Exhibit 10.47
DATED 23 January 1998
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CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD (1)
AND
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (2)
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DEED OF GRANT OF OPTION
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London
CONTENTS
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Clause Heading Page
1 Definitions..............................................................1
2 Grant of Options.........................................................3
3 Exercise and lapse of the Options........................................3
4 Option to be personal to Employee........................................6
5 Shares to be available and shares subscribed for to be subject
to certain restrictions..................................................6
6 Alteration of capital of the Company.....................................7
7 Procedure for exercise of the Option.....................................7
8 Rights of Shares and listing.............................................8
9 Taxation.................................................................8
10 Governing Law............................................................9
11 Notices..................................................................9
THIS DEED is made on 1998 BETWEEN:
(1) CASTLE TRANSMISSION SERVICES (HOLDINGS) LTD (registered number 3242381)
whose registered office is situated at Warwick Technology Park, Gallows
Hill, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (the "COMPANY");
(2) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (the
"EMPLOYEE").
WHEREAS the Company wishes to grant the Employee options to acquire shares in
the Company and to enter into certain other arrangements in relation to such
shares.
NOW THIS DEED WITNESSES as follows:
1 Definitions
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1.1 In this Deed the following expressions have the following meanings:
"AGGREGATE INVESTMENT" means the aggregate subscription monies paid by the
Investors for shares of the Company;
"ARTICLES" means the Company's Articles of Association from time to time;
"AUDITORS" means the auditors for the time being of the Company;
"BAD LEAVER" means the Employee ceasing to be a Relevant Employee in any
circumstances prior to 28 February 1998 or the Employee ceasing to be a
Relevant Employee on or after 28 February 1998 in circumstances resulting
from either (a) the giving by the Employee of notice to the Company or any
of its subsidiaries of his intention to terminate his employment in order
to take up alternative employment outside the United States of America or
(b) the termination of the Employee's employment with the Company or any of
its subsidiaries in circumstances involving a repudiatory breach by the
Employee of his employment contract or in circumstances which would entitle
the Company, or as the case may be, any subsidiary, summarily to terminate
his employment without notice;
"BOARD" means the board of directors of the Company;
"CCI" means Crown Castle International Corp, a Delaware corporation;
"CHANGE OF CONTROL" means any party (including an Investor) acquiring 45%
or more of the Company's issued share capital or 40% or more of the
Company's issued share capital being sold by any party or parties;
"EXERCISE PRICE" means the price per share at which the Employee is granted
the right to acquire Ordinary Shares and Preference Shares on exercise of
the Option, being 1p per Ordinary Share and 1p per Preference Share or such
other price as may result from an adjustment pursuant to Rule 6;
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"GOOD LEAVER" means the Employee ceasing to be a Relevant Employee other
than as a Bad Leaver;
"GROUP COMPANY" means in relation to the Company, any subsidiary of that
Company ("subsidiary" having the meaning ascribed to it by sections 736 and
736A Companies Act 1985 (as amended));
"INTERNAL RATE OF RETURN" shall be that rate at which all Investment Gain
or return of capital to the Investors must be discounted to equal the
Aggregate Investment. The internal rate of return shall be compounded
annually. In calculating the internal rate of return each amount taken
into account as Investment Gain or a return of capital shall be discounted
from the date of distribution of such amount back to 28th February 1997 (or
to the date of investment in respect of any share capital of the Company
subscribed for by the Investors after 28th February 1997) with each period
for which the calculation is made rounded to the nearest number of whole
months. An example of the calculation of internal rate of return is set
out in the annexure to this Agreement;
"INVESTMENT GAIN" means the aggregate of all:
(a) dividends received in respect of Ordinary Shares or Preference Shares
by the Investors;
(b) proceeds of the redemption of Preference Shares paid to the Investors;
and
(c) the value of the Company's equity share capital held by the Investors
on a public offering of the Company's Shares, a Qualifying Sale or a
Change of Control, as the case may be;
"INVESTORS" means Berkshire Fund IV L.P., Berkshire Investors LLC, Candover
Investments plc, Candover (Trustees) Limited and Candover Partners Limited
(as general partner of each of the Candover 1994 UK Limited Partnership,
the Candover 1994 UK No. 2 Limited Partnership, the Candover 1994 US No. 1
Limited Partnership and the Candover 1994 US No. 2 Limited Partnership,
TeleDiffusion de France International S.A. and CCI (including any
successors to such entities);
"THE LONDON STOCK EXCHANGE" means the London Stock Exchange Limited;
"ORDINARY SHARE" means, subject to Rule 6, an Ordinary Share of 1p of the
Company;
"PREFERENCE SHARE" means, subject to Rule 6, a Preference Share of 1p of
the Company;
"QUALIFYING SALE" means the sale by an Investor of more than 25% of the
Ordinary Shares and the Preference Shares then held by that Investor;
"RELEVANT EMPLOYEE" means a director or an employee of the Company or any
Group Company;
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"SHARE CAPITAL" means the Company's entire issued share capital for the
time being comprising all the issued Ordinary Shares and Preference Shares;
1.2 Any reference herein to any enactment shall be construed as including a
reference to that enactment as the same may from time to time be amended or
re-enacted.
