows the current chairs and members of each standing Committee and the independence status of each Board member. On February 17, 2022, the Board approved certain changes to the composition of its Committees, effective immediately prior to the Annual Meeting, as further described in "I. Proxy Statement Summary—Snapshot of Director Nominees."
Copies of the Committee charters of each of the Audit Committee, Compensation Committee and the NESG Committee can be found under the Investors section of our website at crowncastle.com/investors/corporate-governance, and such information is also available in print to any stockholder who requests it through our Corporate Secretary. A summary of each standing Committee's functions is set forth below.
• Audit Committee
Number of Meetings in 2021: 9
Functions and Authority: The functions and authority of the Audit Committee include:
• provide oversight of:
• our financial statements and accounting practices;
• the quality and integrity of the financial statements and other financial information we provide to any governmental body or the public;
• our compliance with legal and regulatory requirements;
• the qualifications and independence of our independent registered public accountants ("Auditors");
• the performance of our internal audit function and the Auditors; and
• our systems of internal controls regarding finance, accounting, cybersecurity, legal compliance and ethics;
• assist the Board in overseeing and assessing our risk management strategy by examining risks within the Audit Committee's purview;
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• select and appoint the Auditors; and
• review and approve audit and non-audit services to be performed by the Auditors.
Audit Committee Financial Expert: The Board has determined that (1) Messrs. Bartolo and Hogan and Ms. Jones meet the requirements of an audit committee financial expert pursuant to applicable SEC rules and (2) each of the current members of the Audit Committee is financially literate. For information regarding each Audit Committee member's business experience, see "IV. Board of Directors."
For additional information regarding the Audit Committee, see "IX. Audit Committee Matters."
• Compensation Committee
Number of Meetings in 2021: 5
Functions and Authority: The functions and authority of the Compensation Committee include:
• assist the Board with its responsibilities relating to compensation of our executives;
• develop an overall executive compensation philosophy, strategy and framework consistent with corporate objectives and stockholder interests;
• design, recommend, administer and evaluate our executive compensation plans, policies and programs;
• administer our incentive compensation and equity-based compensation plans;
• review, determine and recommend to the Board (or the independent directors, as applicable) the compensation of the CEO and certain other executive officers;
• review whether our compensation plans, policies and programs are competitive and consistent with our long-term strategy, corporate values and accepted legal practices;
• retain, terminate and approve the fees of any compensation consultants to assist the Compensation Committee with its duties; and
• assist the Board in overseeing and assessing our risk management strategy by examining risks within the Compensation Committee's purview.
Executive Compensation Process and Procedures: Over the course of several meetings throughout the year, the Compensation Committee annually reviews executive compensation, including base salary, short-term incentive compensation, long-term incentive compensation and other benefits. In performing its duties, the Compensation Committee obtains input, as it deems necessary, from an independent compensation consultant ("Compensation Consultant") engaged directly by the Compensation Committee (while the Compensation Consultant is engaged by the Compensation Committee, it works with management, including members of our human resources department and our CEO, in developing compensation studies as directed by the Compensation Committee). For 2021, Meridian Compensation Partners served as the Compensation Consultant. In addition, in the case of compensation decisions relating to executives other than the CEO, the Compensation Committee seeks and obtains input from the CEO. The Compensation Committee regularly holds executive sessions at its meetings during which management, including the CEO, is not in attendance. Additional information regarding the Compensation Committee's processes and procedures for consideration and determination of executive compensation is provided below at "VIII. Executive Compensation—Compensation Discussion and Analysis."
• Nominating, Environmental, Social and Governance Committee
Number of Meetings in 2021: 4
Functions and Authority: In 2021, our Board expanded the responsibility of the NESG Committee (formerly, the Nominating & Corporate Governance Committee) to include assisting the Board with ESG oversight. The functions and authority of the NESG Committee include:
• assist the Board by identifying individuals qualified to become Board members and recommend director nominees for election by the stockholders or for appointment to fill vacancies;
• recommend to the Board director nominees for each Committee of the Board;
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• review and determine the compensation of the non-employee directors of the Board;
• assist the Board in overseeing the Company's ESG strategy, goals and initiatives;
• advise the Board about appropriate composition of the Board and its Committees;
• advise the Board about and recommend to the Board appropriate corporate governance practices and assist the Board in implementing those practices;
• lead the annual evaluation of the Board and its Committees; and
• assist the Board in overseeing and assessing our risk management strategy by examining risks within the NESG Committee's purview.
