EQUITY AND LONG-TERM INCENTIVE PLANS

Cablevision's Equity Plans

In April 2006, Cablevision's Board of Directors approved the Cablevision Systems Corporation 2006 Employee Stock Plan and the Cablevision Systems Corporation 2006 Stock Plan for Non-Employee Directors, which was approved by Cablevision's stockholders at its annual stockholders meeting on May 18, 2006.

Under the 2006 Employee Stock Plan, Cablevision is authorized to grant incentive stock options, nonqualified stock options, restricted shares, restricted stock units, stock appreciation rights and other equity-based awards. Cablevision may grant awards for up to 46,000,000 shares of CNYG Class A common stock (subject to certain adjustments). Options (including performance based options) and stock appreciation rights under the 2006 Employee Stock Plan must be granted with an exercise price of not less than the fair market value of a share of CNYG Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the 2006 Employee Stock Plan, including vesting and exercisability, are determined by the compensation committee of the Board of Directors and may be based upon performance criteria.

Under the 2006 Stock Plan for Non-Employee Directors, Cablevision is authorized to grant nonqualified stock options, restricted stock units and other equity-based awards. Cablevision may grant awards for up to 1,000,000 shares of CNYG Class A common stock (subject to certain adjustments) under this plan. Options under this plan must be granted with an exercise price of not less than the fair market value of a share of CNYG Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the 2006 Stock Plan for Non-Employee Directors, including vesting and exercisability, are determined by the compensation committee. Unless otherwise provided in an applicable award agreement, options granted under this plan will be fully vested and exercisable, and restricted stock units granted under this plan will be fully vested, upon the date of grant. Unless otherwise determined by the compensation committee, on the date of each annual meeting of Cablevision's stockholders, each non-employee director will receive a number of restricted stock units for the number of shares of common stock equal to $150 divided by the fair value of a share of CNYG Class A stock based on the closing price on the date of grant. In 2014 and 2013, Cablevision granted its non-employee directors an aggregate of 66,421 and 71,200 restricted stock units, respectively, which vested on the date of grant. Total non-employee director restricted stock units outstanding as of December 31, 2014 were 434,596.

Previously, Cablevision had an employee stock plan ("1996 Employee Stock Plan") under which it was authorized to grant incentive stock options, nonqualified stock options, restricted shares, restricted stock units, stock appreciation rights, and bonus awards and a non-employee director stock plan ("1996 Non-Employee Director Stock Plan") under which it was authorized to grant options and restricted stock units. The 1996 Employee Stock Plan expired in February 2006 and the 1996 Non-Employee Director Stock Plan expired in May 2006. Outstanding options issued pursuant to these plans have expiration dates through 2015.

Options and stock appreciation rights have typically been scheduled to vest over three years in 33-1/3% annual increments and expire 10 years from the grant date. Restricted shares have typically been subject to three or four year cliff vesting. Performance based options granted in 2012 vested over a two year period in 50% annual increments and expire 10 years from the date of grant. Performance based restricted stock awards are subject to three year cliff vesting subject to achievement of performance criteria. Cablevision does not have any stock appreciation rights outstanding at December 31, 2014 and 2013.

Since share-based compensation expense is based on awards that are ultimately expected to vest, such compensation (which includes options, restricted stock, and stock appreciation rights) for the years ended December 31, 2014, 2013 and 2012 has been reduced for estimated forfeitures. Forfeitures were estimated based primarily on historical experience.

The following table presents the share-based compensation expense including expenses related to AMC Networks share-based awards held by Company employees, recognized by the Company as selling, general and administrative expense for the years ended December 31, 2014, 2013 and 2012:



	Years Ended December 31,
	2014		2013		2012
Stock options (including performance based options)	$	7,573	$	17,560	$	29,849
Restricted shares	36,411		35,155		30,797
Share-based compensation related to equity classified awards	43,984		52,715		60,646

Stock appreciation rights	—		—		59
Total share-based compensation	$	43,984	$	52,715	$	60,705

An income tax benefit of $17,801, $21,682 and $24,747 was recognized in continuing operations resulting from share-based compensation expense for the years ended December 31, 2014, 2013 and 2012, respectively.

Cablevision uses the 'with-and-without' approach to determine the recognition and measurement of excess tax benefits. Cash flows resulting from excess tax benefits are classified as cash flows from financing activities. Excess tax benefits are realized tax benefits from tax deductions for options exercised and restricted shares issued in excess of the deferred tax asset attributable to share-based compensation expense for such awards. Cablevision realized an excess tax benefit of $336 and $1,280 for the years ended December 31, 2014 and 2013, respectively, and did not realize excess tax benefit for the year ended December 31, 2012. CSC Holdings recorded an excess tax benefit of $4,978, $46,164 and $61,434 for the years ended December 31, 2014, 2013 and 2012, respectively.

Cash received from stock option exercises for the years ended December 31, 2014, 2013 and 2012 was $55,355, $18,120 and $18,722, respectively.

Valuation Assumptions - Stock Options

Cablevision calculates the fair value of each option award on the date of grant. Cablevision's computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards and vesting schedules, or by using the simplified method (the average of the vesting period and option term), if applicable. The interest rate for periods within the contractual life of the stock option is based on interest yields for U.S. Treasury instruments in effect at the time of grant. Cablevision's computation of expected volatility is based on historical volatility of its common stock.

