Clear Channel Nonqualified Deferred Compensation Plan

Exhibit 4.1

Clear Channel Nonqualified Deferred

Compensation Plan

TABLE OF CONTENTS

 

CLEAR CHANNEL

NONQUALIFIED DEFERRED COMPENSATION PLAN

WHEREAS , Clear Channel Communications, Inc. (the “Company”) has previously adopted the Clear Channel Communications, Inc. Nonqualified Deferred Compensation Plan (the “Original Plan”) to provide the opportunity for a select group of management or highly compensated employees to defer compensation; and

WHEREAS , the Original Plan had previously been amended and restated to comply with the requirements of new section 409A of the Internal Revenue Code of 1986 (the “Code”), as amended by the American Jobs Creation Act of 2004; and

WHEREAS , pursuant to the terms of the Original Plan, upon a change in control of the Company all participants with an Account under the Plan were to be fully vested and receive a lump sum payment following the change in control at which point the Original Plan was to terminate; and

WHEREAS , such a change in control occurred as a result of the merger of the Company with a wholly-owned subsidiary of CC Media Holdings, Inc. (“CC Media”), with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of CC Media (the “Merger”); and

WHEREAS , it is the Company’s intent to implement, and it is CC Media’s intention to adopt, the Clear Channel Nonqualified Deferred Compensation Plan (the “Plan”) upon the change in control caused by the Merger; and

WHEREAS , the creation of a new Plan following the termination of the Original Plan is permitted under final regulations promulgated under Section 409A of the Code since termination of the Original Plan is as a result of the change in control of the Company;

NOW, THEREFORE , this Agreement is entered into in order to set forth the terms of the Clear Channel Nonqualified Deferred Compensation Plan as follows:

 

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ARTICLE I

PURPOSE AND EFFECTIVE DATE

Section 1.01.

Title . This Plan shall be known as the Clear Channel Nonqualified Deferred Compensation Plan (hereinafter referred to as the “Plan”).

Section 1.02.

Purpose . The purpose of the Plan is to aid CC Media, Clear Channel Communications, Inc. and its affiliates and subsidiaries in retaining and attracting executive Employees and members of the Board and the CC Media Board by providing them with tax deferred savings opportunities. The Plan provides Board members and a select group of management or highly compensated employees of Clear Channel Communications, Inc. with the opportunity to elect to defer receipt of specified portions of compensation, and to have these deferred amounts treated as if invested in specified hypothetical investment benchmarks. It is the intention of CC Media that the Plan meet all of the requirements necessary to qualify as a nonqualified, unfunded, unsecured plan of deferred compensation within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1), and all Plan provisions shall be interpreted accordingly.

Section 1.03.

Effective Date . The effective date of this Plan is the first business day following the merger of the Company with a subsidiary of CC Media, a corporation formed by private equity funds sponsored by Bain Capital Partners, LLC and Thomas H. Lee Partners, LP.

 

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ARTICLE II

DEFINITIONS

For the purposes of this Plan, the following words and phrases shall have the meanings indicated, unless the context clearly indicates otherwise:

Section 2.01.

Administrative Committee . “Administrative Committee” means the Clear Channel Communications, Inc. Retirement Benefits Committee, or such other committee as appointed by the CC Media Board to administer the Plan.

Section 2.02.

Base Salary and Commission . “Base Salary and Commission” means all cash compensation other than Bonuses paid by the Company to or for the benefit of a Participant for services rendered or labor performed while a Participant, including but not limited to base salary and commission, and includes such cash compensation a Participant could have received in lieu of Deferrals hereunder and Employee contributions made on the Participant’s behalf to any qualified plan maintained by the Company or to any cafeteria plan maintained by the Company under Section 125 of the Code; provided, however, that “Base Salary and Commission” shall not include any amounts paid to a Participant as severance under any Company severance agreement, plan or policy or amounts of cash compensation earned prior to the Participant’s Termination of Employment but paid to a Participant more than 30 days following such Participant’s Termination of Employment or Retirement.

Section 2.03.

