CLEAR CHANNEL EMPLOYEE EQUITY INVESTMENT PROGRAM

Exhibit 10.24

This document constitutes

part of a prospectus covering

securities that have been registered

under the Securities Act of 1933

 

PROSPECTUS

 

Description of

CLEAR CHANNEL

EMPLOYEE EQUITY INVESTMENT PROGRAM

Dated July 30, 2008

This memorandum summarizes the Clear Channel Employee Equity Investment Program and has been prepared to describe the risks of holding the securities described herein but does not purport to be a complete description and is qualified in its entirety by the full text of the Investor Agreement. In choosing to subscribe for the securities of CC Media Holdings, Inc., the parent of Clear Channel Communications, Inc. (“Parent”), you must rely on your own examination of Parent, Clear Channel Communications, Inc., and its subsidiaries, the transactions (as described herein), and the terms of participation, including the merits and risks involved. Persons participating in the Program should not construe the contents of this memorandum or any prior or subsequent communications, whether written or oral, as investment, tax or legal advice. You should consult your own attorney, investment, tax or other advisor as to legal, investment, business, tax or other advice.

This information is being provided confidentially to you so that you may consider equity participation in Parent by acquiring the securities described herein. Neither Parent nor Clear Channel Communications, Inc., has authorized its use for any other purpose. This memorandum may not be copied or reproduced in whole or in part. You may not distribute this memorandum or disclose its contents except as necessary to discuss your participation with your legal, investment, business or tax advisors. By accepting delivery of this memorandum, you agree to these restrictions.

 

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TABLE OF CONTENTS

 

 

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CLEAR CHANNEL

EMPLOYEE EQUITY INVESTMENT PROGRAM

 

A. INTRODUCTION

 

This confidential memorandum (the “ Memorandum ”) has been prepared on a confidential basis solely for use by certain employees of Clear Channel Communications, Inc. (“ Clear Channel ” or the “ Company ”) and its subsidiaries who have been given the opportunity to, and may choose to, subscribe for Class A common shares of CC Media Holdings, Inc. (“ Parent ”), the parent corporation of the entity that merged with and into Clear Channel in the transaction described below. Following the merger, Clear Channel will continue its corporate existence as a subsidiary of Parent, with the same name: Clear Channel Communications, Inc. To avoid confusion and to differentiate between Clear Channel pre-merger and Clear Channel post-merger, the entity that will merge with and into Clear Channel in the merger, and Clear Channel following the merger, are referred to in this Memorandum as “ CCU .”

The Program

Parent established the Employee Equity Investment Program (referred to herein as the “ Program ”) to promote the growth and success of CCU and its subsidiaries by offering certain employees a one-time opportunity to acquire shares of stock in Parent.

This Memorandum summarizes the Program but does not purport to be a complete description and is qualified in its entirety by the full text of the investor agreement (the “ Investor Agreement ”). All persons who decide to participate must sign and return to Parent the Investor Agreement as described below. Persons participating in the Program should not construe the contents of this Memorandum or any prior or subsequent communications, whether written or oral, as investment, tax or legal advice. You should consult your own attorney, investment, tax or other advisor as to legal, investment, business, tax or other advice.

The Program is not subject to any provision of the Employee Retirement Income Security Act of 1974, as amended.

 

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The Transaction

On November 16, 2006, Clear Channel entered into an Agreement and Plan of Merger with BT Triple Crown Merger Co., Inc., or “ CCU ,” a wholly-owned subsidiary of Parent, and others pursuant to which CCU merged with and into Clear Channel, with Clear Channel continuing as the surviving corporation and becoming a wholly-owned subsidiary of Parent (the “ Merger ”). (The Agreement and Plan of Merger, as amended on April 18, 2007, May 17, 2007 and May 13, 2008 is referred to herein as the “ Merger Agreement ”.) Throughout this Memorandum, the entity, Clear Channel, is referred to as “CCU” for all periods following the closing of the Merger. Upon the closing of the Merger, Thomas H. Lee Equity Fund VI, L.P., and certain affiliated funds, together with Bain Capital (CC) IX, L.P., and certain affiliated funds (collectively, the “ Majority Stockholders ”) and other investors became equity investors in Parent. CCU merged with and into Clear Channel in the Merger. The Majority Stockholders have acquired an indirect controlling interest in Clear Channel through their investment in Parent.

