-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EjGJshEtvgDxNe6JzZQddyKfovoPTImi/8I4oPrp+EcswO4dK49YF+yjn4llvUcI 5DCak1lWiK8VN//DXrjGKQ== 0000891836-05-000431.txt : 20051107 0000891836-05-000431.hdr.sgml : 20051107 20051107170803 ACCESSION NUMBER: 0000891836-05-000431 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20051107 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051107 DATE AS OF CHANGE: 20051107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CABLEVISION SYSTEMS CORP /NY CENTRAL INDEX KEY: 0001053112 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 112776686 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14764 FILM NUMBER: 051184053 BUSINESS ADDRESS: STREET 1: 1111 STEWART AVENUE CITY: BETHPAGE STATE: NY ZIP: 11714 BUSINESS PHONE: 5163806230 MAIL ADDRESS: STREET 1: 1111 STEWART AVENUE CITY: BETHPAGE STATE: NY ZIP: 11714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSC HOLDINGS INC CENTRAL INDEX KEY: 0000784681 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 112776686 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09046 FILM NUMBER: 051184054 BUSINESS ADDRESS: STREET 1: 1111 STEWART AVENUE CITY: BETHPAGE STATE: NY ZIP: 11714 BUSINESS PHONE: 516 803-2300 MAIL ADDRESS: STREET 1: 1111 STEWART AVENUE CITY: BETHPAGE STATE: NY ZIP: 11714 8-K 1 sc0223.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM 8-K --------------------------- CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 7, 2005 CABLEVISION SYSTEMS CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware (State of Incorporation) 1-14764 11-3415180 (Commission File Number) (IRS Employer Identification Number) CSC HOLDINGS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware (State of Incorporation) 1-9046 11-2776686 (Commission File Number) (IRS Employer Identification Number) 1111 Stewart Avenue, Bethpage, New York 11714 (Address of principal executive offices) Registrant's telephone number, including area code: (516) 803-2300 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. Cablevision Systems Corporation (the "Company") grants various awards to its executive officers under its Amended and Restated Employee Stock Option Plan (previously filed as Exhibit A to the Company's June 3, 2003 Proxy Statement) and its Long-Term Incentive Plan (previously filed as Exhibit B to the Company's June 3, 2003 Proxy Statement). Forms of award agreements used under the Plans for awards after November 7, 2005 are attached hereto as exhibits and are hereby incorporated by reference. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 10.1 Form of Nonqualified Stock Option Agreement 10.2 Form of Nonqualified Stock Option Agreement (Vesting Subject to Performance Metric) 10.3 Form of Restricted Shares Agreement 10.4 Form of Performance Award Agreement 10.5 Form of Deferred Compensation Agreement -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CABLEVISION SYSTEMS CORPORATION By: /s/ Michael P. Huseby -------------------------------------- Name: Michael P. Huseby Title: Executive Vice President and Chief Financial Officer Dated: November 1, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CSC HOLDINGS, INC. By: /s/ Michael P. Huseby -------------------------------------- Name: Michael P. Huseby Title: Executive Vice President and Chief Financial Officer Dated: November 1, 2005 -3- EX-10.1 2 ex_10-1.txt FORM OF NONQUALIFIED STOCK OPTION AGMT EXHIBIT 10.1 [TEMPLATE - OPTIONS] [DATE] [FULL NAME] [ADDRESS] Dear [FIRST NAME], Pursuant to the Company's Employee Stock Plan (the "Plan"), on ___________ (the "Effective Date") you were selected by the Compensation Committee of the Board of Directors (as more fully described in Paragraph 14, the "Committee") of Cablevision Systems Corporation (the "Company") to receive nonqualified stock options (the "Options") to purchase ____ (___) shares of NY Group Class A Common Stock of the Company (the "Class A Common Stock") at a price of $____ per share. Capitalized terms used but not defined in this agreement (this "Agreement") have the meanings given to them in the Plan. The Options are granted subject to the terms and conditions set forth below: 1. Vesting. [_________ Options are vested and exercisable.] [If you remain in the continuous employ of the Company or any Affiliate, the Options will become vested and exercisable in accordance with the following schedule: -------------------------------------------------------------- Portion of Date Options Becoming Exercisable -------------------------------------------------------------- -------------------------------------------------------------- ] 2. Exercise. You may exercise the Options that become vested and exercisable by giving written notice to the Secretary of the Company specifying the number of shares of Class A Common Stock as to which the Options are being exercised (the "Exercise Notice"), together with a copy of this Agreement. Unless the Company chooses to settle such exercise in cash, shares of Class A Common Stock, or a combination thereof pursuant to Paragraph 3, you will be required to deliver to the Company within five (5) days of your delivery of the Exercise Notice, payment in full of the exercise price due on account of such exercise. You may pay the exercise price by cash, by certified check, by surrendering shares of Class A Common Stock or by any combination thereof. Class A Common Stock used to pay the exercise price pursuant to this Paragraph 2 will be valued at the Fair Market Value as of the day preceding the date of exercise. 3. Option Spread. Upon receipt of the Exercise Notice, the Company may elect, in lieu of issuing shares of Class A Common Stock, to settle the exercise covered by such notice by paying you an amount equal to the product obtained by multiplying (i) the excess of the Fair Market Value of one (1) share of Class A Common Stock on the date of exercise over the per share exercise price of the Options (the "Option Spread") by (ii) the number of shares of Class A Common Stock specified in the Exercise Notice. The amount payable to you in these circumstances may be paid by the Company either in cash or in shares of Class A Common Stock having a Fair Market Value equal to the Option Spread, or a combination thereof, as the Company shall determine. Class A Common Stock used to pay the Option Spread pursuant to this Paragraph 3 will be valued at the Fair Market Value as of the day the Exercise Notice is received by the Company. 4. Expiration. The Options will terminate automatically and without further notice on the tenth (10th) anniversary of ___________, or at any of the following dates, if earlier: (A) with respect to those Options which are then unexercisable; the date upon which you cease to be an employee of the Company or an Affiliate; (B) with respect to those Options which are then exercisable: (i) _____________ (____) [days] [months] [years] following the date upon which you cease to be an employee of the Company or an Affiliate, unless you cease to be an employee by reason of (y) death, Disability (as defined below) or retirement with the Company's consent or (z) your employment having been terminated for Cause (as defined below); (ii) _____________ (____) [days] [months] [years] following the date upon which you cease to be an employee of the Company or an Affiliate, if such cessation is the result of Disability or Retirement; or (C) with respect to all your then outstanding Options, whether exercisable or unexercisable, the date upon which your employment is terminated for Cause. For purposes of this Agreement, "Cause" means, as determined by the Committee, 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, "Disability" means your inability to perform for six (6) continuous months substantially all the essential duties of your occupation, as determined by the Committee. For purposes of this Agreement, "Retirement" means ___________. Notwithstanding the first (1st) sentence of this Paragraph 4, in the event of your death during the period that your Options are exercisable, whether death occurs before or after you cease employment, the Options that are exercisable at the time of your death shall remain exercisable by your estate or beneficiary until the first (1st) anniversary of your death, whether or not such first (1st) anniversary occurs prior to the tenth (10th) anniversary of the Effective Date. -2- 5. Change of Control. As set forth in Appendix 1 attached hereto, the Options may be affected in the event of a Change of Control or a going private transaction (each as defined in Appendix 1 attached hereto) of the Company. 6. 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 exercising the Options and receiving shares of Class A Common Stock and cash. 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 exercise of the Options, 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 16 of the Plan. 7. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the Options, other than to the extent provided in the Plan. 8. Non-Qualification as ISO. The Options are not intended to qualify as "incentive stock options" within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended. 9. Relationship with Competitive Entities. In the event you shall voluntarily terminate your employment or your employment is terminated for Cause, you shall not become employed by, consult to, or have any interest, directly or indirectly, in any Competitive Entity (as defined below) within one (1) year of exercising any Options hereunder. If you shall voluntarily terminate your employment or your employment is terminated for Cause, and, in either case, subsequently become employed by, consult to, or have any interest, directly or indirectly, in a Competitive Entity during such one-year period, you shall within ten (10) business days thereof pay the Company, as liquidated damages and not as a penalty, an amount equal to the sum of (a) the product of the Option Spread multiplied by the number of shares of Class A Common Stock with respect to which the Options were exercised during such one-year period, plus (b) interest at a rate equal to the lesser of (i) twelve percent (12%) per annum or (ii) the maximum interest rate permitted by applicable law, compounded quarterly, calculated from the date you exercised the Options until the date such payment to the Company is made. A "Competitive Entity" shall mean (1) any company that competes (including, without limitation, by means of direct broadcast satellite or a fiber optic or other network) with any of the Company's cable television, telephone or on-line data businesses in the New York City Metropolitan Area (as defined in Appendix 1 attached hereto) or that competes with any of the Company's programming, cinema, sports or entertainment businesses, nationally or regionally; or (2) any trade or professional association representing any of the companies covered by this Paragraph 9, other than the National Cable Television Association and any state cable television association. Ownership of not more than one percent (1%) of the outstanding stock of any publicly-traded company shall not be a violation of this Paragraph 9. By accepting this Agreement, you understand that the terms and conditions of this Paragraph 9 may limit your ability to earn a livelihood in a business similar to the business of the Company, but nevertheless hereby agree that the restrictions and limitations hereof are reasonable in scope, area and duration, and that the consideration provided under the Plan and this -3- Agreement is sufficient to justify the restrictions and limitations contained in this Paragraph 9. Accordingly, in consideration thereof and in light of your education, skills and abilities, by participating in the Plan, you hereby agree that you will not assert, and it should not be considered, that such provisions are either unreasonable in scope, area or duration, or will prevent you from earning a living, or otherwise are void, voidable or unenforceable or should be voided or held unenforceable. You further understand and hereby agree that the restrictions and limitations contained in this Paragraph 9 are ancillary to, and part of, the Plan and this Agreement, and are reasonably necessary to protect the good will and business interests of the Company. You hereby agree that a breach or threatened breach on your part of the restrictions and limitations contained in this Paragraph 9 will cause such damage to the Company as will be irreparable and for that reason you further agree that the Company shall be entitled as a matter of right to an injunction or other equitable relief out of any court of competent jurisdiction, restraining any further violation of this Paragraph 9 by you. The right to injunction or other equitable relief shall be cumulative and in addition to any and all other remedies the Company may have, including, specifically, recovery of money damages and any other legal or equitable relief available. You hereby waive any requirement for security or the posting of any bond or other surety and proof of damages in connection with any temporary or permanent award of injunctive or other equitable relief. 10. Securities Law Acknowledgments. You hereby acknowledge and confirm to the Company that (i) you are aware that the shares of Class A Common Stock are publicly-traded securities and (ii) the shares of Class A Common Stock issuable upon exercise of the Options may not be sold or otherwise transferred unless such sale or transfer is registered under the Securities Act of 1933, as amended, and the securities laws of any applicable state or other jurisdiction, or is exempt from such registration. 11. Governing Law. This Agreement shall be deemed to be made under, and in all respects shall be interpreted, construed and governed by and in accordance with, the laws of the State of New York. 12. Jurisdiction and Venue. You hereby irrevocably submit to the jurisdiction of the courts of the State of New York and the Federal courts of the United States of America 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 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 hereby agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof. 13. Right of Offset. You hereby agree that if the Company shall owe you any amount (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. You hereby further agree that if you shall owe the Company any amount (the "Optionee-Owed Amount") under Paragraph 9 of this Agreement, then the Company shall have the right to offset the Optionee-Owed Amount, to the maximum extent permitted by law, against any amount you may be entitled to receive from the Company or its Affiliates under this Agreement or otherwise (in- -4- cluding, without limitation, any wages, vacation pay, or other compensation or benefit under any benefit plan or other compensatory arrangement). 