EX-10.24 32 y91125a5exv10w24.htm EX-10.24 exv10w24
Exhibit 10.24
PERFORMANCE AWARD AGREEMENT
[Full Name of Employee]
[Date]
Dear [First Name]:
     Pursuant to the 2011 Cash Incentive Plan (the “Plan”) of AMC Networks Inc. (the “Company”), you will receive a contingent cash award (the “Award”) in replacement of the contingent cash award granted to you by the Compensation Committee of the Board of Directors of Cablevision Systems Corporation (“Cablevision”) effective as of March 8, 2011 (the “Effective Date”), which contingent cash award has been canceled in all respects.
     Capitalized terms used, but not defined, in this agreement (this “Agreement”) have the meanings given to them in the Plan. The Award is subject to the terms and conditions set forth below:
1. Amount and Payment of Award. In accordance with the terms of this Performance Award Agreement, the target amount of your contingent Award is $__________________ (the “Target Award”), which may be increased or decreased to the extent the performance objectives set forth on Annex 1 hereto (the “Objectives”) have been attained in respect of the period from January 1, 2013 through December 31, 2013 (the “Performance Period”). The Award, calculated in accordance with Annex 1 attached hereto, will become payable to you upon the date on which the Committee (as defined in Section 10 below) determines the Company’s performance against the Objectives (the “Award Date”) provided, that you have remained in the continuous employ of the Company or one of its Affiliates from the Effective Date through the Award Date.
2. Termination of Employment. If, on the Award Date, you are no longer employed by the Company or one of its Affiliates for any reason, other than as a result of your death, then you will automatically forfeit all of your rights and interest in the Award regardless of whether the Objectives are attained.
3. Death. If, prior to the end of the Performance Period, your employment with the Company or any of its Affiliates is terminated as a result of your death then your estate will receive, promptly (and in any event within 30 days) following the date of such termination, payment of the Target Award prorated for the number of completed months of your employment during the Performance Period prior to such termination. If after the end of the Performance Period but prior to the Award Date, your employment with the Company or any of its Affiliates is terminated as a result of your death then your estate will receive, on the date payment is made to active eligible employees of the Company, the Award, if any, to which you would have been entitled on the Award Date had your employment not been so terminated.

 

 

4. Going Private Transaction or Change in Control.
     a. Going Private Transaction. Notwithstanding anything to the contrary contained in this Agreement, if at any time a Going Private Transaction (as defined below) occurs and immediately prior to such transaction you are employed by the Company or one of its Affiliates, the Target Award shall become payable to you whether or not the Objectives have been attained at the earlier of (i) January 1, 2014, provided, that you remain in the continuous employ of the Company or one of its Affiliates from the Effective Date through such date or (ii) the date subsequent to the Going Private Transaction on which your employment with the Company or the surviving entity is terminated (A) by the Company or the surviving entity other than for Cause (as defined below) or (B) by you for Good Reason (as defined below). Notwithstanding the foregoing, if you become entitled to payment of the Target Award by virtue of a termination in accordance with (ii)(A) or (ii)(B) of this Section 4(a) and are determined by the Company to be a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A of the IRC”), the Target Award shall be paid to you on the earlier of: (i) January 1, 2014, (ii) the date that is six months from your date of employment termination and (iii) any other date on which such payment or any portion thereof would be a permissible distribution under Section 409A of the IRC. In the event of such a determination, the Company shall promptly following the date of your employment termination set aside such amount for your benefit in a “rabbi trust” that satisfies the requirements of Revenue Procedure 92-64, and on a monthly basis shall deposit into such trust interest in arrears (compounded quarterly at the rate provided below) until such time as such amount, together with all accrued interest thereon, is paid to you in full pursuant to the previous sentence); provided, that no payment will be made to such rabbi trust if it would be contrary to law or cause you to incur additional tax under Section 409A of the IRC. The initial interest rate shall be the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of your employment termination.
     b. Change in Control. Notwithstanding anything to the contrary contained in this Agreement but subject to the subsections of this Section 4(b), if at any time a Change of Control (as defined below) of the Company occurs and immediately prior to such transaction you are employed by the Company or one of its Affiliates, you will be entitled to the payment of the Target Award whether or not the Objectives have been attained.
          i. If the actual Change of Control:
               (A) is a permissible distribution event under Section 409A of the IRC or payment of the Award promptly upon such event is otherwise permissible under Section 409A of the IRC (including, for the avoidance of doubt, by reason of the inapplicability of Section 409A of the IRC to the Award), then the Target Award shall be paid to you by the Company promptly following the Change of Control; or
               (B) is not a permissible distribution event under Section 409A of the IRC and payment of the Award promptly upon such event is not otherwise permissible under Section 409A of the IRC, then the Target Award shall be paid to you by the Company (together with interest thereon pursuant to Section 4(b)(ii) below) on the earliest to occur of:

