DEF 14A 1 d325950ddef14a.htm DEFINITIVE PROXY STATEMENT Definitive Proxy Statement
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

(Rule 14a-101)

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(AMENDMENT NO.    )

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

 

¨   Preliminary Proxy Statement
¨   Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x   Definitive Proxy Statement
¨   Definitive Additional Materials
¨   Soliciting Material Pursuant to §240.14a-12

CABLEVISION SYSTEMS CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x   No fee required.
¨   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

 

   

 

  (2)  

Aggregate number of securities to which transaction applies:

 

 

   

 

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

   

 

  (4)  

Proposed maximum aggregate value of transaction:

 

 

   

 

  (5)   Total fee paid:
   
   

 

¨   Fee paid previously with preliminary materials.
¨   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount previously paid:

 

 

   

 

  (2)  

Form, Schedule or Registration Statement No.:

 

 

   

 

  (3)  

Filing Party:

 

 

   

 

  (4)  

Date Filed:

 

 

   

 

 

 

 


Table of Contents

LOGO

Notice of Annual Meeting and

Proxy Statement

Dear Stockholder:

You are cordially invited to attend our annual meeting of stockholders at 10:00 a.m. on May 18, 2012 at our corporate headquarters building at 1111 Stewart Avenue, Bethpage, New York.

In addition to the matters described in the attached proxy statement, we will report on the Company’s activities during 2011. You will have an opportunity to ask questions and to meet your directors and executives.

We are continuing to take advantage of the Securities and Exchange Commission rules allowing companies to furnish proxy materials to their stockholders on the Internet. We believe the e-proxy process expedites stockholders’ receipt of proxy materials, and lowers the costs and reduces the environmental impact of our annual meeting.

I look forward to seeing you at the meeting. Your vote is important to us. Stockholders may vote by using a toll-free telephone number or over the Internet. Also, if you receive a paper copy of the proxy card by mail, you may sign and return the proxy card in the envelope provided.

Sincerely yours,

 

LOGO

Charles F. Dolan

Chairman

April 5, 2012

Cablevision Systems Corporation, 1111 Stewart Avenue, Bethpage, NY 11714-3581


Table of Contents

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF CABLEVISION

SYSTEMS CORPORATION

Time:

10:00 a.m., Eastern Time

Date:

May 18, 2012

Place:

Cablevision Systems Corporation

Corporate Headquarters

1111 Stewart Avenue

Bethpage, New York

Purpose:

 

   

  Elect directors

 

   

  Ratify appointment of independent registered public accounting firm

 

   

  Conduct other business if properly raised

Only stockholders of record on March 28, 2012 may vote at the meeting.

Your vote is important. We urge you to vote as soon as possible by telephone or over the Internet. If you receive a copy of the proxy card by mail, you may sign and return the proxy card in the envelope provided.

Important Notice: Our 2011 Annual Report on Form 10-K and the 2012 Proxy Statement are available at www.cablevision.com/investor/proxy.jsp

 

LOGO

Victoria D. Salhus

Senior Vice President,

Deputy General Counsel

and Secretary

April 5, 2012


Table of Contents
Table of Contents       

General Information

    1   

Proposal 1 — Election of Directors

    3   

Board of Directors and Committees

    9   

Director Independence

    10   

Committees

    11   

Director Compensation

    16   

Director Compensation Table

    18   

Proposal 2  — Ratification of Appointment of Independent Registered Public Accounting Firm

    19   

Report of Audit Committee

    20   

Executive Compensation

    21   

Compensation Discussion and Analysis

    21   

Overview of Executive Compensation Program

    21   

Executive Compensation Program Objectives and Philosophy

    22   

Compensation Practices and Policies

    24   

Elements of In-Service Compensation

    27   

Post-Termination Compensation

    38   

Tax Deductibility of Compensation

    39   

Report of Compensation Committee

    40   

Executive Compensation Tables

    41   

Summary Compensation Table

    41   

Grants of Plan-Based Awards

    45   

Outstanding Equity Awards at Fiscal Year-End

    47   

Option Exercises and Stock Vested

    49   

Pension Benefits

    50   

Nonqualified Deferred Compensation

    53   

Employment Agreements

    54   

Termination and Severance

    65   

Equity Compensation Plan Information

    74   

Our Executive Officers

    75   

Related Party Policy and Certain Transactions

    76   

Conflicts of Interest

    90   

Stock Ownership Table

    92   

Other Matters

    106   


Table of Contents

Proxy Statement 2012 - Cablevision

 

GENERAL INFORMATION

Voting Rights

Holders of Cablevision NY Group Class A common stock (“Class A common stock”) and Cablevision NY Group Class B common stock (“Class B common stock”), as recorded in our stock register on March 28, 2012, may vote at the meeting. On March 28, 2012, there were 218,810,866 shares of Class A common stock and 54,137,673 shares of Class B common stock outstanding. Each share of Class A common stock has one vote per share and holders will be voting for the election of five candidates to the Board of Directors. Each share of Class B common stock has ten votes per share and holders will be voting for the election of twelve candidates to the Board of Directors. As a result of their ownership of Class B common stock, our Chairman, Charles F. Dolan, certain members of his family and related family entities, have the power to elect all of the directors to be elected by the holders of Class B common stock and to approve Proposal 2 regardless of how other shares are voted.

How to vote

As permitted by rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders (other than those who previously requested electronic or paper delivery). All stockholders will have the ability to access the proxy materials on a website referred to in the Notice or request to receive a printed set of the proxy materials. There is no charge to you for requesting a copy of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a printed set of proxy materials may be found in the Notice. In addition, stockholders may request to receive future proxy materials in printed form by mail or electronically by email on an ongoing basis.

You may vote in person at the meeting or by proxy. You may vote by telephone or over the Internet. Also, if you receive a paper copy of the proxy card by mail, you may sign and return the proxy card in the envelope provided. We recommend you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting.

How proxies work

Cablevision Systems Corporation’s (the “Company”) Board of Directors (the “Board”) is asking for your proxy. If you submit a proxy, but do not specify how to vote, the Company representatives named in the proxy will vote your shares in favor of the director nominees identified in this proxy statement and in favor of Proposal 2. The Notice contains instructions for telephone and Internet voting. Also, if you receive a paper copy of the proxy card by mail, you may sign and return the proxy card in the envelope provided. Whichever method you use, giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct. You may vote for all, some, or none of our director candidates. You may also vote for or against Proposal 2 or abstain from voting.

 

1


Table of Contents

Proxy Statement 2012 - Cablevision

 

You may receive more than one Notice or proxy or voting card depending on how you hold your shares. If you hold shares through another party, such as a bank or brokerage firm, you may receive material from them asking how you want to vote.

Revoking a proxy

You may revoke your proxy before it is voted by submitting a new proxy with a later date; by voting in person at the meeting; granting a subsequent proxy through the Internet or telephone or by notifying the Company’s Investor Relations department in writing at Cablevision Systems Corporation, Investor Relations, 1111 Stewart Avenue, Bethpage, New York 11714, so that it is received prior to May 17, 2012.

Quorum

In order to carry on the business of the meeting, we must have a quorum. This means that at least a majority of the outstanding votes represented by outstanding shares eligible to vote must be represented at the meeting, either by proxy or in person. If voting on a particular action is by class, a majority of the votes represented by the outstanding shares of such class constitutes a quorum for that action.