This Memorandum does not constitute an offer to sell, or the solicitation of an offer to buy, the securities to which this Memorandum relates in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction.

Neither the Securities and Exchange Commission (the “ SEC ”) nor any state securities commission has approved or disapproved of these securities or determined if this Memorandum is truthful or complete. Any representation to the contrary is a criminal offense. All descriptions of agreements herein or attached as exhibits hereto are summaries only, and you are encouraged to read each of such agreements and documents for a full understanding of their terms.

The information in this Memorandum is current only as of the date on the cover, and the business or financial condition and other information in this Memorandum may change after that date. All references to time herein refer to eastern standard time (“ EST ”).

Basic Questions and Answers about the Program

 

Q:	What is the purpose of the Program?

 

A:	The Program is intended to incentivize certain employees of CCU, Clear Channel Outdoor Holdings, Inc. (“CCO”) and their subsidiaries, to promote the growth and

 

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success of CCU, CCO, and their subsidiaries by offering a one-time opportunity to acquire Class A common shares in Parent by investing cash. This investment opportunity is more fully described in the Investor Agreement, which is enclosed. You should carefully review that document, along with this Memorandum and all other documents given to you in connection with the Program prior to making your investment decision.

 

Q:	Who is selling the shares of Parent stock under the Program?

 

A:	Parent is selling the shares.

 

Q:	What shares are being offered?

 

A:	Parent is offering you the one-time opportunity to purchase Class A common shares.

 

Q:	How much will I have to pay for the shares?

 

A:

The price per share will be equal to the fair market value of the shares as of the closing of the Merger. The Parent shares are being offered under the Program through the Investor Agreement, which is enclosed. The Parent Board of Directors has made a good faith determination that the price per share paid by the Majority Stockholders, or $36.00, is the fair market value of the shares as of the closing of the Merger.

 

Q:	How much must I invest to participate in the Program?

 

A:

You may purchase Parent shares under this one-time offer to acquire shares by subscribing for a minimum of 100 shares, which is equal to a minimum commitment of $3,600. Because only 416,667 shares are available for purchase under the Program, if total number of shares subscribed for under the Program is greater than 416,667, each participant will receive a pro rated number of the shares for which he or she subscribed. This means that you may receive fewer shares than the number for which you subscribe on the enclosed Investor Agreement. If you receive only a pro rated portion of your subscription amount, you will receive a refund equal to the price per share times the number of shares by which your subscription amount was reduced.

 

Q:	How long do I have to make my decision?

 

A:	As more fully described in the Investor Agreement, your Investor Agreement, including the attached acceptance form (the “ Acceptance Form ”) must be received

 

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by Parent no later than 5:00 p.m. EST on August 27, 2008 . You may submit these documents via email or fax; however, the original versions of any documents faxed or emailed must be received by Parent no later than 5:00 p.m. EST on Wednesday, September 3, 2008.

 

Q:	How can I pay for my shares?

 

A:	You can pay for your shares in cash (by wire transfer or personal check).

 

Q:	How and when do I deliver payment?

 

A:

Any cash payment for the shares you wish to purchase should be wired to Parent’s account by 5:00 p.m. EST on August 27, 2008 to the account at Bank of America that has been set up to facilitate the purchase of shares under the Program. The information that you will need to wire payment to this account is set forth below:

 

Please make sure that your name is clearly referenced in the wire instructions in order to make sure your cash payment is properly matched to your requested investment.

Please refer any questions and/or comments regarding wire payments to Cathy Johnson (210) 832-3312 or Cindy Stoltz (210) 832-3540.

If you are paying by check, you should attach your check to your Investor Agreement, which must be delivered by 5:00 p.m. EST on August 27, 2008 . You may also send a check after you submit you Investor Agreement, payable to CC Media Holdings, Inc.; however, your check must be received at the following address no later than 5:00 p.m. EST on August 27, 2008 .

CC Media Holdings, Inc.

c/o Clear Channel Communications, Inc.

200 East Basse Road

San Antonio, TX 78209

Attention: Retirement Benefits Department

 

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Q:	What documents will I need to sign and return by 5:00 p.m. EST on August 27, 2008 to purchase shares?