14. 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. 15. 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. 16. Amendment. The Committee reserves the right at any time to amend the terms and conditions set forth in this Agreement, except that no such amendment shall materially adversely affect your economic rights under this Agreement 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. 17. Options Subject to the Plan. The Options granted by this Agreement are subject to the Plan. 18. 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 or renewed, provided that such modification or renewal shall not extend the time any Options may be exercised beyond the time provided herein or in such original employment agreement), this Agreement and the Plan constitute the entire understanding and agreement of you and the Company with respect to the Options 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 Options 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 followed by the terms and conditions of this Agreement. 19. 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. 20. 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. 21. Severability. The terms or conditions 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. 22. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be considered in agreement that all shares of Class A Common Stock and cash received upon each exercise of the Options 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 all such shares of Class A Common Stock and cash 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. -5- 23. 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. 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. 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. CABLEVISION SYSTEMS CORPORATION By: ----------------------------- Name: Title: 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. - ------------------------------ Optionee: ---------------------- -6- APPENDIX 1 TO STOCK OPTION AWARD AGREEMENT In the event of a "Change of Control" of the Company or a "going private transaction," as defined below, your entitlement to exercise the Options shall be as follows: 1. If the Company or the "surviving entity", as defined below, has shares of common stock (or partnership units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ, the Committee shall, to the extent that the Options have not been exercised and have not expired (the "Outstanding Options"), no later than the effective date of the transaction which results in a Change of Control or going private transaction either (A) convert your rights in the Outstanding Options into a right to receive an amount of cash equal to (i) the number of common shares subject or relating to the Outstanding Options multiplied by (ii) the excess of (x) the "offer price per share," the "acquisition price per share" or the "merger price per share," each as defined below, whichever of such amounts is applicable, over (y) the exercise price of the shares subject or relating to the Outstanding Options, or (B) arrange to have the surviving entity grant to you in substitution for your Outstanding Options an award of options for shares of common stock (or partnership units) of the surviving entity on the same terms with a value equivalent to the Outstanding Options and which will, in the good faith determination of the Committee, provide you with an equivalent profit potential. 2. If the Company or the surviving entity does not have shares of common stock (or partnership units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ, the Committee shall convert your rights in the Outstanding Options into a right to receive an amount of cash equal to the amount calculated as per Section 1(A) above. 3. The cash award provided in Section 1 or 2 shall become payable to you, and the substitute options of the surviving entity provided in Section 1 will become exercisable (1) with respect to the Outstanding Options that were not exercisable on the effective date of the Change of Control or going private transaction, as the case may be, at the earlier of (a) the date on which the Outstanding Options would otherwise have become exercisable hereunder had they continued in effect, or (b) the date on which your employment with the Company or the surviving entity is terminated (i) by the Company or the surviving entity other than for Cause, if such termination occurs within three (3) years of the Change of Control or going private transaction, (ii) by you for "good reason," as defined below, if such termination occurs within three (3) years of the Change of Control or going private transaction or (iii) by you for any reason at least six (6) months, but not more than nine (9) months after the effective date of the Change of Control or going private transaction, or (2) with respect to the Outstanding Options that were exercisable on the effective date of the Change of Control or going private transaction, as the case may be, the substitute options shall become exercisable immediately and the cash awards shall become payable promptly. The amount payable in cash shall be payable together with interest from the effective date of the Change of Control or going private transaction until the date of payment at (a) the weighted average cost of capital of the Company immediately prior to the effectiveness of the Change of Control or going private transaction, or (b) if the Company (or the surviving en- -7- tity) sets aside the funds in a trust or other funding arrangement, the actual earnings of such trust or other funding arrangement. 4. As used herein, "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 (1) the power to direct the management of substantially all the cable television systems then owned by the Company in the New York City Metropolitan Area (as hereinafter defined) or (2) after any fiscal year of the Company in which all the systems referred to in clause (1) above shall have contributed in the aggregate less than a majority of the net revenues of the Company and its consolidated subsidiaries, the power to direct the management of the Company or substantially all its assets. Net revenues shall be determined by the independent accountants of the Company in accordance with generally accepted accounting principles consistently applied and certified by such accountants. "New York City Metropolitan Area" means all locations within the following counties: (i) New York, Richmond, Kings, Queens, Bronx, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, Sullivan, Dutchess, and Ulster in New York State; (ii) Hudson, Bergen, Passaic, Sussex, Warren, Hunterdon, Somerset, Union, Morris, Middlesex, Mercer, Monmouth, Essex and Ocean in New Jersey; (iii) Pike in Pennsylvania; and (iv) Fairfield and New Haven in Connecticut. "Surviving entity" means the entity that owns, directly or indirectly, after consummation of any transaction, substantially all the cable television systems owned directly or indirectly by the Company in the New York City Metropolitan Area prior to consummation of such transaction. If any such entity is at least majority-owned, directly or indirectly, by any entity (a "parent entity") which has shares of common stock (or partnership units) traded on a national stock exchange or the over-the-counter market, as reported on NASDAQ, then such parent entity shall be deemed to be the surviving entity provided that if there shall be more than one such parent entity, the parent entity closest to ownership of the Company's cable television systems shall be deemed to be the surviving entity. If in connection with any transaction, a Change of Control or going private transaction occurs and no entity shall own, after consummation of such transaction, substantially all the cable television systems owned by the Company in the New York City Metropolitan Area prior to consummation of such transaction, then, notwithstanding any other provision of this Section 4 to the contrary, there shall not be deemed to be a surviving entity so that the provisions of Section 1(B) shall not be applicable. Ownership of "substantially all" the Company's New York City Metropolitan Area cable television systems shall mean ownership, after consummation of such transaction (or series of related transactions), of an aggregate of at least eighty percent (80%) of the basic subscribers of all the cable television systems owned by the Company and its consolidated subsidiaries in the New York City Metropolitan Area prior to such transaction (or series of related transactions). "Going private transaction" means a transaction described in Rule 13e-3 to the Securities and Exchange Act of 1934. -8- "Good reason" means (i) 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 Change of Control 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; (ii) 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; (iii) 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 such event except for travel reasonably required in the performance of your responsibilities; or (iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 1. "Offer price per share" shall mean, in the case of a tender offer or exchange offer which results in a Change of Control or going private transaction (an "Offer"), the greater of (i) the highest price per share of common stock paid pursuant to the Offer, or (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of a Change of Control or going private transaction. Any securities or property which are part or all of the consideration paid for shares of common stock in the Offer shall be valued in determining the Offer Price per share at the higher of (A) the valuation placed on such securities or property by the Company, person or other entity making such offer or (B) the valuation placed on such securities or property by the Committee. "Merger price per share" shall mean, in the case of a merger, consolidation, sale, exchange or other disposition of assets that results in a Change of Control or going private transaction (a "Merger"), the greater of (i) the fixed or formula price for the acquisition of shares of common stock occurring pursuant to the Merger, and (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of such Change of Control or going private transaction. Any securities or property which are part or all of the consideration paid for shares of common stock pursuant to the Merger shall be valued in determining the merger price per share at the higher of (A) the valuation placed on such securities or property by the Company, person or other entity which is a party with the Company to the Merger, or (B) the valuation placed on such securities or property by the Committee. "Acquisition price per share" shall mean the greater of (i) the highest price per share stated on the Schedule 13D or any amendment thereto filed by the holder of twenty percent (20%) or more of the Company's voting power which gives rise to the Change of Control or going private transaction, and (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of such Change of Control or going private transaction. -9- EX-10.2 3 ex_10-2.txt FORM OF NONQUALIFIED STOCK OPTION AGMT EXHIBIT 10.2 [OPTIONS/VESTING SUBJECT TO PERFORMANCE METRIC] [DATE] [FULL NAME] [ADDRESS] Dear [FIRST NAME], Pursuant to the Company's Employee Stock Plan (the "Plan"), on ______________ (the "Effective Date") you were selected by the Compensation Committee of the Board of Directors (as more fully described in Paragraph 15, the "Committee") of Cablevision Systems Corporation (the "Company") to receive nonqualified stock options (the "Options") to purchase ____ (___) shares of NY Group Class A Common Stock of the Company (the "Class A Common Stock") at a price of $____ per share. Capitalized terms used but not defined in this agreement (this "Agreement") have the meanings given to them in the Plan. The Options are granted subject to the terms and conditions set forth below: 1. Vesting. If you remain in the continuous employ of the Company or any Affiliate, the Options will become vested and exercisable on _____________ (the "Normal Vesting Date") to the extent, if any, that the performance objectives set forth on Appendix 1 attached hereto (the "Objectives") are achieved. Any Options that do not become so vested and exercisable will automatically terminate without notice. 2. Exercise. You may exercise the Options that become vested and exercisable by giving written notice to the Secretary of the Company specifying the number of shares of Class A Common Stock as to which the Options are being exercised (the "Exercise Notice"), together with a copy of this Agreement. Unless the Company chooses to settle such exercise in cash, shares of Class A Common Stock, or a combination thereof pursuant to Paragraph 3, you will be required to deliver to the Company within five (5) days of your delivery of the Exercise Notice, payment in full of the exercise price due on account of such exercise. You may pay the exercise price by cash, by certified check, by surrendering shares of Class A Common Stock or by any combination thereof. Class A Common Stock used to pay the exercise price pursuant to this Paragraph 2 will be valued at the Fair Market Value as of the day preceding the date of exercise. 3. Option Spread. Upon receipt of the Exercise Notice, the Company may elect, in lieu of issuing shares of Class A Common Stock, to settle the exercise covered by such notice by paying you an amount equal to the product obtained by multiplying (i) the excess of the Fair Market Value of one (1) share of Class A Common Stock on the date of exercise over the per share exercise price of the Options (the "Option Spread") by (ii) the number of shares of Class A Common Stock specified in the Exercise Notice. The amount payable to you in these circumstances may be paid by the Company either in cash or in shares of Class A Common Stock having a Fair Market Value equal to the Option Spread, or a combination thereof, as the Company shall determine. Class A Common Stock used to pay the Option Spread pursuant to this Paragraph 3 will be valued at the Fair Market Value as of the day the Exercise Notice is received by the Company. 4. Expiration. The Options will terminate automatically and without further notice on the tenth (10th) anniversary of __________ unless terminated earlier as provided in Paragraph 5. 