In the first quarter of 2014 and 2013, Cablevision granted options that are scheduled to cliff vest in three years and expire 10 years from the date of grant. In the first quarter of 2012, Cablevision granted options that vested over a two year period in 50% annual increments based on the achievement of certain performance criteria and expire 10 years from the date of grant. Cablevision calculated the fair value of the option award on the date of grant using the Black-Scholes option pricing model. Cablevision's computation of expected life was determined based on the simplified method (the average of the vesting period and option term) due to the Company's lack of recent historical data for similar awards. Additionally, these options were issued subsequent to a change in Cablevision's structure in connection with the AMC Networks Distribution and the MSG Distribution (whereby Cablevision distributed to its stockholders all of the outstanding common stock of The Madison Square Garden Company ("Madison Square Garden"), a company which owns the sports, entertainment and media businesses previously owned and operated by the Company's Madison Square Garden segment). Cablevision's computation of expected volatility is based on historical volatility of its common stock.

The following assumptions were used to calculate the fair values of stock option awards granted in the first quarter of 2014, 2013 and 2012:



	2014			2013			2012

Risk-free interest rate	2.12		%	1.25		%	1.14		%

Expected life (in years)	6.5			6.5			5.75

Dividend yield	3.79		%	3.86		%	3.52		%

Volatility	42.80		%	42.31		%	43.20		%

Grant date fair value	$	5.27		$	3.96		$	4.06

Share-Based Payment Award Activity

The following table summarizes activity relating to Company employees who held Cablevision stock options for the year ended December 31, 2014:



	Shares Under Option
	Time Vesting Options		Performance Based Vesting Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (a)
Balance, December 31, 2013	4,514,479		10,639,125		$	13.20	7.21	$	71,823
Granted	2,000,000		—		17.64
Exercised	(1,416,813	)	(3,005,625	)	11.74

Balance, December 31, 2014	5,097,666		7,633,500		$	14.41	7.17	$	79,347

Options exercisable at December 31, 2014	1,097,666		7,633,500		$	13.76	6.48	$	60,027

Options expected to vest in the future	4,000,000		—		$	15.81	8.68	$	19,320


(a)	The aggregate intrinsic value is calculated as the difference between (i) the exercise price of the underlying award and (ii) the quoted price of CNYG Class A common stock on December 31, 2014 or December 31, 2013, as indicated, and December 31, 2014 in the case of the options exercisable and options expected to vest in the future.

In addition, as of December 31, 2014, AMC Networks and Madison Square Garden employees held a total of 143,666 Cablevision stock options. These stock options are not expensed by the Company, however such stock options may have a dilutive effect on net income per share attributable to Cablevision stockholders.

For the year ended December 31, 2014, the aggregate intrinsic value of options exercised under Cablevision's stock option plans was $34,409 determined as of the date of option exercise, as applicable. When an option is exercised, Cablevision issues new shares of stock.

The following table summarizes activity relating to Company employees who held Cablevision restricted shares for the year ended December 31, 2014:



	Number of Restricted Shares		Number of Performance Restricted Shares		Weighted Average Fair Value Per Share at Date of Grant
Unvested award balance, December 31, 2013	4,670,513		1,534,700		$	15.89
Granted	2,164,270		737,200		17.66
Vested	(652,556	)	(236,600	)	25.94
Awards forfeited	(867,357	)	—		15.16

Unvested award balance, December 31, 2014	5,314,870		2,035,300		15.46

During the year ended December 31, 2014, 889,156 Cablevision restricted shares issued to employees of the Company vested. To fulfill the employees' statutory minimum tax withholding obligations for the applicable income and other employment taxes, 365,130 of these shares, with an aggregate value of $6,608, were surrendered to the Company. During the year ended December 31, 2013, 2,073,066 Cablevision restricted shares issued to employees of the Company, AMC Networks and Madison Square Garden vested. To fulfill the employees' statutory minimum tax withholding obligations for the applicable income and other employment taxes 865,307 of these shares, with an aggregate value of $12,262 were surrendered to the Company. These acquired shares have been classified as treasury stock.

As of December 31, 2014, there was $55,529 of total unrecognized compensation cost related to Cablevision's unvested options and restricted shares granted under Cablevision's stock plans. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1 year.

Long-Term Incentive Plans

In April 2006, Cablevision's Board of Directors approved the Cablevision Systems Corporation 2006 Cash Incentive Plan, which was approved by Cablevision's stockholders at its annual stockholders meeting in May 2006.

In connection with the long-term incentive awards outstanding, the Company has recorded expenses of $43,892, $24,596 and $10,167 for the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014, the Company had accrued $42,653 for performance based awards for which the performance criteria had not yet been met as of December 31, 2014 as such awards are based on achievement of certain performance criteria through December 31, 2016. The Company has accrued the amount that it currently believes will ultimately be paid based upon the performance criteria established for these performance based awards. In 2012, the Company reversed certain accruals related to awards with performance criteria through 2013 that was not expected to be achieved.