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                    (1) any subsequent date on which you are no longer employed by the Company or any of its Affiliates for any reason other than termination of your employment by one of such entities for Cause (provided that if you are determined by the Company to be a “specified employee” within the meaning of Section 409A of the IRC, six months from such date);
                    (2) any other date on which such payment or any portion thereof would be a permissible distribution under Section 409A of the IRC; or
                    (3) January 1, 2014.
          ii. Upon any Change of Control, to the extent any amounts are due to be paid to you at a later date pursuant to Section 4(b)(i)(B) above, the Company shall promptly following the Change of Control set aside such amount for your benefit in a “rabbi trust” that satisfies the requirements of Revenue Procedure 92-64, and on a monthly basis shall deposit into such trust interest in arrears (compounded quarterly at the rate provided below) until such time as such amount, together with all accrued interest thereon, is paid to you in full pursuant to Section 4(b)(i)(B) above); provided, that no payment will be made to such rabbi trust if it would be contrary to law or cause you to incur additional tax under Section 409A of the IRC. The initial interest rate shall be the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of the Change of Control and shall adjust annually based on the average of such rate for the ten business days prior to each anniversary of the Change of Control.
     If and to the extent that any payment under this Section 4 is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A of the IRC and is payable to you by reason of your termination of employment, then such payment shall be made to you only upon a “separation from service” as defined for purposes of Section 409A of the IRC under applicable regulations.
     For purposes of this Agreement, “Cause” means, your (i) commission of an act of fraud, embezzlement, misappropriation, willful misconduct, gross negligence or breach of fiduciary duty against the Company or an Affiliate thereof, or (ii) commission of any act or omission that results in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any crime involving moral turpitude or any felony.
     For purposes of this Agreement, “Change of Control” means the acquisition, in a transaction or a series of related transactions, by any person or group, other than Charles F. Dolan or members of the immediate family of Charles F. Dolan or trusts for the benefit of Charles F. Dolan or his immediate family (or an entity or entities controlled by any of them) or any employee benefit plan sponsored or maintained by the Company, of the power to direct the management of the Company or substantially all its assets (as constituted immediately prior to such transaction or transactions).
     For purposes of this Agreement, “Going Private Transaction” means a transaction involving the purchase of Company securities described in Rule 13e-3 to the Securities and Exchange Act of 1934.

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     For purposes of this Agreement, “Good Reason” means: (a) without your express written consent any reduction in your base salary or bonus potential, or any material impairment or material adverse change in your working conditions (as the same may from time to time have been improved or, with your written consent, otherwise altered, in each case, after the Effective Date) at any time after or within ninety (90) days prior to the Going Private Transaction including, without limitation, any material reduction of your other compensation, executive perquisites or other employee benefits (measured, where applicable, by level or participation or percentage of award under any plans of the Company), or material impairment or material adverse change of your level of responsibility, authority, autonomy or title, or to your scope of duties; (b) any failure by the Company to comply with any of the provisions of this Agreement, other than an insubstantial or inadvertent failure remedied by the Company promptly after receipt of notice thereof given by you; (c) the Company’s requiring you to be based at any office or location more than thirty-five (35) miles from your location immediately prior to the Going Private Transaction except for travel reasonably required in the performance of your responsibilities; or (d) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor.
5. Termination. Except for a right which has accrued to receive a payment on account of the Award, this Agreement shall automatically terminate and be of no further force and effect on the Award Date.
6. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the Award other than to the extent provided in the Plan.
7. Unfunded Obligation. The Plan will at all times be unfunded and, except as set forth in Section 4(b) of this Agreement, no provision will at any time be made with respect to segregating any assets of the Company or any of its Affiliates for payment of any benefits under the Plan, including, without limitation, those covered by this Agreement. Your right or that of your estate to receive payments under this Agreement shall be an unsecured claim against the general assets of the Company, including any rabbi trust established pursuant to Section 4(b). Neither you nor your estate shall have any rights in or against any specific assets of the Company other than the assets held by the rabbi trust established pursuant to Section 4(b).
8. Tax Representations and Tax Withholding. You hereby acknowledge that you have reviewed with your own tax advisors the federal, state and local tax consequences of receiving the Award. You hereby represent to the Company that you are relying solely on such advisors and not on any statements or representations of the Company, its Affiliates or any of their respective agents. If, in connection with the Award, the Company is required to withhold any amounts by reason of any federal, state or local tax, such withholding shall be effected in accordance with Section 8 of the Plan.
9. Right of Offset. You hereby agree that if the Company shall owe you any amount that does not constitute “non-qualified deferred compensation” pursuant to Section 409A of the IRC (the “Company-Owed Amount”) under this Agreement, then the Company shall have the right to offset against the Company-Owed Amount, to the maximum extent permitted by law, any amounts that you may owe to the Company or its Affiliates of whatever nature.