5. Termination of Employment. (A) Termination for Cause. If you do not remain in the continuous employ of the Company or any Affiliate and such employment was terminated for Cause, the Options will terminate automatically and without further notice upon the date of such termination. (B) Termination as a Result of Death. If you do not remain in the continuous employ of the Company or any Affiliate and such employment was terminated as a result of your death before the Normal Vesting Date, notwithstanding Paragraph 1, a number of Options shall immediately vest and become exercisable that is equal to (i) the number of Options granted hereby multiplied by (ii) the number of complete years that have elapsed from _____________ to your date of termination divided by ______ (__) (such number of Options with respect to any termination prior to the Normal Vesting Date, your "Available Options"). All other Options will terminate automatically and without further notice upon the date of such termination. Such Available Options shall remain exercisable by your estate or beneficiary until the first (1st) anniversary of the Normal Vesting Date. (C) Termination for Disability or Retirement. If you do not remain in the continuous employ of the Company or any Affiliate and such employment was terminated for Disability (as defined below) or Retirement (as defined below) before the Normal Vesting Date, your Available Options (calculated as set forth in Paragraph 5(B)) shall remain unvested and outstanding. All Options granted hereby other than the Available Options shall terminate automatically and without further notice upon the date of your termination. Your Available Options shall vest and become exercisable to the extent, if any, that the Objectives are achieved and shall remain exercisable for _____ (__) [days] [months] [years] after the Normal Vesting Date. All Available Options that do not so vest shall terminate automatically and without further notice upon the Normal Vesting Date. If you do not remain in the continuous employ of the Company or any Affiliate and such employment was terminated for Disability or Retirement after the Normal Vesting Date, the outstanding Options that became vested and exercisable on the Normal Vesting Date -2- shall remain exercisable for _____ (__) [days] [months] [years] after such termination. (D) Other Terminations. If you do not remain in the continuous employ of the Company or any Affiliate and such employment was terminated before the Normal Vesting Date for any reason other than Cause, death, Disability or Retirement, your Available Options (calculated as set forth in Paragraph 5(B)) shall remain unvested and outstanding. All Options granted hereby other than the Available Options shall terminate automatically and without further notice upon the date of your termination. Your Available Options shall vest and become exercisable on the Normal Vesting Date to the extent, if any, that the Objectives are achieved and become exercisable on the Normal Vesting Date and shall remain exercisable for ___________ (___) [days] [months] [years] thereafter. All Available Options that do not so vest shall terminate automatically and without further notice upon the Normal Vesting Date. If you do not remain in the continuous employ of the Company or any Affiliate and such employment was terminated after the Normal Vesting Date for any reason other than Cause, death, Disability or Retirement, the outstanding Options that became vested and exercisable on the Normal Vesting Date shall remain exercisable for _____________ (___) [days] [months] [years] after such termination. For purposes of this Agreement, "Cause" means, as determined by the Committee, 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, "Disability" means your inability to perform for six (6) continuous months substantially all the essential duties of your occupation, as determined by the Committee. For purposes of this Agreement, "Retirement" means ____________. Notwithstanding anything to the contrary in this Paragraph 5, in the event of your death during the period that your Options are exercisable, whether death occurs before or after you cease employment, the Options that are exercisable at the time of your death shall remain exercisable by your estate or beneficiary until the first (1st) anniversary of your death, whether or not such first (1st) anniversary occurs prior to the tenth (10th) anniversary of the Effective Date. 6. Change of Control. Notwithstanding Paragraph 1, as set forth in Appendix 2 attached hereto the Options may be affected in the event of a Change of Control or going private transaction (each as defined in Appendix 2 attached hereto) of the Company. 7. 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 exercising the Options and receiving shares of Class A Common Stock and cash. You hereby -3- 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 exercise of the Options, 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 16 of the Plan. 8. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the Options, other than to the extent provided in the Plan. 9. Non-Qualification as ISO. The Options are not intended to qualify as "incentive stock options" within the meaning of Section 422A of the Internal Revenue Code of 1986, as amended. 10. Relationship with Competitive Entities. In the event you shall voluntarily terminate your employment or your employment is terminated for Cause, you shall not become employed by, consult to, or have any interest, directly or indirectly, in any Competitive Entity (as defined below) between the date of such termination and the Normal Vesting Date or within one (1) year of exercising any Options hereunder. If you shall voluntarily terminate your employment or your employment is terminated for Cause, and, in either case, subsequently become employed by, consult to, or have any interest, directly or indirectly, in a Competitive Entity during the periods described above, the Company, in its sole discretion, may terminate your Available Options. If you shall voluntarily terminate your employment or your employment is terminated for Cause, and, in either case, subsequently become employed by, consult to, or have any interest, directly or indirectly, in a Competitive Entity within one (1) year of exercising any Options hereunder, you shall within ten (10) business days thereof pay the Company, as liquidated damages and not as a penalty, an amount equal to the sum of (a) the product of the Option Spread multiplied by the number of shares of Class A Common Stock with respect to which the Options were exercised during such one-year period, plus (b) interest at a rate equal to the lesser of (i) twelve percent (12%) per annum or (ii) the maximum interest rate permitted by applicable law, compounded quarterly, calculated from the date you exercised the Options until the date such payment to the Company is made. A "Competitive Entity" shall mean (1) any company that competes (including, without limitation, by means of direct broadcast satellite or a fiber optic or other network) with any of the Company's cable television, telephone or on-line data businesses in the New York City Metropolitan Area (as defined in Appendix 2 attached hereto) or that competes with any of the Company's programming, cinema, sports or entertainment businesses, nationally or regionally; or (2) any trade or professional association representing any of the companies covered by this Paragraph 10, other than the National Cable Television Association and any state cable television association. Ownership of not more than one percent (1%) of the outstanding stock of any publicly-traded company shall not be a violation of this Paragraph 10. By accepting this Agreement, you understand that the terms and conditions of this Paragraph 10 may limit your ability to earn a livelihood in a business similar to the business of the Company, but nevertheless hereby agree that the restrictions and limitations hereof are reasonable in scope, area and duration, and that the consideration provided under the Plan and this Agreement is sufficient to justify the restrictions and limitations contained in this Paragraph 10. Accordingly, in consideration thereof and in light of your education, skills and abilities, by -4- participating in the Plan, you hereby agree that you will not assert, and it should not be considered, that such provisions are either unreasonable in scope, area or duration, or will prevent you from earning a living, or otherwise are void, voidable or unenforceable or should be voided or held unenforceable. You further understand and hereby agree that the restrictions and limitations contained in this Paragraph 10 are ancillary to, and part of, the Plan and this Agreement, and are reasonably necessary to protect the good will and business interests of the Company. You hereby agree that a breach or threatened breach on your part of the restrictions and limitations contained in this Paragraph 10 will cause such damage to the Company as will be irreparable and for that reason you further agree that the Company shall be entitled as a matter of right to an injunction or other equitable relief out of any court of competent jurisdiction, restraining any further violation of this Paragraph 10 by you. The right to injunction or other equitable relief shall be cumulative and in addition to any and all other remedies the Company may have, including, specifically, recovery of money damages and any other legal or equitable relief available. You hereby waive any requirement for security or the posting of any bond or other surety and proof of damages in connection with any temporary or permanent award of injunctive or other equitable relief. 11. Securities Law Acknowledgments. You hereby acknowledge and confirm to the Company that (i) you are aware that the shares of Class A Common Stock are publicly-traded securities and (ii) the shares of Class A Common Stock issuable upon exercise of the Options may not be sold or otherwise transferred unless such sale or transfer is registered under the Securities Act of 1933, as amended, and the securities laws of any applicable state or other jurisdiction, or is exempt from such registration. 12. Governing Law. This Agreement shall be deemed to be made under, and in all respects shall be interpreted, construed and governed by and in accordance with, the laws of the State of New York. 13. Jurisdiction and Venue. You hereby irrevocably submit to the jurisdiction of the courts of the State of New York and the Federal courts of the United States of America 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 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 hereby agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof. 14. Right of Offset. You hereby agree that if the Company shall owe you any amount (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. You hereby further agree that if you shall owe the Company any amount (the "Optionee-Owed Amount") under Paragraph 10 of this Agreement, then the Company shall have the right to offset the Optionee-Owed Amount, to the maximum extent permitted by law, against any amount you may be entitled to receive from the Company or its Affiliates under this Agreement or otherwise (in- -5- cluding, without limitation, any wages, vacation pay, or other compensation or benefit under any benefit plan or other compensatory arrangement). 15. 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. 16. 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. 17. Amendment. The Committee reserves the right at any time to amend the terms and conditions set forth in this Agreement, except that no such amendment shall materially adversely affect your economic rights under this Agreement 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. 18. Options Subject to the Plan. The Options granted by this Agreement are subject to the Plan. 19. 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 or renewed, provided that such modification or renewal shall not extend the time any Options may be exercised beyond the time provided herein or in such original employment agreement), this Agreement and the Plan constitute the entire understanding and agreement of you and the Company with respect to the Options 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 Options 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 followed by the terms and conditions of this Agreement. 20. 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. 21. 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. 22. Severability. The terms or conditions 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. 23. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be considered in agreement that all shares of Class A Common Stock and cash received upon each exercise of the Options 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 all such shares of Class A Common Stock and cash 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. -6- 24. 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. 25. 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. 26. Effective Date. Upon execution by you, this Agreement shall be effective from and as of the Effective Date. -7- 27. 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. CABLEVISION SYSTEMS CORPORATION By: ----------------------------- Name: Title: 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. - ------------------------------ Optionee: ---------------------- -8- APPENDIX 1 TO STOCK OPTION AWARD AGREEMENT (VESTING SUBJECT TO PERFORMANCE METRIC) [Objectives] -9- APPENDIX 2 TO STOCK OPTION AWARD AGREEMENT (VESTING SUBJECT TO PERFORMANCE METRIC) In the event of a "Change of Control" of the Company or a "going private transaction," as defined below, your entitlement to exercise the Options shall be as follows: 1. If the Company or the "surviving entity", as defined below, has shares of common stock (or partnership units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ, the Committee shall, to the extent that the Options have not been exercised and have not expired (the "Outstanding Options"), no later than the effective date of the transaction which results in a Change of Control or going private transaction either (A) convert your rights in the Outstanding Options into a right to receive an amount of cash equal to (i) the number of common shares subject or relating to the Outstanding Options multiplied by (ii) the excess of (x) the "offer price per share," the "acquisition price per share" or the "merger price per share," each as defined below, whichever of such amounts is applicable, over (y) the exercise price of the shares subject or relating to the Outstanding Options, or (B) arrange to have the surviving entity grant to you in substitution for your Outstanding Options an award of options for shares of common stock (or partnership units) of the surviving entity on the same terms with a value equivalent to the Outstanding Options and which will, in the good faith determination of the Committee, provide you with an equivalent profit potential. 