Beneficiary . “Beneficiary” means the person, persons or entity designated by a Participant, pursuant to Article VII hereof, to receive such payments as may become payable hereunder after the death of the Participant.

Section 2.04.

Board . “Board” means the Board of Directors of Clear Channel Communications, Inc.

Section 2.05.

Bonus or Bonuses . “Bonus” or “Bonuses” means the cash compensation paid by the Company to or for the benefit of a Participant for services rendered or labor performed while a Participant under a bonus arrangement, increased by Deferrals hereunder and Employee contributions made on his or her behalf to any qualified plan maintained by the Company or to any cafeteria plan maintained by the Company under Section 125 of the Code excluding amounts paid more than 30 days following Termination of Employment or Retirement.

 

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Section 2.06.

CC Media . “CC Media” means CC Media Holdings, Inc., or any successor entity by operation of law or affirmative assumption of the Plan, any trust created by CC Media for purposes of meeting CC Media’s obligations hereunder, and the obligations of CC Media with respect to the Plan.

Section 2.07.

CC Media Board . “CC Media Board” means the Board of Directors of CC Media.

Section 2.08

Change in Control . For purposes of this Plan, a “Change in Control” means any change in control as determined in accordance with Section 409A of the Code and any guidance or regulations promulgated thereunder.

Section 2.09.

Code . “Code” means the Internal Revenue Code of 1986, as amended. References to any provision of the Code or regulation (including a proposed regulation) thereunder shall include any successor provisions or regulations.

Section 2.10.

Company . “Company” means Clear Channel Communications, Inc., and any subsidiary or affiliated companies or entities authorized by the CC Media Board or the Administrative Committee to participate in the Plan.

Section 2.11.

Deferral Account . “Deferral Account” means the record of a Participant’s interest in this Plan represented by Deferrals, with all earnings thereon credited to such Deferrals on behalf of the Participant under the provisions of this Plan, and all losses, expenses, withdrawals and distributions thereon debited from such Deferrals.

Section 2.12.

Deferral Period . “Deferral Period” means the period of time specified by a Participant in a Participation Agreement in accordance with the provisions of the Plan which must elapse prior to a distribution of the Participant’s Deferral and Matching Contribution Accounts hereunder.

Section 2.13.

Deferrals . “Deferrals” means those portions of a Participant’s Eligible Compensation which the Participant elects to have withheld on a pre-tax basis from his or her Eligible Compensation and credited to his or her Deferral Account pursuant to Section 4.02 of the Plan.

 

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Section 2.14.

Designee . “Designee” means the Company’s senior human resources officers or other individuals to whom the Administrative Committee has delegated the authority to take action under the Plan. Wherever Administrative Committee is referenced in the Plan, it shall be deemed to also refer to Designee.

Section 2.15.

Director . “Director” means a nonemployee member of the Board or the CC Media Board.

Section 2.16.

Director’s Compensation . “Director’s Compensation” means that cash compensation paid by CC Media or the Company, as applicable, to or for the benefit of a Director for services rendered as a Director.

Section 2.17.

Director’s Deferral Election Form . “Director’s Deferral Election Form” means the form established from time to time by the Administrative Committee that a Director completes and submits to effect a Deferral hereunder.

Section 2.18.

Disability or Disabled . “Disability” or “Disabled” means a medically determinable physical or mental impairment of the Participant which can be expected to result in death or can be expected to last for a continuous period of at least twelve (12) months and for which the Participant has received income replacement benefits for a period of not less than three months under the Company’s accident or health plan covering the Participant.

Section 2.19.

Election Date . “Election Date” means the date established by the Administrative Committee as the date on or before which an Eligible Employee or Director must complete and submit a valid Participation Agreement or Director’s Deferral Election Form, as the case may be. The applicable Election Date can be no later than the following: (a) 30 days following the Eligible Employee or Director’s initial eligibility date as described in Section 3.01; provided, that, the election may only apply to compensation with respect to services performed after the election, or (b) December 15th prior to the next Plan Year if (a) above does not apply.

Section 2.20.

Eligible Compensation . “Eligible Compensation” means any Base Salary and Commission, Bonus, and Director’s Compensation, payable to a Participant during a Plan Year.