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10. The Committee. For purposes of this Agreement, the term “Committee” means the Compensation Committee of the Board of Directors of the Company or any replacement committee established under, and as more fully defined in, the Plan.
11. Committee Discretion. The Committee has full discretion with respect to any actions to be taken or determinations to be made in connection with this Agreement, and its determinations shall be final, binding and conclusive.
12. Amendment. The Committee reserves the right at any time and from time to time to amend or revise the terms and conditions set forth in this Agreement, except that the Committee may not make any such amendment or revision in a manner unfavorable to you (other than if immaterial) without your consent. Any amendment of this Agreement shall be in writing and signed by an authorized member of the Committee or a person or persons designated by the Committee.
13. Award Subject to the Plan. The Award and all other amounts payable hereunder are subject to the Plan.
14. Entire Agreement. Except for any employment agreement between you and the Company or any of its Affiliates in effect as of the date of the grant hereof (as such employment agreement may be modified, renewed or replaced), this Agreement and the Plan constitute the entire understanding and agreement of you and the Company with respect to the Award covered hereby and supersede all prior understandings and agreements. In the event of a conflict among the documents with respect to the terms and conditions of the Award covered hereby, the documents will be accorded the following order of authority: the terms and conditions of the Plan will have highest authority followed by the terms and conditions of your employment agreement, if any, followed by the terms and conditions of this Agreement.
15. Successors and Assigns. The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Company and its successors and assigns.
16. Governing Law. This Agreement shall be deemed to be made under, and in all respects be interpreted, construed and governed by and in accordance with, the laws of the State of New York.
17. Jurisdiction and Venue. You irrevocably submit to the jurisdiction of the courts of the State of New York and the Federal courts of the United States located in the Southern District and Eastern District of the State of New York in respect of the interpretation and enforcement of the provisions of this Agreement and the Plan, and hereby waive, and agree not to assert, as a defense that you are not subject thereto or that the venue thereof may not be appropriate. You agree that the mailing of process or other papers in connection with any action or proceeding in any manner permitted by law shall be valid and sufficient service.
18. Waiver. No waiver by the Company at any time of any breach by you of, or compliance with, any term or condition of this Agreement or the Plan to be performed by you shall be deemed a waiver of the same, any similar or any dissimilar term or condition at the same or at any prior or subsequent time.