1.3 Wherever the context so admits or requires words in the singular shall
include the plural and vice versa.
2 Grant of Options
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2.1 The Company hereby grants two options (the "A OPTION" and the "B OPTION"
respectively and together the "OPTIONS") by way of this Deed to the
Employee, on and subject to the terms of this Deed.
2.2 The A Option is to acquire on and subject to the terms of this Deed for
cash at par up to a maximum of 50,000 Ordinary Shares and 49,950,000
Preference Shares (the "A OPTION SHARES") at the Exercise Price.
2.3 The B Option is to acquire for cash at par up to a maximum of 50,000
Ordinary Shares and 49,950,000 Preference Shares (the "B OPTION SHARES") at
the Exercise Price.
2.4 No consideration is payable by the Employee for the grant of the Options.
3 Exercise and lapse of the Options
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A. The A Option
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3.1 The Employee's rights to subscribe for A Option Shares under this Deed
shall, subject to Rule 3.2, vest in and become exercisable by the Employee
up to the maximum numbers of A Option Shares set out below provided that
the Employee is a Relevant Employee on the following dates (each a "SERVICE
DATE"):
Service Date Ordinary Shares Preference Shares
------------ --------------- -----------------
28th February 1998 10,000 9,990,000
28th February 1999 10,000 9,990,000
28th February 2000 10,000 9,990,000
28th February 2001 10,000 9,990,000
28th February 2002 10,000 9,990,000
====== ==========
Total number of A Option Shares 50,000 49,950,000
On successive Service Dates, A Option Shares which have vested on previous
Service Dates but in respect of which the A Option has not been exercised
will
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continue to be exercisable by the Employee subject to the provisions
of this Deed.
3.2 The Employee's rights to subscribe for A Option Shares under this Deed
shall vest in and become exercisable by the Employee in full on a Change of
Control (to the extent they have not vested in the Employee at such time)
provided the Employee is a Relevant Employee on the date of such Change of
Control.
B. The B Option
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3.3 (a) The Employee's rights to subscribe for B Option Shares under this Deed
shall vest in and become exercisable by the Employee in full on the
date of a Qualifying Trigger Event provided that the Employee is a
Relevant Employee on such date.
(b) For the purposes of this Rule 3.3 a "Qualifying Trigger Event" shall
mean the issue of a certificate from the Company to the Employee
certifying that:
(i) a public offering of the shares of the Company has realised (or
would have realised had the Investors elected to participate in
such offering) for each of the Investors cash amounts equivalent
to an internal rate of return in excess of 30% and a return
equal to or in excess of 2.5 times the sums subscribed by the
relevant Investor or Investors for shares of the Company ("THE
HURDLE RETURN");
(ii) a Qualifying Sale has realised for the Investor in question cash
amounts equivalent to the Hurdle Return; or
(iii) a Change of Control has realised for an Investor or Investors
cash amounts equivalent to the Hurdle Return.
3.4 If any of the events described in Rule 3.3(b)(i), (ii) or (iii) shall occur
but the Hurdle Return is not realised on such event, then the Company shall
review, on the 28 February next following and on an annual basis until 28
February 2002 thereafter, whether the Hurdle Return has been achieved. If
the Company shall certify that the Hurdle Return has been achieved then the
issue of such certificate shall be treated as a Qualifying Trigger Event
and the Employee's rights to subscribe for B Option Shares shall vest in
full and become exerciseable by the Employee on the date of such
certificate provided that the Employee is a Relevant Employee on such date.