 

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Section 2.21.

Eligible Employee . “Eligible Employee” means an Employee who is eligible to participate in the Plan and is a member of a select group of management or highly compensated employees at the time of electing to make a Deferral.

Section 2.22.

Employee . “Employee” means a person who is employed in the capacity of an employee of the Company.

Section 2.23.

ERISA . “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

Section 2.24.

Hypothetical Investment Benchmark . “Hypothetical Investment Benchmark” means the phantom investment benchmarks determined by reference to one or more of the investment alternatives designated by a Participant in accordance with Article V of this Plan. The amount of interest credited on each Valuation Date (or deducted in the case of a loss by the designated investment alternatives) shall equal the interest, dividends, increase or decrease in market value and other earnings or losses that would have been credited to a Participant’s Deferral or Matching Contribution Account if the amounts in the Deferral or Matching Contribution Account had actually been invested in the designated investment alternative(s).

Section 2.25.

Identification Date . “Identification Date” means December 31st of each year.

Section 2.26.

Key Employee . “Key Employee” means an Employee who is a key employee as defined in Code Section 416(i) without regard to Code Section 416(i)(5) during the twelve-month period ending on the Identification Date.

Section 2.27.

Matching Contribution . “Matching Contribution” means the amount of matching contribution, if any, that the Company may make to a Participant’s Matching Contribution Account pursuant to Section 4.01 of the Plan, at the sole and absolute discretion of the Administrative Committee.

 

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Section 2.28.

Matching Contribution Account . “Matching Contribution Account” means the record of a Participant’s interest in this Plan represented by the Matching Contributions, with all earnings thereon credited to such Matching Contributions on behalf of the Participant under the provisions of this Plan, and all losses, expenses, withdrawals and distributions thereon debited from such Matching Contributions.

Section 2.29.

Participant . “Participant” means any Eligible Employee or Director who has elected to participate by properly submitting a completed Participation Agreement or Director’s Deferral Election Form as provided in Article IV of the Plan. An individual will remain a Participant until the distribution of the entire balance, if any, of such Participant’s Deferral and Matching Contribution Account(s), even if such Participant is no longer an Eligible Employee or Director and cannot make future Deferrals.

Section 2.30.

Participation Agreement . “Participation Agreement” means an Eligible Employee’s election, made in accordance with procedures established by the Administrative Committee, to effect a Deferral hereunder.

Section 2.31.

Plan Year . “Plan Year” means a twelve-month period beginning January 1 and ending the following December 31.

Section 2.32.

Retirement . In the case of an Eligible Employee, “Retirement” means the Termination of Employment of a Participant from the employ or service of the Company or any of its subsidiaries or affiliates in accordance with the terms of the applicable Company retirement plan, or if a Participant is not covered by such a plan, the Participant’s Termination of Employment on or after the earliest to occur of the following:

 

(a)

the attainment by the Participant of age 65, or

 

(b)

the attainment by the Participant of age 55 and ten years of service (in accordance with the method of determining years of service adopted by the Company).

In the case of a Director, “Retirement” means the termination of a Director’s service as a member of the Board or the CC Media Board, as applicable.

 

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Section 2.33.

Specific Year Deferral . “Specific Year Deferral” means a Deferral or Matching Contribution which has a Deferral Period of a specific number of full calendar years equal to or greater than three (3) as elected by a Participant in accordance with a Participation Agreement or a Director’s Deferral Election Form.

Section 2.34.

Specified Employee . “Specified Employee” means an Employee whose distribution payable as a result of a Termination of Employment or Retirement, may not be paid for a period of six (6) months following such Termination of Employment or Retirement (or, if earlier, the date of the Employee’s death) as required in accordance with Section 409A of the Code. An Employee will be a Specified Employee whose distribution is so restricted for the twelve (12) month period beginning on April 1 of any year and ending on March 31 of the following year if such Employee was a Key Employee on the Identification Date (December 31) preceding the beginning of each such twelve month period.

Section 2.35.