 

A:

If you have decided to subscribe, you should complete and return the Investor Agreement, Acceptance Form and Form W-9 (or, if you are not a United States citizen and are otherwise ineligible to use Form W-9, Form W-8BEN). Please review the Investor Agreement for information regarding the subscription process, including important information regarding the deadline for subscription. The Investor Agreement contains certain representations, warranties and acknowledgements, including an acknowledgment that there will be restrictions on your ability to transfer the Parent shares you are acquiring and certain other significant restrictions on your shares. The terms of these documents are more fully described below.

You may submit these documents via email or fax; however, the original versions of any documents faxed or emailed must be received by the Parent at the address below no later than 5:00 p.m. EST on Wednesday, September 3, 2008 .

CC Media Holdings, Inc.

c/o Clear Channel Communications, Inc.

200 East Basse Road

San Antonio, TX 78209

Attention: Retirement Benefits Department

 

Q:	Where can I find more information about Parent and the Program?

 

A:

Information can be found in the filings to the Securities Exchange Commission, including the Form S-4 filed by Parent on June 2, 2008 (referred to herein as the “S-4”). Additional information about the Program can be found in the enclosed Investor Agreement. If you would like further information about Parent, CCU and/or the Program, you may contact the Retirement Benefits Department by telephone at 210-832-3800 or email at espp@clearchannel.com.

 

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B. INVESTMENT RISKS

 

The following is a description of certain of the risks associated with an acquisition of shares of Parent Class A common stock. You should be aware that participation in the Program involves substantial associated risks, including, among others, those set forth below. The following risks and uncertainties could materially adversely affect Parent, an investment in Parent’s Class A common stock and/or Parent’s business, Parent’s financial condition or operating results (as well as all forecasts, projections and illustrative returns) and the value of Parent’s Class A common stock. For a description of additional factors that may adversely affect Parent’s business, you should refer to the “Risk Factors” section of the S-4. You are urged to review the risk factors set forth in the S-4.

You must make your own investment decision.

By executing the Investor Agreement, you acknowledge and agree, among other things, that (i) you have been provided with such information as you deem necessary to evaluate the merits and risks of investing in the Program (including, without limitation, such financial and other information regarding Parent, CCU, and their subsidiaries) and have been afforded the opportunity to ask such questions as you deem necessary of, and to receive answers from, representatives of Parent and CCU concerning the merits and risks of investing in the Program and (ii) in making the decision to invest in Parent, you have relied solely upon independent investigations made by you.

Because there has not been any public market for Parent Class A common stock, the market price and trading volume of Parent Class A stock may be volatile, and holders of Parent may not be able to sell shares of Parent at or above $36.00 following the Merger.

As Parent is a newly formed corporation, neither Clear Channel nor Parent can predict the extent to which investor interest will lead to a liquid trading market in Parent Class A common stock or whether the market price of Parent Class A common stock will be volatile following the Merger. The market price of Parent Class A common stock could fluctuate significantly for many reasons. Following consummation of the Merger, it is anticipated that the shares of Parent Class A common stock will be quoted on the Over-the-Counter Bulletin Board; however, shares of Parent will not be listed on a national securities exchange. The lack of an active market may impair the ability of investors in Parent to sell their shares of Class A common stock at the time they wish to sell them or at a price that they consider reasonable. The lack of an active market may also reduce the fair market value of the shares of Parent Class A common stock.

 

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The price of the Class A common stock traded in the public market on the date of purchase may be less than $36.00.

Depending on the date of your subscription, there may be a period of time between your irrevocable subscription and August 27, 2008, the date you become a holder of record of the Class A common shares. During this period, the price in the public market may decline, but the price of your shares will remain at $36.00.

Parent has the ability to terminate its Exchange Act reporting, if permitted by applicable law, two years after the completion of the merger.

Parent is obligated by the Merger Agreement to use its reasonable efforts to continue to be a reporting company under the Exchange Act, and to continue to file periodic reports (including annual and quarterly reports) for at least two years after the completion of the Merger. After such time, if Parent were to cease to be a reporting company under the Exchange Act, and to the extent not required in connection with any other debt or equity securities of Parent registered or required to be registered under the Exchange Act, the information now available to Parent shareholders in the annual, quarterly and other reports required to be filed by Parent with the SEC would not be available to them as a matter of right.