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19. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any term or condition hereof shall not affect the validity or enforceability of the other terms and conditions set forth herein.
20. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be considered in agreement that the Award shall be considered special incentive compensation and will be exempt from inclusion as “wages” or “salary” in pension, retirement, life insurance and other employee benefits arrangements of the Company and its Affiliates, except as determined otherwise by the Company. In addition, each of your beneficiaries shall be deemed to be in agreement that the Award shall be exempt from inclusion in “wages” or “salary” for purposes of calculating benefits of any life insurance coverage sponsored by the Company or any of its Affiliates.
21. No Right to Continued Employment. Nothing contained in this Agreement or the Plan shall be construed to confer on you any right to continue in the employ of the Company or any Affiliate, or derogate from the right of the Company or any Affiliate, as applicable, to retire, request the resignation of, or discharge you, at any time, with or without cause.
22. Affiliates of the Company. Notwithstanding Section 2(a) of the Plan, for purposes of Sections 2, 3, 4 (other than the definition of “Cause” set forth in such Section), 5, 9 and 14 of this Agreement, “Affiliate” of the Company shall mean the direct and indirect subsidiaries of the Company.
23. Section 409A. It is the Company’s intent that payments under this Agreement be exempt from, or comply with, the requirements of Section 409A of the IRC, and that this Agreement be administered and interpreted accordingly. If and to the extent that any payment or benefit under this Agreement, or any plan or arrangement of the Company or its affiliates, is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A of the IRC and is payable to you by reason of your termination of employment, then (a) such payment or benefit shall be made or provided to you only upon a “separation from service” as defined for purposes of Section 409A of the IRC under applicable regulations and (b) if you are a “specified employee” (within the meaning of Section 409A of the IRC and as determined by the Company), such payment or benefit shall not be made or provided before the date that is six months after the date of your separation from service (or your earlier death). Any amount not paid in respect of the six month period specified in the preceding sentence will be paid to you, together with interest on such delayed amount at the rate equal to the average of the one-year LIBOR fixed rate equivalent for the ten business days prior to the date of your separation from service (or your earlier death), in a lump sum after the expiration of such six month period. The Committee will determine the Company’s performance against the Objectives under Section 1 hereof during the calendar year immediately following the Performance Period. This Section 23 will also apply to all previous awards granted to you pursuant to the Plan.
24. Headings. The headings in this Agreement are for purposes of convenience only and are not intended to define or limit the construction of the terms and conditions of this Agreement.
25. Effective Date. Upon execution by you, this Agreement shall be effective from and as of the Effective Date.

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26. Signatures. Execution of this Agreement by the Company may be in the form of an electronic or similar signature, and such signature shall be treated as an original signature for all purposes.
         
  AMC NETWORKS INC.
 		  
  By:      
    Joshua Sapan
President and CEO 		  
     By your signature, you (i) acknowledge that a complete copy of the Plan and an executed original of this Agreement have been made available to you and (ii) agree to all of the terms and conditions set forth in the Plan and this Agreement.
         
          
      Name:  

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Annex 1
AMC Networks Performance Objectives
($ in thousands)
                 
    2013 Net Revenue Goal        
2010 Net Revenue   Target     Incremental Net Revenue  
$1,107,325
   $ 1,473,675     $ 366,350  
 
2010 Business Unit   2013 Business Unit     Incremental Business  
AOCF   AOCF Goal     Unit AOCF Target  
$408,937
   $ 531,116     $ 122,176  
   
Cumulative Business Unit Free Cash Flow Target  
$1,199,916
  
Definitions. For purposes of this Annex 1 (as partially reflected in the chart above):
     “2010 Net Revenue” is $1,107,325.
     “2010 Business Unit AOCF” is $408,937.
“Net Revenue” means the Company’s consolidated net revenue, excluding inter-company eliminations.
“AOCF” means adjusted operating cash flow, as defined in the earnings release of Cablevision, dated February 16, 2011, but excluding the impact of this Award and all other performance-based long-term incentive awards.
     “Incremental Net Revenue Target” is $366,350.
     “Incremental Business Unit AOCF Target” is $122,176.
     “Cumulative Business Unit Free Cash Flow Target” is $1,199,916.