Votes needed

Election of directors by the holders of Class A common stock (“Class A directors”) requires the affirmative vote of a plurality of votes cast by holders of Class A common stock. Election of directors by the holders of Class B common stock (“Class B directors”) requires the affirmative vote of a plurality of votes cast by holders of Class B common stock. Approval of Proposal 2 requires the favorable vote of a majority of the votes cast by the holders of Class A common stock and holders of Class B common stock, voting together as a single class. Abstentions and broker non-votes count for quorum purposes. They will not affect Proposal 2. Broker non-votes occur when a bank, brokerage firm or other nominee is not permitted to vote on a particular matter without instructions from the owner of the shares and no instruction is received.

Please note that the rules regarding how brokers may vote your shares have changed. Brokers may no longer vote your shares in the election of directors or on executive compensation matters unless you provide instructions as to how to vote. We encourage you to provide instructions to your broker regarding the voting of your shares.

Important Notice

All meeting attendees may be asked to present a valid, government-issued photo identification card (federal, state or local), such as a driver’s license or passport, before entering the annual meeting of stockholders. In addition, video and audio recording devices and other electronic devices will not be permitted at the meeting and attendees will be subject to security inspections.

 

2


Table of Contents

Proxy Statement 2012 - Cablevision

 

Solicitation

These proxy materials are first being sent to stockholders on April 5, 2012. In addition to this mailing, the Company’s employees may solicit proxies personally, electronically or by telephone. The Company pays the costs of soliciting proxies. We also reimburse brokers and other nominees for their expenses in sending these materials to you and obtaining your voting instructions. The Company has also retained D. F. King & Co., Inc. to assist in the solicitation of proxies at a fee estimated at $15,000 plus reasonable out-of-pocket expenses.

PROPOSAL 1

Election of directors

The Board has nominated the seventeen director candidates named below all of whom currently serve as our directors. Of the seventeen nominees for director, twelve are to be elected by the Class B stockholders and five are to be elected by the Class A stockholders. All of the directors are elected for a one year term.

Each current director was elected by the stockholders at the last annual meeting.

The Company representatives named in the proxy intend to vote for the election of each of the director nominees below, unless you indicate on your proxy that your vote should be withheld from any or all of the nominees.

If a Class A director nominee becomes unavailable before the election, the Company representatives named in the Class A proxy would be authorized to vote for a replacement Class A director nominee if the Board names one. If a Class B director nominee becomes unavailable before the election, the Company representatives named in the Class B proxy would be authorized to vote for a replacement Class B director nominee if the Board names one.

Information on each of our nominees is given below.

The Board unanimously recommends you vote FOR each of the following candidates:

Directors to be elected by Class A Stockholders

 

 

ZACHARY W. CARTER, 62, Director of the Company since 2006. Partner at the law firm of Dorsey & Whitney LLP, in New York, New York since 1999. Prior to that time, Mr. Carter’s career in public service included serving as United States Attorney for the Eastern District of New York from 1993 to 1999. Mr. Carter is a director of Marsh & McLennan Companies, Inc.

In light of Mr. Carter’s experience as a practicing attorney, his government service, his service as a director of another public company, as well as the knowledge and experience he

 

3


Table of Contents

Proxy Statement 2012 - Cablevision

 

has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

 

 

 

THOMAS V. REIFENHEISER, 76, Director of the Company since 2002. Mr. Reifenheiser retired as a Managing Director of JP Morgan Chase, overseeing the Global Media and Telecommunications Division in September 2000 after 38 years with JP Morgan Chase and its predecessors. Mr. Reifenheiser is a director of Lamar Advertising Company. During the past five years, Mr. Reifenheiser was a director of Citadel Broadcasting Corporation and Mediacom Communications Corporation.

In light of Mr. Reifenheiser’s experience as a commercial banker to media and telecommunications companies, his service as a director of other public companies, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

 

 

 

VICE ADMIRAL JOHN R. RYAN USN (RET.), 66, Director of the Company since 2002. President and Chief Executive Officer of the Center for Creative Leadership in Greensboro, North Carolina since June 2007. He was Chancellor of the State University of New York from June 2005 to June 2007. He was President of the State University of New York Maritime College from June 2002 to June 2005, Interim President of State University at Albany from February 2004 to February 2005, and Superintendent of the United States Naval Academy from June 1998 to June 2002. Vice Admiral Ryan’s military career included positions as Commander of the Maritime Surveillance and Reconnaissance Force, US Sixth Fleet/Commander, Fleet Air Mediterranean/Commander, Maritime Air Forces, Mediterranean until his retirement from the U.S. Navy in July 2002. Vice Admiral Ryan is the lead director of CIT Group Inc.

In light of Vice Admiral Ryan’s experience in military service, his leadership positions at major universities, his experience as the chief executive officer of another company, his service as the lead director of another public company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

 

 

 

VINCENT TESE, 69, Director of the Company since 1996. Mr. Tese served as Chairman and Chief Executive Officer of the New York State Urban Development Corporation from 1985 to 1987 and as Director of Economic Development for New York State from 1987 to December 1994. Mr. Tese is Executive Chairman of Bond Street Holdings LLC and Chairman of Florida Community Bank and is a director of Intercontinental Exchange, Inc., ICE Clear Credit LLC, Mack-Cali Realty Corporation, The Madison Square Garden

 

4


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

Company, Municipal Art Society, and Wireless Cable International, Inc. and a trustee of New York Presbyterian Hospital and New York University School of Law. During the past five years, Mr. Tese was a director of Gabelli Asset Management, National Wireless Holdings, Inc., The Bear Stearns Companies, Inc, Bowne & Company, Inc., Cabrini Mission Society, Catholic Guardian Society, Custodial Trust Co, Magfusion, Inc., NRDC Acquisition Corp., GGCP, Inc., Retail Opportunity Investments Corp. and Xanboo Inc.

In light of Mr. Tese’s experience as the chief executive officer of the New York State Urban Development Corporation, his government service, his experience as the executive chairman of private companies, his service as a director of other public companies, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

 

 

 

DR. LEONARD TOW, 83, Director of the Company since 2005. Chief Executive Officer of New Century Holdings LLC, an outdoor advertising company, since January 2005. Dr. Tow is a director of AMC Networks Inc., and was a director of Citizens Communications Company from 1989 to September 2004. Chairman and Chief Executive Officer of Citizens Communications Company from 1990 to September 2004.

In light of Dr. Tow’s experience as a founder and chief executive officer of a major cable television company, his experience as the chief executive officer of a private company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class A stockholders, has concluded that he should be reelected to the Board.

Directors to be elected by Class B Stockholders

 

 

RAND V. ARASKOG, 80, Director of the Company since 2005. Self-employed as a private investor as principal in RVA Investments since March 1998. During the past five years, Mr. Araskog was a director of ITT Educational Services, Inc., Rayonier, Inc. and International Steel Group, Inc.

In light of Mr. Araskog’s experience as the chief executive officer of a public company and as a principal in a private investment company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.

 

 

 

EDWARD C. ATWOOD, 76, Director of the Company since May 2011. Vice President — Multimedia Services of the Company since 1998. Mr. Atwood is the brother-in-law of Charles F. Dolan and the uncle of James L. Dolan, Kathleen M. Dolan, Patrick F. Dolan, Deborah Dolan-Sweeney, Thomas C. Dolan and Marianne Dolan Weber.

 

5


Table of Contents

Proxy Statement 2012 - Cablevision

 

In light of Mr. Atwood’s experience in various positions with Cablevision since 1982, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be elected to the Board.

 

 

 

FRANK J. BIONDI, 67, Director of the Company since 2005. Senior Managing Director of WaterView Advisors LLC since June 1999. Mr. Biondi is a director of Hasbro, Inc., Seagate Technology, Amgen, Inc. and RealD Inc. During the past five years, Mr. Biondi was a director of Harrah’s Entertainment Inc., The Bank of New York Mellon Corporation and Yahoo Inc.