2. If the Company or the surviving entity does not have shares of common stock (or partnership units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ, the Committee shall convert your rights in the Outstanding Options into a right to receive an amount of cash equal to the amount calculated as per Section 1(A) above. 3. The cash award provided in Section 1 or 2 shall become payable to you, and the substitute options of the surviving entity provided in Section 1 will become vested and exercisable (1) immediately (or, for cash payments, promptly) with respect to the number of Outstanding Options granted hereby (irrespective of Company performance or achievement of the Objectives) multiplied by the number of complete years that have elapsed from ____________ to the effective date of the Change of Control or going private transaction divided by ______ (__), and (2) with respect to the remaining Outstanding Options, ________ (___) of the number of Options granted hereby upon each remaining anniversary of ___________ through the Normal Vesting Date (irrespective of Company performance or achievement of the Objectives); provided that, in any event, any remaining Outstanding Options shall become payable promptly and any substitute options shall become vested and exercisable, as applicable, upon the date on which your employment with the Company or the surviving entity is terminated (i) by the Company or the surviving entity other than for Cause, if such termination occurs within three (3) years of the Change in Control or going private transaction, (ii) by you for "good reason," as defined below, if such termination occurs within three (3) years of the Change in Control or going private transaction or (iii) by you for any reason at least six (6) months, but not more than nine (9) months after the effective date of the Change of Control or going private transaction. The amount payable in cash shall be payable together with interest from the ef- -10- fective date of the Change of Control or going private transaction until the date of payment at (a) the weighted average cost of capital of the Company immediately prior to the effectiveness of the Change of Control or going private transaction, or (b) if the Company (or the surviving entity) sets aside the funds in a trust or other funding arrangement, the actual earnings of such trust or other funding arrangement. 4. As used herein, "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 (1) the power to direct the management of substantially all the cable television systems then owned by the Company in the New York City Metropolitan Area (as hereinafter defined) or (2) after any fiscal year of the Company in which all the systems referred to in clause (1) above shall have contributed in the aggregate less than a majority of the net revenues of the Company and its consolidated subsidiaries, the power to direct the management of the Company or substantially all its assets. Net revenues shall be determined by the independent accountants of the Company in accordance with generally accepted accounting principles consistently applied and certified by such accountants. "New York City Metropolitan Area" means all locations within the following counties: (i) New York, Richmond, Kings, Queens, Bronx, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, Sullivan, Dutchess, and Ulster in New York State; (ii) Hudson, Bergen, Passaic, Sussex, Warren, Hunterdon, Somerset, Union, Morris, Middlesex, Mercer, Monmouth, Essex and Ocean in New Jersey; (iii) Pike in Pennsylvania; and (iv) Fairfield and New Haven in Connecticut. "Surviving entity" means the entity that owns, directly or indirectly, after consummation of any transaction, substantially all the cable television systems owned directly or indirectly by the Company in the New York City Metropolitan Area prior to consummation of such transaction. If any such entity is at least majority-owned, directly or indirectly, by any entity (a "parent entity") which has shares of common stock (or partnership units) traded on a national stock exchange or the over-the-counter market, as reported on NASDAQ, then such parent entity shall be deemed to be the surviving entity provided that if there shall be more than one such parent entity, the parent entity closest to ownership of the Company's cable television systems shall be deemed to be the surviving entity. If in connection with any transaction, a Change of Control or going private transaction occurs and no entity shall own, after consummation of such transaction, substantially all the cable television systems owned by the Company in the New York City Metropolitan Area prior to consummation of such transaction, then, notwithstanding any other provision of this Section 4 to the contrary, there shall not be deemed to be a surviving entity so that the provisions of Section 1(B) shall not be applicable. Ownership of "substantially all" the Company's New York City Metropolitan Area cable television systems shall mean ownership, after consummation of such transaction (or series of related transactions), of an aggregate of at least eighty percent (80%) of the basic subscribers of all the cable television systems owned by the Company and its consolidated subsidiaries in the New York City Metropolitan Area prior to such transaction (or series of related transactions). "Going private transaction" means a transaction described in Rule 13e-3 to the Securities and Exchange Act of 1934. -11- "Good reason" means (i) 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 Change of Control 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; (ii) 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; (iii) 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 such event except for travel reasonably required in the performance of your responsibilities; or (iv) any failure by the Company to obtain the assumption and agreement to perform this Agreement by a successor as contemplated by Section 1. "Offer price per share" shall mean, in the case of a tender offer or exchange offer which results in a Change of Control or going private transaction (an "Offer"), the greater of (i) the highest price per share of common stock paid pursuant to the Offer, or (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of a Change of Control or going private transaction. Any securities or property which are part or all of the consideration paid for shares of common stock in the Offer shall be valued in determining the Offer Price per share at the higher of (A) the valuation placed on such securities or property by the Company, person or other entity making such offer or (B) the valuation placed on such securities or property by the Committee. "Merger price per share" shall mean, in the case of a merger, consolidation, sale, exchange or other disposition of assets that results in a Change of Control or going private transaction (a "Merger"), the greater of (i) the fixed or formula price for the acquisition of shares of common stock occurring pursuant to the Merger, and (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of such Change of Control or going private transaction. Any securities or property which are part or all of the consideration paid for shares of common stock pursuant to the Merger shall be valued in determining the merger price per share at the higher of (A) the valuation placed on such securities or property by the Company, person or other entity which is a party with the Company to the Merger, or (B) the valuation placed on such securities or property by the Committee. "Acquisition price per share" shall mean the greater of (i) the highest price per share stated on the Schedule 13D or any amendment thereto filed by the holder of twenty percent (20%) or more of the Company's voting power which gives rise to the Change of Control or go- -12- ing private transaction, and (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of such Change of Control or going private transaction. -13- EX-10.3 4 ex_10-3.txt FORM OF RESTRICTED SHARES AGMT EXHIBIT 10.3 [TEMPLATE - RESTRICTED SHARES] [Full Name of Employee] [Address] [Date] Dear [First Name]: Pursuant to the Company's Employee Stock Plan (the "Plan"), you have been selected by the Compensation Committee of the Board of Directors (as more fully described in Section 12, the "Committee") of Cablevision Systems Corporation (the "Company") to receive _____ (___) restricted shares ("Restricted Shares") of NY Group Class A Common Stock, par value $.01 per share ("Common Shares") effective as of ____________ (the "Grant Date"). Capitalized terms used but not defined in this agreement (this "Agreement") have the meanings given to them in the Plan. The Restricted Shares are subject to the terms and conditions set forth below: 1. Consideration. You are required to pay the Company the aggregate par value amount of the Restricted Shares no later than forty-five (45) business days from the Grant Date. The total par value amount of your Restricted Shares is $______ (the "Par Value Amount"). By executing this agreement below, you hereby consent to and authorize the deduction by the Company of such amount from your salary. 2. Vesting. None of your Restricted Shares will vest and you will forfeit all of them if you do not remain continuously employed with the Company or one of its Affiliates from the Grant Date through _____________, except that a portion of your Restricted Shares may vest sooner if you are terminated without Cause (as defined below) or, in accordance with Section 4, die or become disabled (as defined in Section 4). For purposes of this Agreement, "Cause" means, as determined by the Committee, 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. 3. Accelerated Vesting for Termination Without Cause. If the Company or one of its Affiliates terminates your employment without Cause after ___________and before ___________, __________ percent (___%) of the Restricted Shares will vest as of the termination date (i.e., the last date of your employment with the Company or one of its Affiliates) and the balance of the Restricted Shares will be immediately forfeited. If the Company or one of its Affiliates terminates your employment without Cause on or after ___________ and before ____________, ___________ percent (___%) of the Restricted Shares will vest as of the termination date and the balance of the Restricted Shares will be immediately forfeited. As a condition to the accelerated vesting provided for in this Section 3, you will be required to sign and deliver a waiver and release substantially in the form attached as Annex 2 hereto; it being understood and agreed by you, however, that the Company reserves the right to amend the form of waiver and release from time to time to make such changes as the Company shall reasonably determine are either necessary or desirable including, without limitation, changes that may be required to reflect changes in law. In the event that the waiver and release covered by this Section 3 is required to be signed and delivered, the Company shall have no obligation under this Agreement or the Plan to take any action unless and until the waiver and release is fully effective and all rights to revoke, withdraw or otherwise terminate such waiver and release have expired or otherwise terminated. 4. Accelerated Vesting in the Event of Death or Disability. If your employment is terminated as a result of your death or disability, a portion of the Restricted Shares equal to the product of (i) the number of your Restricted Shares multiplied by (ii) a fraction, the numerator of which is the number of months you were employed from ________ until your termination date and the denominator of which is __________ (___), will vest as of the termination date and the balance of the Restricted Shares will be immediately forfeited. In the event of your death, your estate will be entitled to the Restricted Shares that have vested. For purposes of this Agreement, "disability" means your inability to perform for six (6) continuous months substantially all the essential duties of your occupation, as determined by the Committee. 5. Change of Control. As set forth in Annex 1 attached hereto, your entitlement to Restricted Shares may be affected in the event of a Change of Control of the Company or a going-private transaction (each as defined in Annex 1 attached hereto). 