3.5 If the Employee is a Relevant Employee on 28th February 2002 in
circumstances where a Qualifying Trigger Event has not occurred, the
Company shall nevertheless certify to the Employee whether each of the
Investors has achieved the Hurdle Return (Investment Gain for this purpose
being calculated by reference to the value of the Company's equity share
capital as at 28th February 2002). If the Company shall certify that the
Hurdle Return has been achieved then the issue of such certificate shall be
treated as a Qualifying Trigger Event
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and the Employee's rights to subscribe for B Option Shares under this Deed
shall vest in full and become exercisable by the Employee on the date of
such certificate provided that the Employee is a Relevant Employee on such
date.
3.6 If the Employee shall cease to be a Relevant Employee and is a Good Leaver
before a Qualifying Trigger Event and between any of the dates mentioned in
the first column below ("RELEVANT PERIODS") then the Employee shall be
entitled to subscribe for such number of B Option Shares as shall be
indicated in the second and third columns below on the occurrence of a
Qualifying Trigger Event for the purposes of Rule 3.3, Rule 3.4 or Rule
3.5:
RELEVANT PERIODS ORDINARY SHARES PREFERENCE SHARES
(all dates inclusive)
28 February 1998 to
27 February 1999 12,500 12,487,500
28 February 1999 to
27 February 2000 12,500 12,487,500
28 February 2000 to
27 February 2001 12,500 12,487,500
28 February 2001 to
28 February 2002 12,500 12,487,500
====== ==========
TOTALS 50,000 49,950,000
Rules 3.3, 3.4, or 3.5, as the case may be, shall apply mutatis mutandis to
the question of whether a Qualifying Trigger Event has occurred.
3.7 If the Employee believes that the Company should have issued a certificate
under Rules 3.3, 3.4, 3.5 or 3.6 but the Company disagrees, then the
Employee or the Company may require the appointment of a suitably qualified
independent third party ("THE EXPERT") to determine whether the criteria
set out in Rule 3.3(a)(i), Rule 3.3(b)(ii), Rule 3.3(b)(iii), Rule 3.4 or
Rule 3.5 have been satisfied so that the Company should have issued a
certificate that a Qualifying Trigger Event has occurred and that the
Hurdle Return has been achieved. If the Expert shall demonstrate that a
Qualifying Trigger Event has occurred or the Hurdle Return has been
achieved then Rule 3.3(a) shall apply and his costs shall be borne by the
Company. In any other case the costs of the Expert shall be borne by the
Employee. The Expert shall act as an expert and not as an arbitrator and
failing agreement between the Company and the Employee as to his identity
he shall be appointed by the President for the time being of the Institute
of Chartered Accountants in England and Wales.
C. Provisions applicable to the A and the B Option
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3.8 In the event that the Employee shall cease to be a Relevant Employee in any
circumstances, then the Employee (or his personal representatives in the
case of his death) may exercise all or any part of the Options which have,
at the time of the Employee's death or the termination of his employment,
vested in the Employee as set out in Rules 3.1, 3.2, 3.3, 3.4 or 3.5 and,
if the Employee is a Good Leaver before the Qualifying Trigger Event, then
Rule 3.6 shall also apply. Any exercise of the Options pursuant to this
Rule 3.8 must take place within 6 months of the date of the Employee's
death or in any other case within 90 days from the date on which the
Employee's employment terminated. If such exercise would not be permitted
under the Listing Rules of the London Stock Exchange (or the rules of any
other relevant Stock Exchange) within these periods, the period for
exercise shall commence on the date when such restriction shall cease to
apply.
3.9 Any rights to subscribe for Option Shares which have not vested on the date
on which the Employee ceases to be a Relevant Employee shall, subject to
Rule 3.6, lapse and terminate automatically on the date of such cessation.
3.10 The Options shall lapse and terminate automatically insofar as they have
not been exercised whether by the Employee or by his personal
representatives and whether or not any rights to subscribe for Option
Shares have vested at 5.30 pm (London time) on 28th February 2004.
3.11 It shall be a condition of the Options being granted that in the event of
the Employee ceasing to be a Relevant Employee (for whatever reason) he
shall not be entitled to any compensation whatsoever by reason of lapse of
his rights under the Options or by reason of any termination or alterations
of rights or expectations thereunder.