In light of Mr. Biondi’s experience as a senior executive of other companies and as a managing director of a private company, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.

 

 

 

CHARLES F. DOLAN, 85, Director of the Company since 1985. Chairman of the Company since 1985. Executive Chairman of AMC Networks Inc. since June 2011. Chief Executive Officer of the Company from 1985 to October 1995. Founded and acted as the General Partner of the Company’s predecessor from 1973 to 1985. Established Manhattan Cable Television in 1961 and Home Box Office in 1971. He serves as a director of AMC Networks Inc. and The Madison Square Garden Company. Charles F. Dolan is the father of James L. Dolan, Kathleen M. Dolan, Patrick F. Dolan, Thomas C. Dolan, Deborah Dolan-Sweeney, Marianne Dolan Weber, the father-in-law of Kristin A. Dolan and Brian G. Sweeney and the brother-in-law of Edward C. Atwood.

In light of Mr. Dolan’s experience as founder, his service as Chairman and, previously, as the Chief Executive Officer of Cablevision and its predecessors, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.

 

 

 

JAMES L. DOLAN, 56, Director of the Company since 1991. President of the Company since June 1998. Chief Executive Officer of the Company since October 1995. Executive Chairman of The Madison Square Garden Company since July 2009. Chairman of Madison Square Garden, LP since October 1999. Chief Executive Officer of Rainbow Media Holdings, Inc., a subsidiary of the Company, from September 1992 to October 1995. Vice President of the Company from 1987 to September 1992. He serves as a director of AMC Networks Inc., The Madison Square Garden Company and Live Nation Entertainment Inc. James L. Dolan is the son of Charles F. Dolan, the spouse of Kristin A. Dolan and the brother of Kathleen M. Dolan, Patrick F. Dolan, Thomas C. Dolan, Deborah Dolan-Sweeney, Marianne Dolan Weber, the brother-in-law of Brian G. Sweeney and the nephew of Edward C. Atwood.

 

6


Table of Contents

Proxy Statement 2012 - Cablevision

 

In light of Mr. Dolan’s experience in various positions with Cablevision since 1979, including as its Chief Executive Officer since 1995, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.

 

 

 

KATHLEEN M. DOLAN, 49, Director of the Company since 2008. Director and Founder of Purple Crayon Productions, Inc., a Woodstock, Vermont based community art and music center since September 2004. Kathleen M. Dolan is the daughter of Charles F. Dolan, the sister of James L. Dolan, Patrick F. Dolan, Thomas C. Dolan, Deborah Dolan-Sweeney, Marianne Dolan Weber, the sister-in-law of Kristin A. Dolan and Brian G. Sweeney and the niece of Edward C. Atwood.

In light of Ms. Dolan’s experience as a member of Cablevision’s founding family, as well as the knowledge and experience she has gained and contributions she has made during her tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that she should be reelected to the Board.

 

 

 

KRISTIN A. DOLAN, 45, Director of the Company since 2010. Senior Executive Vice President of Product Management and Marketing for the Company since November 2011. Senior Vice President of the Company from 2003 to 2011. Ms. Dolan has been an employee of the Company since 1990. She serves as a director of AMC Networks Inc. and The Madison Square Garden Company. Kristin A. Dolan is the daughter-in-law of Charles F. Dolan, the spouse of James L. Dolan and the sister-in-law of Kathleen M. Dolan, Patrick F. Dolan, Thomas C. Dolan, Brian G. Sweeney, Deborah Dolan-Sweeney and Marianne Dolan Weber.

In light of Ms. Dolan’s experience in various positions with Cablevision since 1990, as well as the knowledge and experience she has gained and contributions she has made during her tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that she should be reelected to the Board.

 

 

 

PATRICK F. DOLAN, 60, Director of the Company since 1991. President of News 12 Networks of the Company since February 2002. Vice President of News from September 1995 to February 2002. News Director of News 12 Long Island, a subsidiary of the Company, from December 1991 to September 1995. He serves as director of AMC Networks Inc. Patrick F. Dolan is the son of Charles F. Dolan, the brother of James L. Dolan, Kathleen M. Dolan, Thomas C. Dolan, Deborah Dolan-Sweeney, Marianne Dolan Weber, the brother-in-law of Kristin A. Dolan and Brian G. Sweeney and the nephew of Edward C. Atwood.

 

7


Table of Contents

Proxy Statement 2012 - Cablevision

 

In light of Mr. Dolan’s experience as a member of Cablevision’s founding family and in various positions with Cablevision since 1989, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.

 

 

 

THOMAS C. DOLAN, 59, Director of the Company since 2007. Executive Vice President-Strategy and Development, Office of the Chairman since September 2008. Executive Vice President and Chief Information Officer of the Company from October 2001 until April 2005. Mr. Dolan was on unpaid leave of absence from April 2005 until September 2008. Senior Vice President and Chief Information Officer of the Company from February 1996 to October 2001. Vice President and Chief Information Officer of the Company from July 1994 to February 1996. General Manager of the Company’s East End Long Island cable system from November 1991 to July 1994. System Manager of the Company’s East End Long Island cable system from August 1987 to October 1991. He also served as a director of the Company from March 1998 to May 2005. He serves as a director of AMC Networks Inc. and The Madison Square Garden Company. Thomas C. Dolan is the son of Charles F. Dolan, the brother of James L. Dolan, Kathleen M. Dolan, Patrick F. Dolan, Deborah Dolan-Sweeney and Marianne Dolan Weber, the brother-in-law of Kristin A. Dolan and Brian G. Sweeney and the nephew of Edward C. Atwood.

In light of Mr. Dolan’s experience as a member of Cablevision’s founding family and in various positions with Cablevision since 1987, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, a majority of our Board of Directors, acting on the recommendation of a majority of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board. In light of the lawsuit filed by Thomas C. Dolan against Cablevision described under “Related Party Policy and Certain Transactions — Other,” the following directors abstained from the Board’s recommendation on Thomas C. Dolan: Messrs. Araskog, Biondi, Carter, Reifenheiser, Ryan, Tese and Tow.

 

 

 

DEBORAH DOLAN-SWEENEY, 48, Director of the Company since 2008. Director of Dolan Family Foundation since 1986. Director of Dolan Children’s Foundation since 1997. She serves as a director of The Madison Square Garden Company. Deborah Dolan-Sweeney is the daughter of Charles F. Dolan, the spouse of Brian G. Sweeney, the sister of James L. Dolan, Kathleen M. Dolan, Patrick F. Dolan, Thomas C. Dolan and Marianne Dolan Weber, the sister-in-law of Kristin A. Dolan and the niece of Edward C. Atwood.

In light of Ms. Dolan-Sweeney’s experience as a member of Cablevision’s founding family, as well as the knowledge and experience she has gained and contributions she has made during her tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that she should be reelected to the Board.

 

8


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

 

 

BRIAN G. SWEENEY, 47, Director of the Company since 2005. Senior Vice President — eMedia of the Company since January 2000. He serves as a director of AMC Networks Inc. and The Madison Square Garden Company. Brian G. Sweeney is the son-in-law of Charles F. Dolan, the spouse of Deborah Dolan-Sweeney and the brother-in-law of James L. Dolan, Kathleen M. Dolan, Kristin A. Dolan, Patrick F. Dolan, Thomas C. Dolan and Marianne Dolan Weber.

In light of Mr. Sweeney’s experience in various positions with Cablevision since 1993, as well as the knowledge and experience he has gained and contributions he has made during his tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that he should be reelected to the Board.