There is no assurance that you will ever receive cash dividends on Parent Class A common stock.

There is no guarantee that Parent will ever pay cash dividends on Parent Class A common stock. The terms of Parent's new debt arrangements are expected to restrict Parent’s ability to pay cash dividends on Parent Class A common stock. In addition to those restrictions, under Delaware law, Parent is permitted to pay cash dividends on its capital stock only out of its surplus, which in general terms means the excess of its net assets over the original aggregate par value of its stock. In the event Parent has no surplus, it is permitted to pay these cash dividends out of its net profits for the year in which the dividend is declared or in the immediately preceding year. Accordingly, there is no guarantee that, if Parent decides to pay cash dividends, Parent will be able to pay you cash dividends on the Class A common stock. Also, even Parent is not prohibited from paying cash dividends by the terms of its debt or by law, other factors such as the need to reinvest cash back into Parent’s operations may prompt Parent board of directors to elect not to pay cash dividends.

 

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It is expected that CCU will be substantially leveraged .

In connection with the transactions contemplated by the Merger Agreement, CCU will incur significant indebtedness and will be highly leveraged, which will significantly affect its financial condition going forward. Such leverage may subject CCU and its subsidiaries to restrictive financial and operating covenants, which may impair the ability of CCU and its subsidiaries to finance their future operations and capital needs. As a result, CCU and its subsidiaries may have limited flexibility to respond to changing business and economic conditions and to business opportunities. A leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used. In addition, a leveraged capital structure will subject CCU to increased exposure to adverse economic factors such as a significant rise in interest rates, a severe downturn in the economy or deterioration in the condition of CCU or its industry. CCU’s debt service requirements may make it more difficult for it and its subsidiaries to satisfy their financial obligations. In the event that CCU is unable to generate sufficient cash flow to meet principal and interest payments on its indebtedness, the value of your investment in Parent could be significantly reduced or even eliminated.

Parent may issue additional shares of stock in the future, which would dilute your equity interest .

Parent reserves the right to issue additional shares of common or preferred stock, voting or non-voting, at any time in the future and for any price, whether as part of additional employee benefit programs, to third party investors or otherwise. Any issuance of additional stock would dilute the value of the shares of stock that you hold.

The Company is controlled by affiliates of the Majority Stockholders.

The Majority Stockholders hold or have the ability to control Parent’s outstanding voting stock. The Majority Stockholders generally have the ability to control the policies and operations of Parent and its subsidiaries. You should be aware that the interests of the Majority Stockholders may not in all cases be aligned with the interests of you and the other stockholders of Parent.

There are potential conflicts of interest involving the Majority Stockholders.

The Majority Stockholders are leaders in private equity, debt and capital markets investing. As a result, the Majority Stockholders are engaged in other businesses and have other interests. Accordingly, there are numerous perceived and actual conflicts of interest between the Majority Stockholders, on the one hand, and Parent, on the other. These are considerations of which potential you should be aware,

 

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as such conflicts could disadvantage Parent. Present and future activities of the Majority Stockholders in addition to those described in this risk factor may give rise to additional conflicts of interest.

The following discussion enumerates certain potential conflicts of interest that exist between the Majority Stockholders and Parent. Other actual or potential conflicts of interests may exist as of the date of this Memorandum or in the future. Dealing with conflicts of interest is inherently complex and difficult and new and different types of conflicts may subsequently arise. There can be no assurance that the Majority Stockholders will be able to resolve all conflicts in a manner that is favorable or neutral to Parent. By acquiring Class A common stock under the Program, you acknowledge and represent that you have carefully reviewed the language in this Memorandum related to conflicts of interest and understand and consent to the existence of actual or potential conflicts of interest relating to the Majority Stockholders including, without limitation, those described in this section, and to the operation of Parent subject to these conflicts. You should consider the potential divergences of interest discussed below.

Other Activities . Conflicts of interest may arise in allocating management time, services or functions among the Majority Stockholders, Parent and other entities for which employees of the Majority Stockholders provide services.