4 Option to be personal to Employee
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4.1 The Options shall be personal to the Employee and shall not be capable of
being transferred or assigned by him but may be exercised by an Employee's
personal representatives as provided in this Deed in the event of the death
of the Employee.
4.2 The Employee shall in no way sell, transfer, charge, mortgage, encumber or
create any interest in favour of any third party over in respect of the
Options.
4.3 If the Employee does or suffers to be done any act or thing whereby he
would or might be deprived of the legal or beneficial ownership of the
Options then the Options shall lapse forthwith and the Company shall not
knowingly permit the exercise of the Options.
5 Shares to be available and shares subscribed for to be subject to certain
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restrictions
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5.1 The Company shall at all times keep available sufficient unissued Ordinary
Shares and Preference Shares to satisfy the Options to the extent that they
are then outstanding except to the extent that arrangements are made for
such
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Options to the extent the same are then outstanding to be satisfied by the
transfer of Ordinary Shares and Preference Shares which have already been
issued.
5.2 The Employee acknowledges that any Ordinary Shares and Preference Shares
issued to him (or to his personal representatives) pursuant to the exercise
of either the A or B Options are to be treated as Shares of an Employee
Member for the purposes of the Articles and accordingly will be subject,
amongst other things, to the provisions of Article 5.
6 Alteration of capital of the Company
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6.1 In the event of any capitalisation issue (other than a capitalisation issue
to which section 249 Income and Corporation Taxes Act 1988 applies) or
rights issue or any sub-division, consolidation, conversion or re-
designation of Ordinary Shares and Preference Shares or any reduction of
the share capital of the Company, the nominal value and/or the number of
Ordinary Shares and Preference Shares which are the subject of the Options
and/or the Exercise Price thereof shall be adjusted by the Board in such
manner as the Auditors shall confirm in writing as being in their opinion
fair and reasonable.
6.2 Any such adjustment shall be made on the basis that the amount payable by
the Employee on full exercise of the Options shall remain as nearly as
possible the same as (but shall not be greater than) it was before such
event. Provided however that no such adjustment shall be made to the extent
that it would result in a share being issued in consideration of the
payment of an Exercise Price less than its nominal value.
6.3 If any adjustment falls to be made pursuant to Rule 6, the Company shall
send to the Employee particulars of the revised basis of subscription or
other exercise payment within 28 days after determination of the matter in
question.
7 Procedure for exercise of the Option
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7.1 The Options shall be exercisable by notice in writing given to the Company
by the Employee, or after his death by his personal representatives in
accordance with Rule 3 and (subject to Rule 3) the Options may be exercised
at one time or from time to time in respect of Shares the subject of the
Options. Until exercised in full, the Options shall be exercisable over the
remaining Shares which are the subject of the Options up to the maximum
specified in Rules 2.2 and 2.3.
7.2 Any notice exercising the Options shall not be treated as valid unless and
until a remittance from or on behalf of the Employee for the full amount of
the Exercise Price for each of the Ordinary Shares and Preference Shares in
respect of which the notice is given has been received by the Company.
7.3 Subject to:
(a) such consents as may be necessary;
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(b) compliance with the terms of the Options;
(c) if any of the shares subject to the Options are at the relevant time
listed on the London Stock Exchange or permitted to be dealt in on the
Alternative Investment Market:
(i) the Ordinary Shares in respect of which an Option has been
exercised having been admitted to the Official List or permitted
to be dealt in on the Alternative Investment Market (as the case
may be) by the London Stock Exchange; and
(ii) there being no restriction (imposed by the Listing Rules of the
London Stock Exchange or otherwise) on the allotment and issue
of any shares to the Employee
the Company shall within 28 days after the later of the date of receipt of
a notice exercising the Option and (if applicable) the receipt of the
Auditors' confirmation under Rule 6 allot or procure the transfer of the
Ordinary Shares and Preference Shares in respect of which such Option has
been exercised to the Employee and deliver or procure the delivery of a
definitive share certificate or other document or evidence of title in
respect thereof to the Employee or his nominee, provided the Employee
retains beneficial ownership.
8 Rights of Shares and listing
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8.1 Any Ordinary Shares and Preference Shares allotted on any exercise of the
Options shall on allotment rank pari passu in all respects with the then
issued shares of the same class save as regards any rights attached thereto
by reference to a record date prior to the date of such exercise and will
be subject to all the provisions of the Articles of Association of the
Company relating to voting, dividend, transfer, transmission and otherwise.