 

 

 

MARIANNE DOLAN WEBER, 54, Director of the Company since 2005. President of Dolan Family Foundation from 1986 to September 1999. Chairman of Dolan Family Foundation from September 1999 through 2011. President of Dolan Children’s Foundation from 1997 to September 1999. Chairman of Dolan Children’s Foundation from September 1999 through 2011. Manager of Dolan Family Office, LLC from 1997 through 2011. She serves as a director of AMC Networks Inc. and The Madison Square Garden Company. Marianne Dolan Weber is the daughter of Charles F. Dolan, the sister of James L. Dolan, Kathleen M. Dolan, Patrick F. Dolan, Thomas C. Dolan, Deborah Dolan-Sweeney and the sister-in-law of Kristin A. Dolan and Brian G. Sweeney and the niece of Edward C. Atwood.

In light of Ms. Dolan Weber’s experience as a member of Cablevision’s founding family and as Chairman of the Dolan Family Foundation and the Dolan Children’s Foundation, as well as the knowledge and experience she has gained and contributions she has made during her tenure as a director of the Company, our Board of Directors, acting on the unanimous recommendation of the directors elected by the Class B stockholders, has concluded that she should be reelected to the Board.

BOARD OF DIRECTORS AND COMMITTEES

The Board met nine times in 2011. Each of our directors in 2011 attended at least 75% of the meetings of the Board and the committees of the Board on which he or she served during 2011, except for Edward C. Atwood, who joined the Board in May 2011, and Kathleen M. Dolan and Deborah Dolan-Sweeney.

We encourage our directors to attend annual meetings of stockholders and believe that attendance at annual meetings is just as important as attendance at Board and committee meetings. All of our directors in 2011 attended the 2011 annual stockholders meeting except for Charles F. Dolan, Patrick F. Dolan and Kathleen M. Dolan.

 

9


Table of Contents

Proxy Statement 2012 - Cablevision

 

Director Independence

The Company’s Class A common stock is listed on the New York Stock Exchange. As a result, we are subject to the New York Stock Exchange’s corporate governance listing standards. However, a listed company that meets the New York Stock Exchange’s definition of “controlled company,” a company of which more than 50% of the voting power is held by a single entity or group, may elect not to comply with certain of these requirements. On March 19, 2004, the Class B stockholders who are members of the Dolan family and related family entities entered into a Stockholder Agreement relating, among other things, to the voting of their shares of the Company’s Class B common stock and filed a Schedule 13D with the Securities and Exchange Commission as a “group” under the rules of the Securities and Exchange Commission. As a result, we fall within the New York Stock Exchange’s definition of a “controlled company.” As a “controlled company”, we have the right to elect not to comply with the corporate governance rules of the New York Stock Exchange requiring: (i) a majority of independent directors on our Board; (ii) an independent corporate governance and nominating committee; and (iii) an independent compensation committee.

We have elected not to comply with the New York Stock Exchange requirement for a majority of independent directors on our Board and for a corporate governance and nominating committee because of our status as a “controlled company”. We do comply with the requirement for an independent compensation committee. Our Board elected not to comply with the requirement for a majority of independent directors on our Board because of our shareholder voting structure. Under the terms of our Amended and Restated Certificate of Incorporation, the holders of the Company’s Class B common stock have the right to elect up to 75% of the members of our Board and there is no requirement that any of those directors be independent or be chosen independently.

In determining director independence, the Board applies the independence standards of the New York Stock Exchange and affirmatively determines whether each director has any other material relationship with the Company. In applying its independence standards, the Board has determined that each of the following non-employee directors is an “independent” member: Zachary W. Carter, Thomas V. Reifenheiser, John R. Ryan, Vincent Tese, Leonard Tow, Rand V. Araskog and Frank J. Biondi. Each of those non-employee directors is also a nominee for director. In making the determination as to the independence of each director, the Board considered all relationships between that director and the Company and its affiliates and noted the following:

With respect to Vincent Tese, the Board considered one existing relationship noted below and determined that it was not material and that Mr. Tese was independent:

 

   

Vincent Tese has served as an outside director of The Madison Square Garden Company since the date on which it was distributed to the Company’s stockholders, February 9, 2010.

 

10


Table of Contents

Proxy Statement 2012 - Cablevision

 

With respect to Leonard Tow, the Board considered one existing relationship noted below and determined it was not material and that Dr. Tow was independent:

 

   

Leonard Tow has served as an outside director of AMC Networks Inc. since the date on which it was distributed to the Company’s stockholders, June 30, 2011.

The Board has also determined that each member of our Audit Committee, as listed below, qualifies as “independent” under the independence standards of the Securities and Exchange Commission for audit committee members.

Committees

The Board has three standing committees: the Audit Committee, the Compensation Committee and the Executive Committee.

Audit Committee

Committee members: Messrs. Ryan (Chairman), Tese and Tow currently comprise the Audit Committee.

Meetings in 2011: 6

The primary purposes of our Audit Committee are (a) to assist the Board in its oversight of (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) our independent registered public accounting firm’s qualifications and independence and (iv) the performance of our internal audit function and independent registered public accounting firm; (b) to appoint, retain or terminate the Company’s independent registered public accounting firm and to pre-approve or to adopt appropriate procedures to pre-approve all audit, audit-related and other services, if any, to be provided by the independent registered public accounting firm; and (c) to prepare any report of the Audit Committee required by the rules and regulations of the Securities and Exchange Commission for inclusion in our annual proxy statement. The text of our Audit Committee charter is available on our website at www.cablevision.com. A copy may be obtained, without charge, by writing to Cablevision Systems Corporation, Corporate Secretary, 1111 Stewart Avenue, Bethpage, New York 11714.

Our Board has determined that each member of the Audit Committee is independent as defined under the rules of both the New York Stock Exchange and the Securities and Exchange Commission, is financially literate and has accounting or related financial management expertise, as such qualifications are defined under the rules of the New York Stock Exchange, and that John R. Ryan, Chairman of the Audit Committee, is an “audit committee financial expert” within the meaning of the rules of the Securities and Exchange Commission.

 

11


Table of Contents

Proxy Statement 2012 - Cablevision

 

Our Board has established a procedure whereby complaints or concerns with respect to accounting, internal controls and auditing matters may be submitted to the Audit Committee. This procedure is described under “Communicating with Our Directors” below.

Compensation Committee

Committee members: Messrs. Tese (Chairman), Reifenheiser and Ryan currently comprise the Compensation Committee. Our Board has determined that each member of the Compensation Committee is independent as defined under the rules of the New York Stock Exchange.

Meetings in 2011: 16

The primary purposes of our Compensation Committee are to: (a) establish our general compensation philosophy and, in consultation with management, oversee the development and implementation of compensation programs, (b) review and approve corporate goals and objectives relevant to the compensation of our Chief Executive Officer and the other executive officers of the Company who are required to file reports under Section 16(a) of the Securities Exchange Act of 1934, evaluate such executive officers’ performance in light of those goals and objectives and determine and approve their compensation levels based upon those evaluations, (c) oversee the activities of the committee or committees administering our retirement plans, (d) approve any new equity compensation plan or material changes to an existing plan, (e) in consultation with management, oversee regulatory compliance with respect to compensation matters and (f) determine and approve any severance or similar termination payments to current or former executive officers. The text of our Compensation Committee charter is available on our website at www.cablevision.com. A copy may be obtained, without charge, by writing to Cablevision Systems Corporation, Corporate Secretary, 1111 Stewart Avenue, Bethpage, New York 11714.