6. Relationship with Competitive Entities. In the event that you shall voluntarily terminate your employment or your employment is terminated for Cause, you shall not become employed by, consult to, or have any interest, directly or indirectly, in any Competitive Entity (as defined below) within one (1) year after your Restricted Shares have vested. If you shall voluntarily terminate your employment or your employment is terminated for Cause, and, in either case, subsequently become employed by, consult to, or have any interest, directly or indirectly, in a Competitive Entity during such one-year period, you shall within ten (10) business days thereof pay the Company, as liquidated damages and not as a penalty, an amount equal to (a) the gain (whether or not realized) attributable to the vesting of the Restricted Shares, plus (b) interest at a rate equal to the lesser of (i) twelve percent (12%) per annum or (ii) the maximum interest rate permitted by applicable law, compounded quarterly, calculated from the date the Restricted Shares vested until the date such payment to the Company is made. Such gain shall be equal to the greater of the (y) positive difference, if any, between the Fair Market Value of the Restricted Shares on the date such shares vest and the Par Value Amount paid for the Restricted Shares or (z) positive difference, if any, between the Fair Market Value of the Restricted Shares on your first (1st) day of employment by the Competitive Entity and the Par Value Amount paid for such shares. A "Competitive Entity" shall mean (1) any company that competes (including, without -2- limitation, by means of direct broadcast satellite or a fiber optic or other network) with any of the Company's cable television, telephone or on-line data businesses in the New York City Metropolitan Area (as defined in Annex 1 attached hereto) or that competes with any of the Company's programming, cinema, sports or entertainment businesses, nationally or regionally; or (2) any trade or professional association representing any of the companies covered by this Section 6, other than the National Cable Television Association and any state cable television association. Ownership of not more than one percent (1%) of the outstanding stock of any publicly-traded company shall not be a violation of this Section 6. By accepting this Agreement, you understand that the terms and conditions of this Section 6 may limit your ability to earn a livelihood in a business similar to the business of the Company, but nevertheless hereby agree that the restrictions and limitations hereof are reasonable in scope, area and duration, and that the consideration provided under the Plan and this Agreement is sufficient to justify the restrictions and limitations contained in this Section 6. Accordingly, in consideration thereof and in light of your education, skills and abilities, by participating in the Plan, you hereby agree that you will not assert, and it should not be considered, that such provisions are either unreasonable in scope, area or duration, or will prevent you from earning a living, or otherwise are void, voidable or unenforceable or should be voided or held unenforceable. You further understand and hereby agree that the restrictions and limitations contained in this Section 6 are ancillary to, and part of, the Plan and this Agreement, and are reasonably necessary to protect the good will and business interests of the Company. You hereby agree that a breach or threatened breach on your part of the restrictions and limitations contained in this Section 6 will cause such damage to the Company as will be irreparable and for that reason you further agree that the Company shall be entitled as a matter of right to an injunction or other equitable relief out of any court of competent jurisdiction, restraining any further violation of this Section 6 by you. The right to injunction or other equitable relief shall be cumulative and in addition to any and all other remedies the Company may have, including, specifically, recovery of money damages and any other legal or equitable relief available. You hereby waive any requirement for security or the posting of any bond or other surety and proof of damages in connection with any temporary or permanent award of injunctive or other equitable relief. 7. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the Restricted Shares, other than to the extent provided in the Plan. 8. Right to Vote and Receive Dividends. You have full voting rights with respect to the Restricted Shares. All dividends and distributions paid on your Restricted Shares will be retained by the Company for your account until your Restricted Shares vest and such dividends and distributions will be paid to you (without interest) when your Restricted Shares vest. 9. Section 83(b) Election. If you wish to make an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to recognize income with respect to the Restricted Shares before they become vested, you must file a Section 83(b) election with the Internal Revenue Service within thirty (30) days of the Grant Date and provide a copy of that filing to the Company. You are strongly encouraged to seek the advice of a tax consultant regarding the advisability of making a Section 83(b) election. YOU SHOULD NOTE THAT ANY TAXES YOU PAY AS A -3- RESULT OF YOUR SECTION 83(B) ELECTION CANNOT BE RECOVERED IF YOUR RESTRICTED SHARES ARE FORFEITED OR DECLINE IN VALUE. IT IS YOUR SOLE RESPONSIBILITY TO TIMELY FILE AN ELECTION UNDER SECTION 83(B). YOU MUST NOTIFY THE COMPANY WITHIN TEN (10) DAYS OF FILING ANY SUCH ELECTION. A Sample Form of Election under Section 83(b) is attached for your reference as Annex 3. 10. 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 Restricted Shares. 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 Restricted Shares, 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 16 of the Plan. 11. Delivery. Unless otherwise determined by the Committee, delivery of the Restricted Shares will be by book-entry credit to an account in your name that the Company has established at a custody agent (the "custodian"). The Company's transfer agent, Mellon Investor Services LLC, shall act as the custodian of the Restricted Shares; however, the Company may in its sole discretion appoint another custodian to replace Mellon Investor Services LLC. On the date your Restricted Shares vest, if you have complied with your obligations under this Agreement and provided that your tax obligations with respect to the vested Restricted Shares are appropriately satisfied, at your request, we will either instruct the custodian to electronically transfer your Common Shares to a brokerage or other account you specify or deliver to you a physical stock certificate representing your Common Shares. 12. Right of Offset. You hereby agree that if the Company shall have any obligation to you (the "Company Obligation") under this Agreement, then the Company shall have the right to offset against the Company Obligation, to the maximum extent permitted by law, any amounts that you may owe to the Company or its Affiliates of whatever nature. You hereby further agree that if you shall owe the Company any amount (the "Optionee-Owed Amount") under Section 6 of this Agreement, then the Company shall have the right to offset the Optionee-Owed Amount, to the maximum extent permitted by law, against any obligation from the Company or its Affiliates to you under this Agreement or otherwise (including, without limitation, any wages, vacation pay, or other compensation or benefit under any benefit plan or other compensatory arrangement). 13. 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. 14. 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. -4- 15. Amendment. The Committee reserves the right at any time to amend the terms and conditions set forth in this Agreement, except that no such amendment shall materially adversely affect your economic rights under this Agreement 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. 16. Restricted Shares Subject to the Plan. The Restricted Shares covered by this Agreement are subject to the Plan. 17. 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 or renewed), this Agreement and the Plan constitute the entire understanding and agreement of you and the Company with respect to the Restricted Shares 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 Restricted Shares 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 followed by the terms and conditions of this Agreement. 18. 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. 19. 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. 20. 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 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. 21. Securities Law Acknowledgments. You hereby acknowledge and confirm to the Company that (i) you are aware that the Common Shares are publicly-traded securities and (ii) Common Shares may not be sold or otherwise transferred unless such sale or transfer is registered under the Securities Act of 1933, as amended, and the securities laws of any applicable state or other jurisdiction, or is exempt from such registration. 22. 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. 23. 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. 24. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be considered in agreement that the Restricted Shares covered hereby shall be considered special -5- 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 all such shares 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. 25. 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. 26. 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. 27. Effective Date. Upon execution by you, this Agreement shall be effective from and as of the Grant Date. 28. 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. CABLEVISION SYSTEMS CORPORATION By: ----------------------------- Name: Title: 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: -6- ANNEX 1 TO RESTRICTED SHARES AGREEMENT In the event of a "Change of Control" of the Company or a "going private transaction," as defined below, your entitlement to Restricted Shares shall be as follows: 1. If the Company or the "surviving entity," as defined below, has shares of common stock (or partnership units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ, the Committee shall, no later than the effective date of the transaction which results in a Change of Control or going private transaction either (A) convert your unvested Restricted Shares into an amount of cash equal to (i) the number of your unvested Restricted Shares multiplied by (ii) the "offer price per share," the "acquisition price per share" or the "merger price per share," each as defined below, whichever of such amounts is applicable or (B) arrange to have the surviving entity grant to you an award of shares of common stock (or partnership units) of the surviving entity on the same terms and with a value equivalent to your unvested Restricted Shares which will, in the good faith determination of the Committee, provide you with an equivalent profit potential. 2. If the Company or the surviving entity does not have shares of common stock (or partnership units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ, the Committee shall convert your unvested Restricted Shares into an amount of cash equal to the amount calculated as per Paragraph 1(A) above. 3. The cash award provided in Paragraph 1 or 2 shall become payable to you at the earlier of (a) the date on which your Restricted Shares are scheduled to vest, or (b) the date on which your employment with the Company or the surviving entity is terminated (i) by the Company or the surviving entity other than for Cause, if such termination occurs within three (3) years of the Change of Control or going private transaction, (ii) by you for "good reason," as defined below, if such termination occurs within three (3) years of the Change of Control or going private transaction or (iii) by you for any reason at least six (6) months, but not more than nine (9) months after the effective date of the Change of Control or going private transaction. The amount payable in cash shall be payable together with interest from the effective date of the Change of Control or going private transaction until the date of payment at (a) the weighted average cost of capital of the Company immediately prior to the effectiveness of the Change of Control or going private transaction, or (b) if the Company (or the surviving entity) sets aside the funds in a trust or other funding arrangement, the actual earnings of such trust or other funding arrangement. 4. As used herein, "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 (1) the power to direct the management of substantially all the cable television systems then owned by the Company in the New York City Metropolitan Area (as hereinafter defined) or (2) after any fiscal year of the Company in which all the systems referred to in -7- clause (1) above shall have contributed in the aggregate less than a majority of the net revenues of the Company and its consolidated subsidiaries, the power to direct the management of the Company or substantially all its assets. Net revenues shall be determined by the independent accountants of the Company in accordance with generally accepted accounting principles consistently applied and certified by such accountants. "New York City Metropolitan Area" means all locations within the following counties: (i) New York, Richmond, Kings, Queens, Bronx, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, Sullivan, Dutchess, and Ulster in New York State; (ii) Hudson, Bergen, Passaic, Sussex, Warren, Hunterdon, Somerset, Union, Morris, Middlesex, Mercer, Monmouth, Essex and Ocean in New Jersey; (iii) Pike in Pennsylvania; and (iv) Fairfield and New Haven in Connecticut. "Surviving entity" means the entity that owns, directly or indirectly, after consummation of any transaction, substantially all the cable television systems owned directly or indirectly by the Company in the New York City Metropolitan Area prior to consummation of such transaction. If any such entity is at least majority-owned, directly or indirectly, by any entity (a "parent entity") which has shares of common stock (or partnership units) traded on a national stock exchange or the over-the-counter market, as reported on NASDAQ, then such parent entity shall be deemed to be the surviving entity provided that if there shall be more than one such parent entity, the parent entity closest to ownership of the Company's cable television systems shall be deemed to be the surviving entity. If in connection with any transaction, a Change of Control or going private transaction occurs and no entity shall own, after consummation of such transaction, substantially all the cable television systems owned by the Company in the New York City Metropolitan Area prior to consummation of such transaction, then, notwithstanding any other provision of this Paragraph 4 to the contrary, there shall not be deemed to be a surviving entity so that the provisions of Paragraph 1(B) shall not be applicable. Ownership of "substantially all" the Company's New York City Metropolitan Area cable television systems shall mean ownership, after consummation of such transaction (or series of related transactions), of an aggregate of at least eighty percent (80%) of the basic subscribers of all the cable television systems owned by the Company and its consolidated subsidiaries in the New York City Metropolitan Area prior to such transaction (or series of related transactions). "Going private transaction" means a transaction described in Rule 13e-3 to the Securities and Exchange Act of 1934. "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 Grant Date) at any time after or within ninety (90) days prior to the Change of Control 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; -8- 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 such event 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 as contemplated by Paragraph 1. "Offer price per share" shall mean, in the case of a tender offer or exchange offer which results in a Change of Control or going private transaction (an "Offer"), the greater of (i) the highest price per share of common stock paid pursuant to the Offer, or (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of a Change of Control or going private transaction. Any securities or property which are part or all of the consideration paid for shares of common stock in the Offer shall be