8.2 The Company will, if any of the shares the subject of the Options are at
the relevant time listed on the London Stock Exchange or permitted to be
dealt in on the Alternative Investment Market, apply to the London Stock
Exchange for any shares of the same class in respect of which the Options
have been exercised to be admitted to the Official List or permitted to be
dealt in on the Alternative Investment Market (as the case may be) (except
in cases where the Option is satisfied by the transfer of Shares which have
already been admitted to the Official List or in respect of which
permission has been granted for them to be dealt in on the Alternative
Investment Market).
9 Taxation
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9.1 This Rule 9.1 applies where:
(a) the Company or any other person ("the Indemnified Party") is advised
that it is required to account for, or on account of, income tax under
sections 203-203L Income and Corporation Taxes Act 1988 (as amended
from time to time) and any regulations made thereunder or employees'
8
national insurance contributions under paragraph 3 of Schedule 1 to
the Social Security Contributions and Benefits Act 1992 (as amended
from time to time) and any regulations made thereunder and/or by
reason of any Inland Revenue or Department of Social Security practice
then applicable; and
(b) the obligation to account for such tax or taxes or contributions
arises as a consequence of the grant of the Option, exercise (in whole
or in part) of the Option or the transfer of shares to the Employee
following exercise of the Option.
9.2 Where Rule 9.1 applies, the Employee shall forthwith on demand being made
pay to the Indemnified Party an amount equal to such tax or taxes or
contributions to the extent that the Indemnified Party cannot obtain
reimbursement of such tax, taxes or contributions by deducting such amount
in accordance with regulation 7 of the Income Tax (Employments) Notional
Payments) Regulations 1994) ("THE SHORTFALL"). Until full payment of the
Shortfall has been made in accordance with this Rule 9.2 the Company shall,
notwithstanding Rule 7 or any other Rule to the contrary, be entitled not
to allot Ordinary Shares or Preference Shares or to withhold delivery of
the share certificate or any other document or evidence of title in respect
of the shares acquired following exercise of the Options.
It is hereby certified that the grant of these Options does not constitute
a transaction forming part of a larger transaction or series of
transactions in respect of which the amount or value, or aggregate amount
or value of the consideration exceeds (Pounds)60,000.
10 Governing Law
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10.1 This Agreement shall be governed by and construed and interpreted in
accordance with the laws of England.
11 Notices
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11.1 All notices and other communications required or permitted under this
agreement shall be in writing and shall be delivered personally, sent by
air courier (in the case of notices given by a party in one jurisdiction to
a party in another), first class pre-paid post (in the case of a notice
given by a party in one jurisdiction to a party in the same jurisdiction),
telexed or sent by facsimile transmission (and promptly confirmed by air
courier service in the case of notices sent from one jurisdiction to
another) and by first class pre-paid post in the case of notices sent by a
party in one jurisdiction to another party in the same jurisdiction. Any
such notice shall be deemed given when so delivered personally, telexed or
sent by facsimile transmission or air courier or first class pre-paid post
to the parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
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▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
The Company: if to the Company, to:
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the Company
at its registered office for the time being
Attention: Chief Executive Officer
SIGNED as a DEED and )
DELIVERED by )
CASTLE TRANSMISSION SERVICES )
(HOLDINGS) LTD in the presence of: )
..............................
Director
..............................
Director/Secretary
SIGNED as a DEED and )
DELIVERED by )
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ )
in the presence of: )
........................
Witness (Signature)
Name:
Address:
Occupation
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The Annexure
Example of IRR Calculation
Example Example
Assumptions: One Two
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Date Aggregate Investment made 28 Feb 97 28 Feb 97
Date public offering held 28 Nov 97 28 Nov 98
Aggregate Investment
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Preference Shares 999,000 999,000
Ordinary Shares 1,000 1,000
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Aggregate Investment 1,000,000 1,000,000
Investment Gain & Return of Capital
Required to Achieve 30% IRR [1]
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Redemption Proceeds 999,000 999,000
Value of Equity Shares 217,812 582,856
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Total Proceeds to Achieve 30% IRR 1,216,812 1,581,856
[1] The internal rate of return was calculated using Microsoft Excel's XIRR
function. Total proceeds assumed realised on date of public offering.
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