Termination of Employment . “Termination of Employment” means the cessation of a Participant’s services as an Employee of the Company, or any subsidiary or affiliate thereof, for any reason other than Retirement; provided, however, that transfer of employment from the Company, or from one affiliate or subsidiary of the Company, to another affiliate or subsidiary of the Company, or to the Company, will not constitute a Termination of Employment for purposes of this Plan. For purposes of this Plan, a Disabled Participant shall be deemed to have terminated employment.

Section 2.36.

Valuation Date . “Valuation Date” means each business day of the Plan Year.

 

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ARTICLE III

ELIGIBILITY AND PARTICIPATION

Section 3.01.

Initial Eligibility . Participation in the Plan shall be limited to executives who meet such eligibility criteria as the Administrative Committee shall establish from time to time, provided, however, that all Participants must be a member of a select group of management or highly compensated Employees or a Director. Such an Eligible Employee or Director shall be eligible to participate in the Plan as of his or her initial eligibility date as described below:

 

(a)

An Eligible Employee’s initial eligibility date shall be the first of the month coinciding with or next following three months of employment.

 

(b)

A Director’s initial eligibility date shall be the first of the month coinciding with or next following three months after election or appointment as a new Director.

Section 3.02.

Participation . Each Eligible Employee or Director may elect to participate in this Plan by completing and submitting a Participation Agreement or Director’s Deferral Election Form, as applicable, no later than the applicable Election Date. Separate elections are to be made with respect to each Plan Year.

An Employee who ceases to be an Eligible Employee or a Director who ceases to be a Director for a Plan Year and who again becomes an Eligible Employee or a Director shall recommence participation in the Plan in accordance with this Section 3.01(a) following submission of a new Participation Agreement or Director’s Deferral Election Form as applicable, in the case of an Employee or Director who has not been an active Participant in the Plan for at least 24 months, or the first day of the following Plan Year in all other cases.

 

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ARTICLE IV

MATCHING CONTRIBUTIONS AND PARTICIPANT DEFERRALS

Section 4.01.

Matching Contribution . Matching Contributions may be made at the sole discretion of the Administrative Committee. Any Matching Contribution approved by the Administrative Committee will be credited to the Participant’s Matching Contribution Account as soon as administratively feasible after the end of the Plan Year to which the Matching Contribution relates. The amount of any Matching Contribution shall be at the sole and absolute discretion of the Administrative Committee, and may be equal to the matching contribution the Company would have made to a qualified Company defined contribution plan based on the Participant’s eligible compensation (as defined by the qualified Company defined contribution plan, but for the full plan year and without reduction for the Participant’s Deferrals under this Plan), if the Participant made a contribution to such defined contribution plan in the amount of 5% of the Participant’s eligible compensation (as defined by the qualified Company defined contribution plan, but for the full plan year and without reduction for the Participant’s Deferrals under this Plan), less the amount equal to the Company’s actual matching contribution to the qualified Company defined contribution plan for such plan year. Matching Contributions will be made only to the extent that the Participant’s pre-tax contributions to a qualified Company defined contribution plan equal or exceed the maximum percentage permitted of eligible compensation (as defined by the qualified Company defined contribution plan).

Section 4.02.

Deferral Election .

 

(a)

An Eligible Employee or Director may make an irrevocable election to defer a portion of such person’s Eligible Compensation for a Plan Year for a Deferral Period elected by such Eligible Employee or Director. An Eligible Employee or Director who desires to make a Deferral will complete and submit a Participation Agreement or Director’s Deferral Election Form, as the case may be, by the Election Date pursuant to procedures specified by the Administrative Committee (1) specifying the applicable percentages of Eligible Compensation to be deferred, the date as of which the amounts to be deferred will become payable unless otherwise provided in the Plan, and the form in which the payments of the Deferrals are to be made, and (2) authorizing such Eligible Employee’s or Director’s Eligible Compensation payable for a Plan Year to be reduced and deferred hereunder.