Common Stock Ownership and Retention Guidelines. The Board has adopted stock ownership and retention guidelines generally providing that each of our non-employee directors should seek to establish and maintain by the fifth anniversary of the date such director is appointed to the Board beneficial ownership of a number of shares of Common Stock having a value sufficient to satisfy a stock ownership level of three times the Annual Equity Grant (defined below) (exclusive of the additional equity award amount for a non-employee Board Chair) for non-employee directors (currently $230,000). A non-employee director generally has until the fifth anniversary after the date of an increase in the Annual Equity Grant to meet the incremental increase to the stock ownership level as a result of such Annual Equity Grant increase.
Common Stock retention guidelines for non-employee directors are substantially similar to those applicable to our executives as described in "VIII. Executive Compensation—Compensation Discussion and Analysis—Other Matters—Stock Ownership and Retention Guidelines" below.
Consideration of Director Nominees: The NESG Committee has the authority to recommend nominees for election as directors to the Board. In considering candidates for the Board, the NESG Committee takes into account the entirety of each candidate's credentials and, subject to the discussion below, currently does not maintain any specific minimum qualifications that must be met by an NESG Committee recommended nominee.
While the NESG Committee does not maintain a formal list of minimum qualifications in making its evaluation and recommendation of candidates, the NESG Committee will generally consider, among other factors, whether prospective nominees are able to read and understand basic financial statements, have relevant business experience, have industry or other specialized expertise and have high moral character. In addition, the NESG Committee considers issues of diversity, including with respect to experience, expertise, viewpoints, skills, race, ethnicity and gender, in connection with the director selection process. The NESG Committee may attribute greater or lesser significance to different factors at particular times depending upon the needs of the Board, its composition or the NESG Committee's perception about future issues and needs.
The NESG Committee may consider candidates for the Board from any reasonable source, including from a third party search firm engaged by the NESG Committee or through stockholder recommendations (provided the procedures set forth below in "X. Other Matters—Stockholder Recommendation of Director Candidates" are followed). The NESG Committee does not intend to alter the manner in which it evaluates candidates based on whether the candidate is recommended by a stockholder. However, in evaluating a candidate's relevant experience, the NESG Committee may consider previous experience as a member of the Board.
In July 2020, as part of a thorough review of board refreshment best practices and policies, the Board instituted a mandatory Board retirement policy, pursuant to which the Board will not nominate any non-employee director who has reached 72 years of age. Under a transition plan approved by the Board in connection with the retirement policy, Lee W. Hogan and J. Landis Martin have not been nominated for re-election at the Annual Meeting. As noted above, in anticipation of Mr. Martin's retirement from the Board, the Board has appointed Mr. Bartolo as the new independent Board Chair, effective immediately prior to the Annual Meeting.
The NESG Committee has structured the Board such that there are directors of varying tenures, with new directors and perspectives joining the Board every few years as circumstances warrant, while retaining the institutional memory of longer-tenured directors. The NESG Committee believes that longer-tenured directors, balanced with less-tenured directors, enhance the Board's oversight capabilities and its collective business acumen.
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• Strategy Committee
Number of Meetings in 2021: 4
Functions and Authority: The functions and authority of the Strategy Committee include:
• assist the Board in overseeing the development and execution of the Company’s strategy, including its strategic plans and initiatives;
• review and assess with management the Company’s strategy development and execution;
• advise the Board and management on strategy-related issues and direction; and
• assist the Board in overseeing and assessing our risk management strategy by examining risks within the Strategy Committee's purview.
Board Independence
The Board has affirmatively determined that each member of the Board standing for election at the Annual Meeting and each other director nominee, except Mr. Brown (our current President and CEO) and Mr. Moreland (our former President and CEO and EVC), has no material relationship with us and is an independent director, as defined under NYSE listing standards.
To assist in its determination of director independence, the Board has adopted certain categorical standards, as set forth on Appendix B hereto. The Board determined the independence of the aforementioned directors and director nominees taking into account such standards.