valued in determining the Offer Price per Share at the higher of (A) the valuation placed on such securities or property by the Company, person or other entity making such offer or (B) the valuation placed on such securities or property by the Committee. "Merger price per share" shall mean, in the case of a merger, consolidation, sale, exchange or other disposition of assets that results in a Change of Control or going private transaction (a "Merger"), the greater of (i) the fixed or formula price for the acquisition of shares of common stock occurring pursuant to the Merger, and (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of such Change of Control or going private transaction. Any securities or property which are part or all of the consideration paid for shares of common stock pursuant to the Merger shall be valued in determining the merger price per share at the higher of (A) the valuation placed on such securities or property by the Company, person or other entity which is a party with the Company to the Merger, or (B) the valuation placed on such securities or property by the Committee. "Acquisition price per share" shall mean the greater of (i) the highest price per share stated on the Schedule 13D or any amendment thereto filed by the holder of twenty percent (20%) or more of the Company's voting power which gives rise to the Change of Control or going private transaction, and (ii) the highest fair market value per share of common stock during the ninety-day period ending on the date of such Change of Control or going private transaction. -9- ANNEX 2 TO RESTRICTED SHARES AGREEMENT WAIVER AND RELEASE In consideration of Cablevision Systems Corporation's (the "Company") offer to accelerate the vesting of my Restricted Shares under Section 3 of the Restricted Shares Agreement dated ___________________ (the "Agreement") between the Company and me, I hereby for myself, and my heirs, agents, executors, successors, assigns and administrators (collectively, the "Related Parties"), knowingly and voluntarily forever waive and release the Company and all of its past and/or present affiliates, directors, officers, employees, fiduciaries, representatives, successors and assigns, whether in their individual or representative capacities (collectively, the "Releasees"), from any and all claims, rights and causes of action whatsoever ("Claims"), in law or in equity, whether known or unknown, asserted or unasserted, suspected or unsuspected, that I or any Related Party ever had, may have in the future or have now in connection with or arising from or in any way related to my employment relationship with the Company or any of its Affiliates, or termination of my employment relationship with the Company or any of its Affiliates including, without limitation: o any Claims under Federal or state law, regulation or decision (including those under the Age Discrimination in Employment Act, 29 U.S.C. ss.ss.621 et. seq. (the "ADEA"), the Older Workers Benefit Protection Act, 29 U.S.C. ss.626 (f)(1) (the "OWBPA"), Title VII of the Civil Rights Act of 1991, the Americans with Disabilities Act, 42 U.S.C. ss.ss.12101-12213, the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act, and any other similar or related law, regulation or decision relating to or dealing with discrimination), or o any Claims for punitive damages, attorney's fees, expenses and costs of litigation. -10- Nothing herein shall be construed to affect the right of the Equal Employment Opportunity Commission ("EEOC") to enforce the ADEA or to interfere with the protected right to file a charge or participate in an EEOC investigation of proceeding. This Waiver and Release is intended to comply with the provisions of the OWBPA. By execution of this Waiver and Release, I hereby expressly waive any and all Claims under the OWBPA and hereby acknowledge that: (a) My waiver of rights or Claims arising under the ADEA is in writing and is understood by me; (b) The waiver of my rights or Claims existing under the ADEA is in exchange for the Company having entered into the Agreement; (c) The Company advised me in writing to consult with attorneys of my choosing prior to executing this Waiver and Release and I have in fact done so; (d) I have been advised by the Company that I am entitled to revoke this Waiver and Release within seven (7) days after its execution and that this Waiver and Release shall not become effective or enforceable until the aforesaid seven (7) day revocation period has expired; and (e) I hereby acknowledge that this Waiver and Release is not requested in connection with any existing incentive or other employment termination program. I hereby represent and warrant to the Releasees that (i) I have carefully read and fully understand all the provisions and effects of this Waiver and Release, (ii) I have had a period of at least twenty-one (21) days within which to consider this Waiver and Release, (iii) I have signed and returned this Waiver and Release knowingly and voluntarily and in the absence of any force or compulsion on the part of any of the Releasees and after having been advised in -11- writing to consult with my attorney and (iv) none of the Releasees has made any representations or warranties concerning either the terms and provisions or effects of this Waiver and Release. I hereby acknowledge that this Waiver and Release shall take effect eight (8) days following its execution (the "Effective Date"), unless revoked by me as hereinafter provided. I hereby further acknowledge that I may revoke this Waiver and Release unilaterally prior to the Effective Date by notifying the Company in writing, of my decision to revoke this Waiver and Release and said notice must be received by the Company no later than the seventh (7th) day following my execution of this Waiver and Release. I understand that if I revoke and cancel this Waiver and Release, I will not be entitled to the accelerated vesting provided by Section 3 of the Agreement. Should any term or provision of this Waiver and Release be declared or be determined by any court to be illegal or invalid, the validity of the remaining terms and provisions, including the release of all Claims, shall not be affected thereby and said illegal or invalid term or provision shall be modified by the court so as to be legal or, if not reasonably feasible, shall be deleted. This Waiver and Release sets forth the entire agreement concerning the release of all Claims by me against the Releasees and may not be modified except by a writing signed by me and the Company. I HEREBY CONFIRM THAT I HAVE CAREFULLY READ THE FOREGOING TERMS AND CONDITIONS OF THIS WAIVER AND RELEASE, THAT I KNOW AND UNDERSTAND THE CONTENTS AND EFFECT OF THIS WAIVER AND RELEASE, THAT I HAVE HAD THE OPPORTUNITY TO CONSULT COUNSEL WITH RESPECT TO THE LEGAL EFFECT OF THIS WAIVER AND RELEASE, AND THAT MY EXECUTION OF THIS WAIVER AND RELEASE IS A VOLUNTARY ACT. -12- I HEREBY VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT I MAY HAVE TO A TRIAL BY JURY IN ANY COURT HAVING JURISDICTION OVER THE MATTER WITH RESPECT TO ANY ACTION, COUNTERCLAIM OR DEFENSE ARISING OUT OF OR RELATING TO THIS WAIVER AND RELEASE. I represent that I have not filed, and will not hereafter file, any Claim against the Company or its Affiliates relating to my employment and/or cessation of my employment with the Company or its Affiliates, or otherwise involving facts that occurred on or prior to the date I sign this Waiver and Release. I understand and agree that if I commence, continue, join in, or in any other manner attempt to assert any Claim released herein against the Company or its Affiliates, or otherwise violate the terms of this Waiver and Release, (i) I will cease to have any right to accelerated vesting of my Restricted Shares pursuant to Section 3 of the Agreement, (ii) to the extent that the Common Shares have already been delivered to me pursuant to the Agreement, I will pay the Company, as liquidated damages and not as a penalty, promptly upon notice, an amount equal to (a) the gain (whether or not realized) attributable to the vesting of the Restricted Shares, plus (b) interest at a rate equal to the lesser of (i) twelve percent (12%) per annum or (ii) the maximum interest rate permitted by applicable law, compounded quarterly, calculated from the date the Restricted Shares vested until the date such payment to the Company is made. Such gain shall be determined as of the date the Restricted Shares vest as the positive difference, if any, between the Fair Market Value of such shares on the vesting date and the par value amount paid for the Restricted Shares, and (iii) I agree to reimburse the Company for all attorneys' fees and expenses incurred by it in defending against such a Claim, provided that the right to receive the foregoing -13- payments is without prejudice to the other rights of the Company hereunder, including any waiver and release of any and all Claims against the Company. I understand and agree that the signing of this Waiver and Release by me does not in any way indicate that I have any viable Claim against the Company or any of its Affiliates, or that the Company or any of its Affiliates admits any liability to me whatsoever. This Waiver and Release shall be binding upon me and my heirs, executors, administrators, personal representatives and assigns, and shall inure to the benefit of the Releasees. This Waiver and Release 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 to the extent not preempted by applicable Federal law. Capitalized terms used but not defined herein have the meanings given to them in the Agreement. IN WITNESS WHEREOF, I executed this Waiver and Release, this ____ day of __________________ . ----------------------------- Employee -14- ANNEX 3 TO RESTRICTED SHARES AGREEMENT SAMPLE FORM FOR ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE OF 1986 Pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, and Treasury Regulation 1.83-2, the undersigned taxpayer hereby elects to include in taxpayer's gross income or alternative minimum taxable income, as the case may be, the excess, if any, of the fair market value of the Property (as hereinafter defined) at the time of transfer over the amount the taxpayer paid for such Property. The following information is furnished in accordance with Treasury Regulation 1.83-2(e). 1. The name, address and taxpayer identification number of the undersigned are as follows: Name of TAXPAYER: SPOUSE: Address: Social Security No. TAXPAYER: SPOUSE: 2. The property with respect to which the election is made (the "Property") is described as follows: restricted shares of Cablevision NY Group Class A Common Stock of Cablevision Systems Corporation (the "Company"). 3. The election is made for the 200__ calendar year with respect to the Property. The date on which the Property was transferred is _________________________. (Grant Date) 4. The Property is subject to the following restrictions: The Property may not be transferred and is subject to continued employment by the taxpayer with the Company through ____________________________________. (Fourth Anniversary of Grant Date) These restrictions lapse upon the satisfaction of certain conditions contained in an agreement entered into by the Company with the taxpayer. 5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such Property is: $__________________. 6. The amount (if any) paid for such Property is $________________. (Par Value) The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described Property. The -15- undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner. Dated:__________________________ ___________________________________ Taxpayer The undersigned spouse of taxpayer joins in this election. Dated:__________________________ ___________________________________ Spouse -16- EX-10.4 5 ex_10-4.txt FORM OF PERFORMANCE AWARD AGMT EXHIBIT 10.4 [TEMPLATE - PERFORMANCE AWARD] [Full Name of Employee] [Address] [Date] Dear [First Name]: Pursuant to the Long-Term Incentive Plan (the "Plan") of Cablevision Systems Corporation (the "Company"), you have been selected by the Compensation Committee of the Board of Directors (as defined in Section 12 below) to receive a contingent cash award (the "Award") of _________________ Dollars ($_______) effective as of the close of business on ____________ (the "Effective Date"). 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. Payment of Award. The Award will be paid to you on __________ (the "Normal Payment Date") provided, that (i) the performance objectives set forth on Annex 1 hereto (the "Objectives") have been attained and (ii) you have remained in the continuous employ of the Company or one of its Affiliates from the Effective Date through the Normal Payment Date. 2. Termination for Cause and Certain Other Employment Termination Events Prior to ___________. If (i) the Company or one of its Affiliates terminates your employment for Cause (as defined below) at any time or (ii) prior to __________ you are no longer employed by the Company or one of its Affiliates for any reason, other than as a result of your death or Disability (as defined below), then you will automatically forfeit all of your rights and interest in the Award regardless of whether the Objectives are ultimately attained. For purposes of this Agreement, "Cause" means, as determined by the Committee, 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, "Disability" shall have the meaning specified in Section 409A(a)(2)(C) of the Internal Revenue Code, as amended (the "IRC"). 3. Employment Termination Events On or After ___________. If on or after ____________ you are no longer employed by the Company or one of its Affiliates for any reason, other than as a result of the termination of your employment by the Company or one of its Affiliates for Cause or by reason of your death or Disability, then on the Normal Payment Date you will be paid the Applicable Portion (as defined below) of the Award provided, that (i) the Objectives are attained; (ii) you have fully complied with all of your obligations set forth in this Agreement, including, without limitation, the covenants set forth in Section 6 below; and (iii) you have executed and delivered to the Company a separation agreement to the Company's satisfaction (which agreement shall include, without limitation, non-disparagement, non-solicitation, confidentiality and further cooperation obligations/restrictions on you, as well as a general release by you of the Company and its Affiliates). For purposes of this Agreement, "Applicable Portion" means a dollar amount equal to ______________ (__/__) of the Award if the effective date of the termination of your employment with the Company or one of its Affiliates is ____________, which amount shall thereafter increase by ____________ (__/__) on the first day of each subsequent calendar month (through and including _____________) that you remained in the continuous employ of the Company or one of its Affiliates through the effective date of the termination of your employment. 