 

(b)

A Participant may defer Eligible Compensation for any Plan Year under subsection (a) hereof, in an amount expressed as whole percentages of his or her Base Salary and Commission, Bonus and Director’s Compensation as follows:

 

(1)

Base Salary and Commission: not less than 1% nor more than 50%;

 

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(2)

Bonus: not less than 1% nor more than 80%; and

 

(3)

Director’s Compensation: up to 100% but not less than 1%;

provided, however, that the Administrative Committee may, without amending this Plan, determine that the maximum applicable percentages will be greater or lesser than the percentages set forth herein.

 

(c)

Time of Payment Election. The time of payment of a Participant’s Deferral and Matching Contributions shall be determined in accordance with the Participant’s election made pursuant to this Section 4.02(c), subject to Section 4.03(a)(2) and Article VI. A Participant may elect Deferral Periods for each Deferral and Matching Contribution, which shall be the earlier to occur of (1) a Specific Year Deferral, and (2) the period ending upon the Retirement or earlier Termination of Employment of the Participant. Each such Specific Year Deferral must be for a minimum of three (3) full calendar years from the end of the Plan Year in which such a Specific Year Deferral was made.

 

(d)

Form of Payment Election. The form of payment of a Participant’s Deferral and Matching Contributions shall be determined in accordance with the Participant’s election made pursuant to this Section 4.02(d), subject to Section 4.03(a)(3). A Participant may elect to have a Specific Year Deferral distributed in either a cash lump sum or in up to five (5) substantially equal annual cash installments regardless of the value of the Participant’s account balance as of the date of distribution. A Participant may elect to have a Deferral until Retirement distributed in either a cash lump sum or in up to fifteen (15) substantially equal annual cash installments; provided, however, a Participant must have an account balance equal to or greater than $25,000 at Termination of Employment. If said account balance is less than $25,000, the distribution will be paid in a single cash lump sum as soon as practicable following Termination of Employment subject to the requirements of Code Section 409A including any restrictions on distributions to Specified Employees.

Section 4.03.

Election Procedures . Eligible Employees or Directors who wish to make a Deferral must do so for each applicable Plan Year in accordance with this Section 4.03 and procedures established under the Plan.

 

(a)

With respect to Base Salary and Commissions, Bonuses or Director’s Compensation (as applicable), each Participant shall be required to complete an annual Deferral election by the Election Date for the

 

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following Plan Year. Such annual election shall specify the amount the Participant wishes to defer as well as the Participant’s election with respect to time and form of payment, as applicable. In the event that a Participant fails to complete all or part of such Deferral election with respect to a Plan Year, the following provisions shall apply:

 

(1)

In the event the Participant fails to elect to defer a percentage of his or her Base Salary and Commissions, Bonuses or Director’s Compensation (as applicable) in accordance with Section 4.02(b), such Participant shall be deemed to have elected to defer no portion of such amounts for the following Plan Year.

 

(2)

In the event the Participant fails to make an election as to the time of payment in accordance with Section 4.02(c), such Participant shall be deemed to have elected that such contributions shall be paid at Retirement or earlier Termination of Employment in a lump sum as described in Section 4.02(c).

 

(3)

In the event the Participant fails to make an election as to form of payment in accordance with Section 4.02(d), such Participant shall be deemed to have elected that such contributions shall be paid in the form of a lump sum.

 

(b)

If the Administrative Committee determines that a Participant is no longer eligible for participation in the Plan during a Plan Year:

 

(1)

Such Participant’s future Deferrals will continue for the remainder of that Plan Year but will cease thereafter until the Participant again becomes an eligible Participant; and

 

(2)

There will be no acceleration of the distribution of such a Participant’s vested account balance as a result of cessation of eligibility to participate.

 

(c)

For purposes of this Article IV, a Participant’s election to defer a portion of his or her Bonus shall apply to the Bonus earned in the following Plan Year and otherwise payable in the second Plan Year following the year in which the deferral election was made. Consistent with the above, the Administrative Committee may establish rules and procedures governing when a Deferral will be effective and what Compensation will be deferred by the Deferral, provided that such rules and procedures are not more permissive or inconsistent with the terms and provisions of the Plan and are consistent with the provisions of Code Section 409A and the regulations and guidance promulgated thereunder.

 

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Section 4.04.

Modification or Revocation of Election of Deferrals by