In accordance with its charter, the Compensation Committee has the authority to engage outside consultants to assist in the performance of its duties and responsibilities. The Compensation Committee uses a compensation consultant to assist the Compensation Committee in determining whether the elements of the Company’s executive compensation program are reasonable and consistent with the Company’s objectives. For more information, see “Compensation Discussion and Analysis.”

Compensation Committee Interlocks and Insider Participation

Messrs. Tese, Reifenheiser and Ryan served as the members of the Compensation Committee during 2011. None of them is a current or former officer or employee of the Company.

Executive Committee

Committee members: Messrs. James L. Dolan (Chairman) and Tese.

Meetings in 2011: 2

 

12


Table of Contents

Proxy Statement 2012 - Cablevision

 

The Executive Committee has broad power to act on behalf of the Board. In practice, the Executive Committee typically acts on ordinary course matters that arise between Board meetings.

Other Committees

In addition to standing committees, pursuant to the Company’s Related Party Transaction Approval Policy a committee consisting of independent directors (an “Independent Committee”) reviews and approves or takes such other action as it may deem appropriate with respect to transactions involving the Company and its subsidiaries, including CSC Holdings, LLC (“CSC Holdings”), on the one hand, and in which any director, officer, greater than 5% stockholder of the Company or any other “related person”, as defined in Item 404 of Regulation S-K of the Securities and Exchange Commission (“Item 404”), has or will have a direct or indirect material interest. Similarly, an Independent Committee oversees approval of all transactions and arrangements between the Company and its subsidiaries, including CSC Holdings, on the one hand, and The Madison Square Garden Company and its subsidiaries, or AMC Networks Inc. and its subsidiaries, on the other hand, to the extent involving amounts in excess of the dollar threshold set forth in Item 404. See “Related Party Policy and Certain Transactions — Agreements Related to the MSG Distribution and AMC Networks Inc. Distribution — Related Party Transaction Approval Policy.”

In connection with the Company’s distribution to its stockholders of the capital stock of The Madison Square Garden Company (the “MSG Distribution”) completed on February 9, 2010, a Special Committee comprised of Messrs. Reifenheiser and Ryan was formed in May 2009 to make recommendations to the full Board concerning the principal elements of the corporate governance structure of The Madison Square Garden Company.

In connection with the Company’s distribution to its stockholders of the capital stock of AMC Networks Inc. (the “AMC Distribution”) completed on June 30, 2011, a Special Committee comprised of Messrs. Reifenheiser and Ryan was formed in November 2010 to make recommendations to the full Board concerning the principal elements of the corporate governance structure of AMC Networks Inc.

Absence of Nominating Committee

We do not have a nominating committee. We decided that it was not appropriate to have a nominating committee because of our shareholder voting structure. Under the terms of our Amended and Restated Certificate of Incorporation, the holders of the Company’s Class B common stock have the right to elect up to 75% of the members of our Board. We believed that creating a committee consisting solely of independent directors charged with responsibility for recommending nominees for election, as directors would be inconsistent with the vested rights of the holders of Class B common stock under our Amended and Restated Certificate of Incorporation. Instead, the Board decided to provide a mechanism in our Corporate Governance Guidelines referred to below for the nominees for election as

 

13


Table of Contents

Proxy Statement 2012 - Cablevision

 

directors by the holders of the Company’s Class A common stock and by the holders of the Company’s Class B common stock. The holders of the Company’s Class A common stock are currently entitled to elect 25% of the members of our Board. Under our Corporate Governance Guidelines, nominees for election as Class A directors shall be recommended to the Board by a majority of the Class A directors then in office. Nominees for election as Class B directors shall be recommended to our Board by a majority of the Class B directors then in office.

Director Selection

Our directors have not set specific, minimum qualifications that nominees must meet in order for them to be nominated for election to the Board, but rather our directors believe that each nominee should be evaluated based on his or her individual merits, taking into account, among other matters, the factors set forth in our Corporate Governance Guidelines under “Board Composition” and “Selection of Directors.” Those factors include:

 

   

The desire to have a Board that encompasses a broad range of skills, expertise, industry knowledge, diversity of viewpoints, opinions, background and experience, and contacts relevant to our businesses;

 

   

Personal qualities and characteristics, accomplishments and reputation in the business community;

 

   

Ability and willingness to commit adequate time to Board and committee matters; and

 

   

The fit of the individual’s skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to the needs of the Company.

The Class A directors will evaluate possible candidates to recommend to the Board for nomination as Class A directors. The Board will also consider nominees for Class A directors recommended by our stockholders. Nominees recommended by stockholders will be given appropriate consideration in the same manner as other nominees. Stockholders who wish to submit nominees for consideration by the Board for election at our 2013 annual meeting of stockholders may do so by submitting in writing such nominees’ names, in compliance with the procedures and along with the other information required by our by-laws. Any such nominee must be submitted to the Corporate Secretary of the Company, at Cablevision Systems Corporation, 1111 Stewart Avenue, Bethpage, New York 11714 not less than 60 nor more than 90 days prior to the date of our 2013 annual meeting of stockholders, provided that if the date of the meeting is publicly announced or disclosed less than 70 days prior to the date of the meeting, such notice must be given not more than ten days after such date is first announced or disclosed. See “Stockholder Proposals for 2013 Annual Meeting.”

The Class B directors will consult from time to time with one or more of the holders of Class B common stock to assure that all Class B director nominees recommended to the Board

 

14


Table of Contents

Proxy Statement 2012 - Cablevision

 

are individuals who will make a meaningful contribution as Board members and will be individuals likely to receive the approving vote of the holders of the outstanding Class B common stock. The Class B directors do not intend to consider unsolicited suggestions of nominees. We believe that this is appropriate in light of the voting provisions of our Amended and Restated Certificate of Incorporation, which vest the right to elect the Company’s Class B directors exclusively in the holders of the Company’s Class B common stock.

Board Leadership Structure

Our Board of Directors has chosen to separate the roles of Chairman of the Board and Chief Executive Officer. The Board believes that this is the optimal leadership structure as it allows the Company to benefit from the services of its founder, Charles F. Dolan, particularly with respect to strategic planning, while also benefitting from the extensive experience of its Chief Executive Officer and President, James L. Dolan, who has served as the Company’s Chief Executive Officer for 17 years, with responsibility for day-to-day management of the Company.

Risk Oversight

The Company’s Board of Directors believes that oversight of risk management is an important Board responsibility. The Audit Committee takes the lead on behalf of the Board in monitoring risk management. The Audit Committee discusses guidelines and policies governing the process by which senior management of the Company and the relevant departments of the Company assess and manage the Company’s exposure to risk and discusses the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. We believe that our executive compensation program, with its emphasis on long-term performance, its close connection to Company-wide and divisional performance and its significant equity components is designed to align the executives’ compensation with the Company’s long-term strategy and growth and, as a result, does not encourage excessive risk taking. Our Compensation Committee considers the issue of the Company’s exposure to risk in establishing and implementing our executive compensation programs.

Corporate Governance Guidelines

Our Board has adopted our Corporate Governance Guidelines. These guidelines set forth our practices and policies with respect to Board composition and selection, Board meetings, executive sessions of the Board, Board committees, the expectations we have of our directors, selection of the Chairman of the Board and the Chief Executive Officer, management succession, Board and executive compensation, and Board self-evaluation requirements. The full text of our Corporate Governance Guidelines may be viewed at our website at www.cablevision.com. A copy may be obtained, without charge, by writing to Cablevision Systems Corporation, Corporate Secretary, 1111 Stewart Avenue, Bethpage, New York 11714.