4. Disability or Death. If at any time your employment with the Company or one of its Affiliates is terminated as a result of your Disability or death then you or your estate, as the case may be, will receive, promptly following the date of such termination, payment of the Award regardless of whether the Objectives have been attained. 5. Change of Control Event. Notwithstanding anything to the contrary contained in this Agreement, if at any time a Change of Control (as defined below) of the Company occurs, whether or not the Objectives have been attained, you will be entitled to the following: a. If immediately prior to the Change of Control: i you are employed by the Company or one of its Affiliates, you shall be entitled to full payment of the Award in accordance with Section 5(b) below; or ii you are not then employed by the Company or one of its Affiliates, you shall be entitled to full payment of the Applicable Portion of the Award (to the extent your termination of employment qualified for an Applicable Portion under Section 3 above) in accordance with Section 5(b) below. b. If the actual Change of Control event: i 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 applicable amount set forth under Section 5(a) above shall be paid to you by the Company promptly following the Change of Control; or -2- ii 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 applicable amount set forth under Section 5(a) above shall be paid to you by the Company (together with interest thereon pursuant to Section 5(c) below) on the earliest to occur of: (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 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) Normal Payment Date. c. Upon any Change of Control, to the extent any amounts are due to be paid to you at a later date pursuant to Section 5(b)(ii) 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 5(b)(ii) above. 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. 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 (i) the power to direct the management of substantially all the cable television systems then owned by the Company in the New York City Metropolitan Area (as defined below) or (ii) after any fiscal year of the Company in which all the systems referred to in clause (i) above shall have contributed in the aggregate less than a majority of the net revenues of the Company and its consolidated subsidiaries, the power to direct the management of the Company or substantially all its assets. Net revenues shall be determined by the independent accountants of the Company in accordance with generally accepted accounting principles consistently applied and certified by such accountants. For purposes of this Agreement, "New York City Metropolitan Area" means all locations within the following counties: (i) New York, Richmond, Kings, Queens, Bronx, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, Sullivan, Dutchess, and Ulster in New York State; (ii) Hudson, Bergen, Passaic, Sussex, Warren, Hunterdon, Somerset, Union, Morris, -3- Middlesex, Mercer, Monmouth, Essex and Ocean in New Jersey; (iii) Pike in Pennsylvania; and (iv) Fairfield and New Haven in Connecticut. 6. Relationship with Competitive Entities. In the event you shall voluntarily terminate your employment on or after ___________ such that you are no longer employed by the Company or one of its Affiliates or your employment is terminated at any time by the Company or one of its Affiliates for Cause, you shall not become employed by, consult to, or have any interest, directly or indirectly, in any Competitive Entity from the effective date of such termination of your employment through the one-year anniversary of your receipt or scheduled receipt of the Award or any portion thereof. If you shall voluntarily terminate your employment such that you are no longer employed by the Company or one of its Affiliates, and subsequently breach the restriction contained in the immediately preceding sentence, you shall within ten (10) business days thereof pay the Company, as liquidated damages and not as a penalty, an amount equal to (i) the Award or portion paid to you plus (ii) interest at a rate equal to the lesser of (a) twelve percent (12%) per annum or (b) the maximum interest rate permitted by applicable law, compounded quarterly, calculated from the date the Award or portion thereof was paid until the date such payment to the Company is made. For purposes of this Agreement, a "Competitive Entity" shall mean (1) any company that competes (including, without limitation, by means of direct broadcast satellite) with any of the Company's cable television, telephone or on-line data businesses in the New York City Metropolitan Area or that competes (including, without limitation, by means of direct broadcast satellite or a fiber optic or other network) with any of the Company's, programming, cinema, sports or entertainment businesses, nationally or regionally; or (2) any trade or professional association representing any of the companies covered by this Section 6, other than the National Cable Television Association and any state cable television association. Ownership of not more than one percent (1%) of the outstanding stock of any publicly-traded company shall not be a violation of this Section 6. By accepting this Agreement, you understand that the terms and conditions of this Section 6 may limit your ability to earn a livelihood in a business similar to the business of the Company, but nevertheless hereby agree that the restrictions and limitations hereof are reasonable in scope, area and duration, and that the consideration provided under the Plan and this Agreement is sufficient to justify the restrictions and limitations contained in this Section 6. Accordingly, in consideration thereof and in light of your education, skills and abilities, by participating in the Plan, you hereby agree that you will not assert, and it should not be considered, that such provisions are either unreasonable in scope, area or duration, or will prevent you from earning a living, or otherwise are void, voidable or unenforceable or should be voided or held unenforceable. You further understand and hereby agree that the restrictions and limitations contained in this Section 6 are ancillary to, and part of, the Plan and this Agreement, and are reasonably necessary to protect the good will and business interests of the Company. You hereby agree that a breach or threatened breach on your part of the restrictions and limitations contained in this Section 6 will cause such damage to the Company as will be irreparable and for that reason you further agree that the Company shall be entitled as a matter of right to an injunction or other equitable relief out of any court of competent jurisdiction, restraining any further violation of this Section 6 by you. The right to injunction or other -4- equitable relief shall be cumulative and in addition to any and all other remedies the Company may have, including, specifically, recovery of money damages and any other legal or equitable relief available. You hereby waive any requirement for security or the posting of any bond or other surety and proof of damages in connection with any temporary or permanent award of injunctive or other equitable relief. 7. 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 Normal Payment Date. Notwithstanding the foregoing, Section 6 shall survive the termination of this Agreement. 8. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the Award other than to the extent provided in the Plan. 9. Unfunded Obligation. The Plan will at all times be unfunded and, except as set forth in Section 5(c) 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 5(c). 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 5(c). 10. 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. 11. Right of Offset. You hereby agree that if the Company shall owe you any amount (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. You hereby further agree that if you shall owe the Company any amount (the "Employee-Owed Amount") under Section 6 above, then the Company shall have the right to offset the Employee-Owed Amount, to the maximum extent permitted by law, against any amount you may be entitled to receive from the Company or any of its Affiliates under this Agreement or otherwise (including, without limitation, any wages, vacation pay, or other compensation or benefit under any benefit plan or other compensatory arrangement). 12. 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. -5- 13. 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. 14. Amendment. The Committee reserves the right at any time to amend the terms and conditions set forth in this Agreement, except that no such amendment shall materially adversely affect your economic rights under this Agreement 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. 15. Award Subject to the Plan. The Award and all other amounts payable hereunder are subject to the Plan. 16. 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 or renewed), 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 followed by the terms and conditions of this Agreement. 17. 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. 18. 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. 19. 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. 20. 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. 21. 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. 22. 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 -6- 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. 23. 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. 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. 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. CABLEVISION SYSTEMS CORPORATION By: ----------------------------- Name: Title: 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: -7- ANNEX 1 [PERFORMANCE OBJECTIVES] -8- EX-10.5 6 ex_10-5.txt FORM OF DEFERRED COMPENSATION AGMT EXHIBIT 10.5 [TEMPLATE - DEFERRED COMPENSATION] [Full Name of Employee] [Address] [Date] Dear [First Name]: Pursuant to the Long-Term Incentive Plan (the "Plan") of Cablevision Systems Corporation (the "Company"), on ___________ you were selected by the Compensation Committee of the Board of Directors (as more fully described in Section 15, the "Committee") to receive a cash award in the initial base amount of _____________ Dollars ($________) (such amount as increased or decreased in the manner hereinafter provided, the "Award Amount") effective as of ____________ (the "Effective Date"). Capitalized terms used, but not defined, in this agreement (this "Agreement") have the meanings given to them in the Plan. Your receipt of the Award Amount is subject to the terms and conditions set forth below: 1. Annual Award Amount Increases. The Award Amount shall be increased on each of the first ______ (__) anniversary dates of the Effective Date by an amount equal to the lesser of: (i) _______ percent (___%) of your annual base salary as in effect on the applicable anniversary date, and (ii) _______________ Dollars ($________), provided, that you have remained in the continuous employ of the Company or one of its Affiliates through such anniversary dates.(1) 2. Interest. The Award Amount shall earn interest ("Award Interest") at the rate of ____ percent (____%) per annum for the period commencing with the Effective Date and ending on ___________. For each subsequent twelve (12)-month period included within the period ending on ___________, the Award Amount shall earn Award Interest at the average of the one-year LIBOR fixed-rate equivalent for the ten (10) business days immediately preceding the first day (i.e., __________) of such twelve (12)-month period. Award Interest shall be added to the Award Amount on a quarterly basis commencing on _________ and continuing on the first day of each subsequent quarterly period through and including ___________ (the "Last Payment Date" and such first days, the "Interest Payment Dates"). The amount of Award Interest added to the Award Amount on each Interest Payment Date shall be calculated by reference to the Award Amount (including prior Award Interest) outstanding on the day immediately preceding such Interest Payment Date. 3. Award Payment on ___ and ___ Anniversaries. If you have remained in the continuous employ of the Company or one of its Affiliates from the Effective Date through the _____ (___) anniversary thereof, then you will receive, promptly following such anniversary, a cash payment (the "_____ Anniversary Payment") equal to ______ percent (___%) of the Award Amount outstanding on the ____ (___) anniversary of the Effective Date after giving effect to the (1) [As of the date of this grant, your Award Amount is equal to ____________.] increases required to be made to the Award Amount on such anniversary date pursuant to Sections 1 and 2 above. Upon payment to you of the ______ Anniversary Payment, the outstanding Award Amount shall be reduced by the amount of such payment. If you have remained in the continuous employ of the Company or one of its Affiliates from the Effective Date through the Last Payment Date, then you will receive, promptly following such Last Payment Date, a cash payment equal to the balance of the Award Amount outstanding on the Last Payment Date after giving effect to the increases required to be made to the Award Amount on such anniversary date pursuant to Sections 1 and 2 above. 4. Termination for Cause and Certain Other Employment Termination Events Prior to _____________. If (i) your employment is terminated by the Company or one of its Affiliates for Cause (as defined below) at any time or (ii) you do not remain continuously employed with the Company or one of its Affiliates, other than by reason of your death or Disability (as defined below) from the Effective Date through the ______ (___) anniversary of the Effective Date, you will automatically forfeit all of your rights and interest in the Award Amount. For purposes of this Agreement, "Cause" means, as determined by the Committee, 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, "Disability" shall have the meaning specified in Section 409A(a)(2)(C) of the Internal Revenue Code, as amended (the "IRC"). 