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“Financial Target” means the Incremental Net Revenue Target, Incremental Business Unit AOCF Target or Cumulative Business Unit Free Cash Flow Target, as applicable.
“Business Unit AOCF” means the combined AOCF of the Company’s operating businesses.
“Business Unit Free Cash Flow” means the combined AOCF of the Company’s operating businesses, less the difference between cash payments for contractual rights and the amortization of such rights accounted for in AOCF.
“Incremental Net Revenue” shall equal the Company’s 2013 Net Revenue minus 2010 Net Revenue.
“Incremental Business Unit AOCF” shall equal the Company’s 2013 Business Unit AOCF minus 2010 Business Unit AOCF.
“Cumulative Business Unit Free Cash Flow” shall equal the sum of the Company’s Business Unit Free Cash Flow for fiscal years 2011, 2012 and 2013.
“Financial Performance” means Incremental Net Revenue, Incremental Business Unit AOCF or Cumulative Business Unit Free Cash Flow, as applicable.
     Award Calculation. The amount of your Award, if any, that shall vest on the Award Date shall be determined by multiplying (a) the weighted average of: (i) a percentage resulting from the ratio of the Incremental Net Revenue to the Incremental Net Revenue Target, which shall account for 30% of your Award (the “Revenue Award”); (ii) a percentage resulting from the ratio of Incremental Business Unit AOCF to the Incremental Business Unit AOCF Target, which shall account for 50% of your Award; and (iii) a percentage resulting from the ratio of Cumulative Business Unit Free Cash Flow to the Cumulative Business Unit Free Cash Flow Target, which shall account for 20% of your Award; times (b) your Target Award. Achievement of Financial Performance in each award category higher or lower than the applicable Financial Target will result in a percentage increase or decrease in your award for such award category, based on a performance scale which has been approved by the Committee, up to a maximum of 200% in each category. Pursuant to such performance scale, no award will be payable (a) in the case of Net Revenue or Business Unit AOCF if Financial Performance is not equal to at least 60% of the applicable Financial Target, and (b) in the case of Business Unit Free Cash Flow, if Cumulative Business Unit Free Cash Flow is not equal to at least 87% of the Cumulative Business Unit Free Cash Flow Target. In calculating the percentages by which Financial Performance exceeded or fell below the Financial Targets (and the percentages for each award category to be added to or subtracted from the award for such category in determining the award to be earned) the Committee will round such percentages to the nearest tenth of a percent.
     All amounts that do not so vest shall terminate automatically and without further notice upon the Payment Date. All dollar amounts set forth herein are expressed in thousands and all calculations of Awards payable hereunder will be based on rounding to the nearest thousand.
     Adjustments/Determination. 2010 Net Revenue and 2010 Business Unit AOCF have been calculated as if the Company owned in 2010 the operating businesses directly or indirectly

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owned by Rainbow Media Holdings LLC on the Effective Date. Cumulative Business Unit Free Cash Flow is based on the actual cumulative financial performance of the Company for the period from January 1, 2011 through December 31, 2013, calculated as if the Company owned the operating businesses which are included in the “Rainbow Media” section of the five-year plan referenced below for all of fiscal 2011. The Incremental Net Revenue Target, Incremental Business Unit AOCF Target and the Cumulative Business Unit Free Cash Flow Target are based on the Cablevision’s forecasts of Rainbow Media’s performance included in Cablevison’s consolidated five-year plan presented to Cablevison’s Board of Directors on December 16, 2010, as risk adjusted and presented to the Compensation Committee of the Board of Directors of Cablevision on March 22, 2011. The definitions, numbers and calculations described in this Annex 1 shall be modified by the Committee to neutralize the impact upon the Objectives of the following items, in each case to the extent not already contemplated by the five-year plan:
     acquisitions of businesses or planned acquisitions that are not completed (including costs for acquisitions that are not completed);
     dispositions of businesses or discontinued businesses, in each case in a manner that neutralizes the impact of the associated effects on corporate or other expenses that otherwise would have been allocated to such businesses;
     investments in new business ventures or initiatives not budgeted or forecasted (as opposed to over budget or forecast) in order to achieve new revenue opportunities or significantly improve existing revenue opportunities;
     accelerated investment in costs associated with the renewals of Mad Men;
     position eliminations or reductions-in-force occurring in 2013, which accelerate expense and, therefore, benefit future periods;
     disputes under or a termination of any affiliate agreement by distributors in connection with significant litigation (including any litigation settlements);
     the imposition of any new tax, fee or surcharge by any governmental or regulatory entity (other than those that would be billed or passed through to customers);
     changes in generally accepted accounting principles (GAAP) or in the application of GAAP different from what was assumed in the five-year plan, provided that adjustments will be made only to the extent the net cumulative impact of such changes results in a positive or negative variance of greater than $2 million;
     impacts of spinoff from Cablevision, including but not limited to overhead costs, management fees, and public company expenses; and
     acts of God, terrorism or vandalism.
The Committee may also otherwise modify the Objectives in its discretion (but, with respect to “covered employees” subject to Section 162(m) of the Internal Revenue Code, such discretion will be limited to decreasing the amount of an Award otherwise payable to such employee).

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No Awards shall be paid pursuant to the calculations described in this Annex 1 until the Committee makes a final determination of the amount of the Award in accordance with this Annex 1.

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