 

15


Table of Contents

Proxy Statement 2012 - Cablevision

 

Executive Sessions of Non-management Board Members

Under our Corporate Governance Guidelines, our directors who are not also officers of the Company or any of its affiliates (“Non-management directors”) meet at least quarterly in executive sessions. If the Non-management directors include any directors who are not independent under the New York Stock Exchange rules, the independent directors are to meet in executive sessions at least semi-annually. The Non-management directors will rotate as the presiding director at these executive sessions. Only a Non-management director who is also independent under the New York Stock Exchange Rules will preside at an executive session of the independent directors. Non-management directors who are family members of executive officers do not participate in the Non-management director meetings.

Communicating with Our Directors

Our Board has adopted policies designed to allow stockholders and other interested parties to communicate with our directors. Any interested party that wishes to communicate with the Board or any director or the Non-management directors as a group should send communications in writing to Chairman of the Audit Committee, Cablevision Systems Corporation, c/o Corporate Secretary, 1111 Stewart Avenue, Bethpage, New York 11714. Any person, whether or not an employee, who has a concern with respect to accounting, internal accounting controls or auditing matters, may, in a confidential or anonymous manner, communicate those concerns to our Audit Committee by contacting The Network, Inc., which has been designated to act as a confidential contact organization for this purpose, at 1-888-310-6742. This information for communicating with the Audit Committee and Non-management directors is also available on our website at www.cablevision.com.

Code of Business Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics for our directors, officers and employees. A portion of this Code of Business Conduct and Ethics also serves as a code of ethics for our senior financial officers. Among other things, our Code of Business Conduct and Ethics covers conflicts of interest, disclosure responsibilities, legal compliance, confidentiality, corporate opportunities, fair dealing, protection and proper use of assets, and equal employment opportunity and harassment. The full text of the code is available on our website at www.cablevision.com. A copy may be obtained, without charge, by writing to Cablevision Systems Corporation, Corporate Secretary, 1111  Stewart Avenue, Bethpage, New York 11714.

DIRECTOR COMPENSATION

Directors who are Company employees receive no extra compensation for serving as directors. Each non-employee director receives a base fee of $60,000 per year; $2,000 per Board, committee and non-management director meeting attended in person; and $500 per Board, committee and non-management director meeting attended by telephone. Non-employee directors also receive $7,500 annually per committee membership and $15,000 annually per committee chairmanship.

 

16


Table of Contents

Proxy Statement 2012 - Cablevision

 

We also pay our non-employee directors compensation in restricted stock units. Each year, each non-employee director receives a number of restricted stock units for the number of shares of common stock equal to $110,000 divided by the fair market value of a share of Class A common stock based on the closing price on the New York Stock Exchange on the date of grant. The restricted stock units the non-employee directors receive are fully vested on the date of grant. The shares of Class A common stock represented by the restricted stock units are delivered to the non-employee directors after the expiration of 90 days following the end of their service on the Board. Prior to 2007, we paid our non-employee directors compensation in stock options and restricted stock units. Each non-employee director would receive options to purchase 4,000 shares of Class A common stock and a number of restricted stock units for the number of shares of common stock equal to $40,000 divided by the fair market value of a share of Class A common stock. The options were fully vested and exercisable on the date of grant. The per share exercise price of the options was equal to the fair market value of the common stock at the date of grant, which, under the 2006 Stock Plan for Non-Employee Directors, is the closing price of a share of Class A common stock on the New York Stock Exchange on the date of grant.

Our directors who reside in our service territory are entitled to receive free cable television service, high-speed-data and voice service for their primary residence.

Our non-employee directors are entitled to use the Company’s travel service department from time to time to make arrangements for their personal travel. Except as noted below, the Company does not pay any of the directors’ travel expenses other than the cost of travel on Company business. The Company believes it is beneficial to the Company for directors to participate in certain Company events and meet with management, customers and other individuals who have important relationships with the Company. Accordingly, from time to time the Company requests that certain directors attend events, including events outside the New York area. In these instances, the Company provides the directors with transportation and reimburses the directors for expenses for themselves and, in certain cases, their spouses.

Charles F. Dolan and James L. Dolan are employees of the Company and their compensation for 2011 is discussed under “Executive Compensation.”

Kristin A. Dolan, Thomas C. Dolan, Patrick F. Dolan, Brian G. Sweeney and Edward C. Atwood are employees of the Company and their compensation for 2011 is discussed under “Related Party Policy and Certain Transactions.”

 

17


Table of Contents

Proxy Statement 2012 - Cablevision

 

DIRECTOR COMPENSATION TABLE

The table below summarizes the total compensation paid to or earned by each of our non-employee directors for the year ended December 31, 2011. Directors who are employees of the Company receive no compensation for service as directors.

 

Name  

Fees Earned

Or Paid in

Cash

($)(1)

   

Stock

Awards

($)(2)(3)

   

Option

Awards

($)(4)

   

Non-Equity

Incentive Plan

Compensation

($)

   

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

   

All Other

Compensation

($)(5)

   

Total

($)

 

Zachary W. Carter

    64,544        110,000                             *        182,746   

Thomas V. Reifenheiser

    100,066        110,000                             *        218,580   

John R. Ryan

    128,779        110,000                                    238,779   

Vincent Tese

    109,588        110,000                             *        227,825   

Leonard Tow

    83,055        110,000                             *        202,666   

Rand V. Araskog

    68,030        110,000                             *        187,604   

Frank J. Biondi

    86,686        110,000                                    196,686   

Kathleen M. Dolan

    59,044        110,000                                    169,044   

Deborah Dolan-Sweeney

    63,544        110,000                             *        182,200   

Marianne Dolan Weber

    70,544        110,000                             *        188,996   

 

* Represents less than $10,000.

 

(1) The amounts reported for fees include expenses incurred in attending meetings for which the Company reimburses each non-employee director.

 

(2) This column reflects the aggregate grant date fair value of the 3,246 restricted stock units granted in 2011 to each non-employee director, as calculated under Accounting Standards Codification (“ASC”) Topic 718. For each non-employee director, the aggregate number of restricted stock units outstanding is as follows: Mr. Carter, 21,002; Mr. Reifenheiser, 28,314; Mr. Ryan, 28,314; Mr. Tese, 28,314; Dr. Tow, 24,565; Mr. Araskog, 24,565; Mr. Biondi, 24,565; Ms. Kathleen M. Dolan, 17,927; Ms. Dolan-Sweeney, 13,695; and Ms. Dolan Weber, 24,565.

 

(3) In connection with the AMC Distribution, certain anti-dilution adjustments were made to outstanding awards held by our directors. Each holder of a restricted stock unit received one share of AMC Class A common stock in respect of every four of the Company’s restricted stock units owned on the record date upon the AMC Distribution and has continued to be entitled to common stock (or cash or other property) in accordance with the award agreement.

 

(4) No stock options were granted in 2011.

For each non-employee director, the aggregate number of shares of Class A common stock underlying outstanding stock options at December 31, 2011 is as follows: Mr. Carter, 0; Mr. Reifenheiser, 8,000; Mr. Ryan, 16,000; Mr. Tese, 23,929; Dr. Tow, 8,000; Mr. Araskog, 0; Mr. Biondi, 8,000; Ms. Kathleen M. Dolan, 0; Ms. Dolan-Sweeney, 0; and Ms. Dolan Weber, 8,000.

 

(5) This column includes, for each individual, as applicable, an amount for free cable television service, high-speed data and voice service, which in the aggregate were less than $10,000 per non-employee director.