5. Certain Employment Termination Events On or After ___________. a. If your employment with the Company and any of its Affiliates terminates at any time during the period from and including the _______ (___) anniversary through and including the _______ (___) anniversary of the Effective Date for any reason other than as a result of a termination by the Company or one of its Affiliates for Cause or by reason of your death or Disability, then you will receive, promptly following the effective date of your termination of employment, a cash payment equal to the product obtained by multiplying the (i) Applicable Ratio (as defined in Section 5(c) below) by (ii) Award Amount outstanding on the effective date of your termination. b. If your employment with the Company and any of its Affiliates terminates at any time after the _______ (___) anniversary of the Effective Date for any reason other than as a result of a termination of your employment by the Company or one of its Affiliates for Cause or by reason of your death or Disability, then you will receive, promptly following the effective date of your termination of employment, a cash payment (the "Subject Payment") calculated by first adding the (i) Award Amount outstanding on the effective date of your termination of employment and (ii) _______ Anniversary Payment that you received. The sum obtained pursuant to the immediately preceding sentence shall then be multiplied by the Applicable Ratio on such date. The _______ Anniversary Payment shall then be subtracted from the product obtained pursuant to the immediately preceding sentence to obtain the amount of the Subject -2- Payment. For purposes of illustration, the foregoing procedure for calculating the amount of the Subject Payment can be expressed formulaically as follows: Subject Payment = [Applicable Ratio x (Award Amount + ______ Anniversary Amount)] - _____ Anniversary Amount. c. For purposes of this Agreement, "Applicable Ratio" means ________ (_/_) if the effective date of the termination of your employment with the Company or any of its Affiliate is __________, which fraction shall thereafter increase by __________ (__) on the first day of each subsequent calendar month (through and including the Last Payment Date) that you remained in the continuous employ of the Company or one of its Affiliates through the effective date of the termination of your employment. d. Your receipt of any amount payable to you under this Section 5 shall be subject to your execution and the effectiveness of a separation agreement to the Company's satisfaction (which agreement shall include, without limitation, non-disparagement, non-solicitation, confidentiality and further cooperation obligations/restrictions on you, as well as a general release by you of the Company and its Affiliates). 6. Disability or Death. If at any time your employment with the Company or one of its Affiliates is terminated as a result of your Disability or death then you or your estate, as the case may be, will receive, promptly following the date of such termination, the Award Amount then outstanding on such date. 7. Change in Control Event. a. Notwithstanding anything to the contrary contained in this Agreement, if at any time a Change in Control (as defined below) of the Company occurs and immediately prior to the Change in Control you are employed by the Company or one of its Affiliates, you shall be entitled to the Award Amount outstanding on the date of the Change in Control (the "CIC Amount") in accordance with Section 7(b) below. b. If the actual Change in Control event: i is a permissible distribution event under Section 409A of the IRC or payment of the CIC Amount 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 CIC Amount), then the CIC Amount outstanding on the date of the Change in Control shall be paid to you by the Company promptly following the Change in Control; or ii is not a permissible distribution event under Section 409A of the IRC and payment of the CIC Amount promptly upon such event is not otherwise permissible under Section 409A of the IRC, then the CIC Amount or portion thereof shall be paid to you by the Company (together with interest thereon pursuant to Section 7(c) below) on the earliest to occur of: -3- (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 by one of such entities for "Cause" (subject to Section 8 below if you are determined by the Company to be a "specified employee" within the meaning of Section 409A of the IRC); (2) any other date on which such payment or portion thereof would be a permissible distribution under Section 409A of the IRC; (3) if the Change in Control occurred on or prior to the ______ (___) anniversary of the Effective Date, _____ percent (__%) of the CIC Amount shall be paid to you on such ______ (___) anniversary date, with the unpaid balance (together with interest thereon pursuant to Section 7(c) below) paid on the Last Payment Date; or (4) the Last Payment Date. c. Upon any Change in Control, to the extent any amounts are due to be paid to you at a later date pursuant to Section 7(b)(ii) above, the Company shall promptly following the Change in 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 7(b)(ii) above. 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 in Control and shall adjust annually based on the average of such rate for the ten business days prior to each anniversary of the Change in Control. For purposes of this Agreement, "Change in 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 (i) the power to direct the management of substantially all the cable television systems then owned by the Company in the New York City Metropolitan Area (as defined below) or (ii) after any fiscal year of the Company in which all the systems referred to in clause (i) above shall have contributed in the aggregate less than a majority of the net revenues of the Company and its consolidated subsidiaries, the power to direct the management of the Company or substantially all its assets. Net revenues shall be determined by the independent accountants of the Company in accordance with generally accepted accounting principles consistently applied and certified by such accountants. For purposes of this Agreement, "New York City Metropolitan Area" means all locations within the following counties: (i) New York, Richmond, Kings, Queens, Bronx, Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, Sullivan, Dutchess, and Ulster in New York State; (ii) Hudson, Bergen, Passaic, Sussex, Warren, Hunterdon, Somerset, Union, Morris, Middlesex, Mercer, Monmouth, Essex and Ocean in New Jersey; (iii) Pike in Pennsylvania; and (iv) Fairfield and New Haven in Connecticut. -4- 8. Payment to Specified Employee. Notwithstanding anything to the contrary contained in this Agreement, if the Company determines that you are a "specified employee" within the meaning of Section 409A of the IRC, and that, as a result of such determination, the payment to you of any portion of the Award Amount would be subject to additional taxation, the Company will delay payment of such amount until the earliest permissible date on which the Award Amount may be paid without triggering such additional taxation. 9. Relationship with Competitive Entities. In the event you shall voluntarily terminate your employment on or after the ______ (___) anniversary of the Effective Date such that you are no longer employed by the Company or one of its Affiliates or your employment is terminated at any time by the Company or one of its Affiliates for Cause, you shall not become employed by, consult to, or have any interest, directly or indirectly, in any Competitive Entity from the effective date of such termination of your employment through the one-year anniversary of your most recent receipt or scheduled receipt of any portion of the Award Amount. If you shall voluntarily terminate your employment such that you are no longer employed by the Company or one of its Affiliates, and subsequently breach the restriction contained in the immediately preceding sentence, you shall within ten (10) business days thereof pay the Company, as liquidated damages and not as a penalty, an amount equal to (i) the Award Amount paid to you plus (ii) interest at a rate equal to the lesser of (a) twelve percent (12%) per annum or (b) the maximum interest rate permitted by applicable law, compounded quarterly, calculated from the date the Award Amount or portion thereof was first paid until the date such payment to the Company is made. For purposes of this Agreement, a "Competitive Entity" shall mean (1) any company that competes (including, without limitation, by means of direct broadcast satellite or a fiber optic or other network) with any of the Company's cable television, telephone or on-line data businesses in the New York City Metropolitan Area or that competes with any of the Company's programming, cinema, sports or entertainment businesses, nationally or regionally; or (2) any trade or professional association representing any of the companies covered by this Section 10, other than the National Cable Television Association and any state cable television association. Ownership of not more than one percent (1%) of the outstanding stock of any publicly-traded company shall not be a violation of this Section 9. By accepting this Agreement, you understand that the terms and conditions of this Section 9 may limit your ability to earn a livelihood in a business similar to the business of the Company, but nevertheless hereby agree that the restrictions and limitations hereof are reasonable in scope, area and duration, and that the consideration provided under the Plan and this Agreement is sufficient to justify the restrictions and limitations contained in this Section 9. Accordingly, in consideration thereof and in light of your education, skills and abilities, by participating in the Plan, you hereby agree that you will not assert, and it should not be considered, that such provisions are either unreasonable in scope, area or duration, or will prevent you from earning a living, or otherwise are void, voidable or unenforceable or should be voided or held unenforceable. You further understand and hereby agree that the restrictions and limitations contained in this Section 9 are ancillary to, and part of, the Plan and this Agreement, and are reasonably necessary to protect the good will and business interests of the Company. -5- You hereby agree that a breach or threatened breach on your part of the restrictions and limitations contained in this Section 9 will cause such damage to the Company as will be irreparable and for that reason you further agree that the Company shall be entitled as a matter of right to an injunction or other equitable relief out of any court of competent jurisdiction, restraining any further violation of this Section 9 by you. The right to injunction or other equitable relief shall be cumulative and in addition to any and all other remedies the Company may have, including, specifically, recovery of money damages and any other legal or equitable relief available. You hereby waive any requirement for security or the posting of any bond or other surety and proof of damages in connection with any temporary or permanent award of injunctive or other equitable relief. 10. Termination. Except for a right which has accrued and vested to receive a payment on account of the Award, this Agreement shall automatically terminate and be of no further force and effect on the Last Payment Date. Notwithstanding the foregoing, Section 9 shall survive the termination of this Agreement. 11. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the Award Amount, other than to the extent provided in the Plan. 12. Unfunded Obligation. The Plan will at all times be unfunded and, except as set forth in Section 7(c) 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 7(c). 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 7(c). 13. 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 Amount. 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 Amount, 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. 14. Right of Offset. You hereby agree that if the Company shall owe you any amount (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. You hereby further agree that if you shall owe the Company any amount (the "Participant-Owed Amount") under Section 9 of this Agreement, then the Company shall have the right to offset the Participant-Owed Amount, to the maximum extent permitted by law, against any amount you may be entitled to receive from the Company or its Affiliates under this Agreement or otherwise (including, without limitation, any wages, vacation pay, or other compensation or benefit under any benefit plan or other compensatory arrangement). -6- 15. 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. 16. 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. 17. Amendment. The Committee reserves the right at any time to amend the terms and conditions set forth in this Agreement, except that no such amendment shall materially adversely affect your economic rights under this Agreement 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. 18. Award Amount Subject to the Plan. The Award Amount is subject to the Plan. 19. 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 or renewed), this Agreement and the Plan constitute the entire understanding and agreement of you and the Company with respect to the Award Amount 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 Amount 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 followed by the terms and conditions of this Agreement. 20. 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. 21. 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. 22. 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. 23. 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. 24. 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. 25. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be considered in agreement that the Award Amount shall be considered special incentive -7- 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 Amount 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. 26. 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. 27. 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. 28. Effective Date. Upon execution by you, this Agreement shall be effective from and as of the Effective Date. 29. 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. CABLEVISION SYSTEMS CORPORATION By: ----------------------------- Name: Title: 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: -8- -----END PRIVACY-ENHANCED MESSAGE-----