Management Fees . The Majority Stockholders may receive ongoing annual management fees from Parent in respect of the services they provide to Parent pursuant to a management services agreement. If they are paid, no such fees will be shared with Parent, CCU, or you. In addition, officers or employees of the Majority Stockholders may receive fees paid and granted for service on the boards of directors of Parent. None of these fees will be shared with you.

Investments in Competitors . The Majority Stockholders may invest in other businesses that compete with the Parent and its subsidiaries and affiliates.

Certain Service Providers and Expenses . Parent will bear out-of-pocket expenses incurred by it or on its behalf, including, but not limited to, all legal (including with respect to litigation, if any), accounting, tax, auditing, administrative, information technology and other systems, reporting and tax preparation fees and expenses, all custodian fees, travel expenses, taxes, printing expenses, interest on borrowed monies, brokers’ fees and commissions, costs and expenses relating to the transfer of Class A common stock (to the extent not paid by the transferor), and certain other expenses, in each case whether the services are performed by internal staff of the Majority Stockholders or by third parties. The Majority Stockholders may provide (or

 

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may establish an entity to provide) services to Parent. These services may include, among other items, fund accounting, legal, finance, portfolio management, asset and risk management, administration, due diligence, loan servicing, tax coordination, information technology, cash management and other services. Parent will be responsible for the fees and expenses associated with all of these services. Amounts paid to the Majority Stockholders by Parent with respect to all of these services are in addition to the annual management fees of the Majority Stockholders noted above.

There may be other material risks related to a direct investment in Parent.

This document does not contain all material information regarding Parent or all material risks related to a direct investment in Parent. There may be additional information available or previously provided to the Majority Stockholders or Parent or any of their respective affiliates that they have not reviewed or undertaken to review that is material or may in the future become material or that may make information otherwise contained in this document or any supplement hereto inaccurate or incomplete. It is possible that the Majority Stockholders and Parent or any of their respective affiliates is in possession of additional information not included in this document that may be deemed material by investors or may, after the date of this document, become material or be deemed material by investors. None of the Majority Stockholders or Parent has made, or expects to make, any of the foregoing information available to prospective investors in Parent. Moreover, each of them may be contractually prohibited from providing such information to prospective investors in Parent. Moreover, to the extent the Majority Stockholders or Parent or any of their respective advisors receive any such materials or findings, they disclaim any responsibility to review such materials or findings and they will not forward such materials or findings to prospective investors in Parent. Accordingly, prospective investors should conduct their own due diligence of Parent and are responsible for making their own assessment of the merits and risks of investing in Parent, including by performing their own legal, accounting and tax analysis of this offering.

Delivery of supplemental information may be incomplete.

Although additional information about Parent and the Investor Agreement may be provided to prospective investors in one or more supplements to this document, neither the Majority Stockholders nor Parent undertakes to update or revise the information contained herein, whether as a result of new information, future events or otherwise. Should any supplement to this document or any other additional information or documents be provided to prospective investors, such information may be provided shortly ( e.g. , in some cases, no more than 24 hours) before prospective

 

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investors are required to deliver their investment agreements. Such information or documents may be provided to prospective investors verbally or in writing, and may be transmitted via telephone, voicemail, email, facsimile, courier, mail or alternative method, in each case in the sole discretion of the Majority Stockholders or Parent. Prospective investors are on notice that such information or documents may be delivered to them at any time, and they will be responsible for promptly reviewing any such items.

 

C. CERTAIN INFORMATION CONCERNING THE COMPANY

 

The Company

For a general description of Parent and CCU, you should refer to the S-4 filed by Parent with the SEC, along with all other public filings.

Financial Statements

Please see the section “Where You Can Find More Information” below. The public filings of Parent and CCU include detailed financial statements and information, including their audited financial statements. The public filings of Parent and CCU also describe other risks related to holding securities of Parent, which are relevant to your decision as to whether to subscribe for Class A common stock of Parent.

 

D. DESCRIPTION OF THE PROGRAM

 

The following is a summary description of the Program. This summary is qualified in its entirety by the full text of the enclosed Investor Agreement.

Nature and Purpose

The purpose of the Program is to incentivize certain key employees of CCU or its subsidiaries and promote the growth and success of Parent, CCU and their

 

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