 

18


Table of Contents

Proxy Statement 2012 - Cablevision

 

PROPOSAL 2

Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board has approved the retention of KPMG LLP (“KPMG”) as our independent registered public accountants for 2012. KPMG will audit our financial statements for fiscal year 2012. We are asking that you ratify that appointment, although your ratification is not required. A KPMG representative will be at the annual meeting to answer appropriate questions and to make a statement if he or she desires. This proposal requires the affirmative vote of the majority of the votes cast by the holders of Class A common stock and Class B common stock, voting together as a single class. In accordance with our Amended and Restated Certificate of Incorporation, holders of Class A common stock have one vote per share and holders of Class B common stock have ten votes per share.

The Board unanimously recommends you vote FOR this proposal.

KPMG LLP Information

The following table presents fees for services rendered by KPMG in 2010 and 2011.

 

      2010      2011  
     (in thousands)  

Audit Fees(1)

   $ 5,300       $ 4,416   

Audit Related Fees(2)

     1,569         2,031   

Tax Fees(3)

     1,300         999   
  

 

 

    

 

 

 

Total Fees

   $ 8,169       $ 7,446   
  

 

 

    

 

 

 

 

(1) Audit fees consisted of services for: (1) the audit of the Company’s annual financial statements for 2010 and 2011, (2) audits of internal control over financial reporting for 2010 and 2011, (3) reviews of the interim financial statements included in the Company’s Quarterly Reports on Form 10-Q for 2010 and 2011 and (4) XBRL-related agreed-upon procedures related to the Company’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

 

(2) Audit related fees consisted principally of services relating to acquisitions, audits of certain subsidiary financial statements, audits of employee benefit plans, audit procedures to comply with contractual agreements and filings with the Securities and Exchange Commission. In addition, in 2010, these fees included services related to the MSG Distribution and in 2010 and 2011 these fees included services related to the AMC Distribution.

 

(3) Tax fees consisted of fees for tax consultation services. In addition, in 2010 these fees related to both the MSG Distribution and the AMC Distribution and in 2011 these fees related to the AMC Distribution.

The Audit Committee’s policy requires that the Audit Committee pre-approve audit and non-audit services performed by the independent registered public accounting firm. The Audit Committee may delegate its pre-approval authority to the Chairman or any other member of the Audit Committee. All of the services for which fees were disclosed under “Audit Related Fees” and “Tax Fees” in the table above were pre-approved under the Audit Committee’s pre-approval policy.

 

19


Table of Contents

Proxy Statement 2012 - Cablevision

 

REPORT OF AUDIT COMMITTEE

A role of the Audit Committee is to assist the Board in its oversight of the Company’s financial reporting process. As set forth in the charter of the Audit Committee, management of the Company is responsible for the preparation, presentation and integrity of the Company’s financial statements, the Company’s accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing the Company’s financial statements and expressing an opinion as to their conformity with generally accepted accounting principles.

In the performance of its oversight function, the Audit Committee has reviewed and discussed the audited financial statements with management and the independent registered public accounting firm. The Audit Committee has also discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T. Finally, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit Committee regarding independence, and has discussed with the auditors the auditors’ independence. All audit and non-audit services performed by the independent registered public accounting firm must be specifically approved by the Audit Committee or a member thereof.

Based upon the review and discussions described in this report, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission.

 

Members of the Audit Committee   
John R. Ryan     Vincent Tese        Leonard Tow   

 

20


Table of Contents

Proxy Statement 2012 - Cablevision

 

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview of Executive Compensation Program

Our executive compensation program is administered by our Compensation Committee. The responsibilities of the Compensation Committee are set forth in its charter. Among other responsibilities, the Compensation Committee (1) establishes our general compensation philosophy and, in consultation with management, oversees the development and implementation of compensation programs; (2) reviews and approves corporate goals and objectives relevant to the compensation of our Chief Executive Officer and the other executive officers of the Company who are required to file reports under Section 16(a) of the Securities Exchange Act of 1934, evaluates such executive officers’ performance in light of those goals and objectives and determines and approves their compensation levels based upon those evaluations; (3) oversees the activities of the committee or committees administering our retirement plans. The Compensation Committee also administers our shareholder approved compensation plans. For more information about the Compensation Committee, please see “Board of Directors and Committees — Committees — Compensation Committee.”

Compensation Consultant

In accordance with its charter, the Compensation Committee has the authority to engage outside consultants to assist in the performance of its duties and responsibilities. The Compensation Committee uses a compensation consultant to assist the Compensation Committee in determining whether the elements of the Company’s executive compensation program are reasonable and consistent with the Company’s objectives. The compensation consultant advises the Compensation Committee on designing the executive compensation program and the reasonableness of individual compensation awards. The compensation consultant reports directly to the Compensation Committee, although the compensation consultant meets with members of management from time to time for purposes of gathering information on management proposals and recommendations to be presented to the Compensation Committee.

The Compensation Committee previously engaged a compensation consultant, ClearBridge Compensation Group (“ClearBridge”), to conduct a review of executive compensation to assist the Compensation Committee in determining compensation programs and decisions for 2011. In the fourth quarter of 2011 the Compensation Committee engaged a new compensation consultant, Pay Governance LLC (“Pay Governance”), replacing ClearBridge. The Compensation Committee has retained Pay Governance to assist in designing and establishing the Company’s executive compensation programs for 2012.

 

21


Table of Contents

Proxy Statement 2012 - Cablevision

 

Role of Executives in Compensation Decisions

The Compensation Committee reviews the performance and compensation of the Chief Executive Officer and the Chairman and, following discussions with its compensation consultant, establishes each of their compensation. The management of the Company provides to the Compensation Committee, either directly or through the compensation consultant, management’s recommendations on the compensation, including annual cash incentive compensation, for executive officers other than the Chief Executive Officer and the Chairman. The Chief Executive Officer and the Chief Financial Officer assist the Compensation Committee and its compensation consultant in determining the Company’s core peer group and the peer group comparisons, as described below. Other members of management provide support to the Compensation Committee as needed. Based upon a review of performance and historical compensation, recommendations and information from members of management, and discussions with its compensation consultant, the Compensation Committee determines and approves compensation for the executive officers.

Executive Compensation Program Objectives and Philosophy

The Company is one of the nation’s leading media and telecommunications companies and one of the largest cable operators in the United States, based on the number of video subscribers. As of December 31, 2011, the Company served approximately 3.25 million basic video subscribers, approximately 2.97 million high-speed data service subscribers and approximately 2.36 million voice subscribers, in and around the New York metropolitan area and in Montana, Wyoming, Colorado, and Utah. We believe that our cable television systems in the New York metropolitan area comprise the largest metropolitan cluster of cable television systems under common ownership in the United States (measured by number of video subscribers). We also provide high-speed data and Voice over Internet Protocol services using our cable television broadband network. Through our Cablevision Lightpath, Inc. subsidiary, we provide telephone services and high-speed Internet access to the business market. In addition, we own approximately 97.2% of Newsday LLC which operates a newspaper publishing business. We also own a regional news and high school sports programming service, a motion picture theater business, and a cable television advertising sales business. We operate our businesses in an intensely competitive, highly regulated, rapidly changing and complex technological environment. We strive to remain competitive by developing new and advanced products and services and continuously improving our offerings.

Despite the continuing difficult economic and competitive environment in 2011, the Company achieved approximately $6.7 billion of consolidated net revenue, $2.3 billion of consolidated adjusted operating cash flow and $1.2 billion of consolidated operating income for the year ended December 31, 2011. All of these measures were higher than the comparable amounts for 2010. See “Executive Compensation — Compensation Practices and Policies — Performance Objectives” for a description of how we calculate adjusted operating cash flow.

 

22


Table of Contents

Proxy Statement 2012 - Cablevision

 

In 2011, the Company continued to take numerous steps to enhance value for its stockholders, including increasing our quarterly dividend by 20% to $0.15 per share and actively conducting our stock repurchase program under which the Company repurchased approximately 21 million shares for the year ended December 31, 2011.

In June 2011, the Company completed the AMC Distribution, successfully creating a new stand-alone public company owning principally the national programming networks, including AMC, WE tv, IFC and Sundance Channel, previously included in the Company’s Rainbow segment. This transaction was structured as a tax-free distribution for the Cablevision stockholders.

The Company also maintained industry leading cable operations metrics including product penetration and revenue per subscriber. For the three-year period ended December 31, 2011, the total shareholder return of the Class A common stock (adjusted for the MSG Distribution and the AMC Distribution) and including the quarterly dividend, was approximately 56%. The return for the S&P 500 for the three-year period ended December 31, 2011 was approximately 49%.

The Company places great importance on its ability to attract, retain, motivate and reward experienced executives who can continue to help the Company achieve strong financial, operational and stock performance. The Company strives to do so by developing executive compensation policies and programs that are consistent with, explicitly linked to, and supportive of the strategic objectives of growing the Company’s businesses and maximizing stockholder value. Our current named executive officers, who are the five executive officers listed in the tables under “Executive Compensation Tables” below (other than Messrs. Rutledge and Huseby, each of whom left the Company in 2011) have a combined total of more than 100 years of service in the cable and telecommunications industries with the Company and other related companies and industries. The Compensation Committee seeks to offer both short-term and long-term incentive compensation programs that will provide competitive compensation, drive Company performance and encourage executive retention.

The following principles describe the key objectives of our executive compensation program:

 

   

First, the majority of compensation for the Company’s executive officers should be at risk and based on the performance of the Company, so that actual compensation levels depend upon the Company’s actual performance as determined by the Compensation Committee;

 

   

Second, over time, incentive compensation of the Company’s executive officers should focus more heavily on long-term rather than short-term accomplishments and results;

 

   

Third, equity-based compensation should be used to align executive officers’ interests with the stockholders’ interests; and

 

23


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

   

Fourth, the overall executive compensation program should be competitive, equitable and structured so as to ensure the Company’s ability to attract, retain, motivate and reward the talented executives who are essential to the Company’s continuing success. Total direct compensation, rather than individual compensation elements, is the Compensation Committee’s focus in providing competitive compensation opportunities.

In formulating the executive compensation program, the Compensation Committee seeks to fulfill these objectives by maintaining appropriate balances between (1) short-term and long-term compensation, (2) cash and equity compensation and (3) performance-based and non-performance-based compensation.

Compensation Practices and Policies

Employment Agreements

We have written employment agreements with certain named executive officers. In March 2011, we entered into a new employment agreement with Gregg G. Seibert which replaced his prior agreement. In February 2012, we entered into a new employment agreement with David G. Ellen which replaced his prior agreement. For a description of the terms and provisions of the employment agreements, see “Executive Compensation Tables — Employment Agreements”.

Performance Objectives

As described below under “— Elements of In-Service Compensation”, the Company grants performance-based cash incentives as important elements of executive compensation.

Generally, the performance metrics for the incentives have been based on net revenues and on adjusted operating cash flow, which we also refer to as “AOCF”, a non-GAAP financial measure, defined as operating income (loss) excluding depreciation and amortization (including impairments), stock based compensation expense or benefit and restructuring expense or credits. We also use “Free Cash Flow” as a performance metric, which is a non-GAAP financial measure, defined as the combined AOCF of the Company’s operating businesses, less capital expenditures of the Company’s operating businesses. The Company considers these performance measures to be key measures of the Company’s operating performance. At the time of the grant of an award, the performance measures used may contemplate certain potential future adjustments and exclusions.

Tally Sheets

The Compensation Committee has reviewed tally sheets setting forth all components of compensation payable, and the benefits accruing, to the named executive officers for the completed fiscal year, including all cash compensation, perquisites and the current value of outstanding equity-based awards. The tally sheets also set forth potential payouts to the named executive officers upon various types of termination. The Compensation Committee considers the information presented in tally sheets in determining future compensation.

 

24


Table of Contents

Proxy Statement 2012 - Cablevision

 

Benchmarking

The Compensation Committee reviewed and compared compensation from a core peer group of companies in the same general industry or industries as the Company as well as companies of similar size and business mix to evaluate the competitiveness and appropriateness of our compensation program. The Compensation Committee, with the assistance of its compensation consultant, selected the companies that would comprise the core peer group in 2011, which were Comcast Corporation, DIRECTV Group, Inc., Time Warner Cable Inc., Viacom Inc., CBS Corporation, CenturyLink, Inc., DISH Network Corporation, Liberty Media Corporation, Frontier Communications Corporation, Level 3 Communications, Inc., Windstream Corporation and Charter Communications, Inc. Because we also compete for executives with more diversified companies, the Compensation Committee also considered a supplemental reference group that included AT&T Inc., Verizon Communications Inc., Time Warner Inc., The Walt Disney Company, Sprint Nextel Corporation and News Corporation. The Compensation Committee determined that the core peer group represented an appropriate benchmark for the competitive market for our senior executive talent in 2011, based on our business operations and competitive labor markets, and the supplemental reference group provided an additional relevant point of reference. The core peer group is a broader group of companies than the companies included in the peer group for the stock performance graph contained in our Annual Report on Form 10-K.

The Compensation Committee’s compensation consultant presented to the Compensation Committee a comparison of base salary, target bonus, total cash compensation (defined as base salary plus target bonus), long-term incentives and total direct compensation (defined as total cash compensation plus the annualized value of long-term incentives) with the median, 75th percentile and 90th percentile of a peer group of companies that were identified based on the Company’s current business mix and labor markets and also compared compensation levels with the supplemental reference group. As part of the total compensation review, the Compensation Committee’s compensation consultant assisted the Compensation Committee in (1) determining a peer group to be used for competitive comparisons, (2) assessing executive compensation in comparison with the peer group and in light of the Company’s performance and (3) reviewing the Company’s equity and cash-based executive incentive programs, taking into account evolving market trends. In the analysis, it was noted that, as in prior years, there was limited market information regarding the role and compensation of chairmen who are executive officers but not chief executive officers. The Compensation Committee considered that the Company’s founder and Chairman, Mr. Charles F. Dolan, continues to play a unique and important role in setting the strategic direction of the Company, in addition to his role on the Board. The Compensation Committee determined to exclude Mr. Charles F. Dolan from these comparisons with officers of the members of the core peer group. The Compensation Committee concluded that as a result of Mr. Dolan’s important role in setting the strategic direction of the Company, an appropriate general guideline for Mr. Dolan’s target total direct compensation for 2011 was slightly below the target total direct compensation of the Chief Executive Officer of the Company.

 

25


Table of Contents

Proxy Statement 2012 - Cablevision

 

The Compensation Committee also received information from its compensation consultant concerning comparisons of compensation levels for the other named executive officers to comparable positions among the peer companies. Compensation of the Company’s Chief Executive Officer, Mr. James L. Dolan, was compared to chief executive officers at the peer group companies. Mr. Gregg G. Seibert, Executive Vice President and Chief Financial Officer of the Company, was compared to chief financial officers at the peer group companies. Mr. David G. Ellen, Executive Vice President and General Counsel of the Company, and Ms. Victoria D. Salhus, Senior Vice President, Deputy General Counsel and Secretary of the Company, were compared to the chief legal officer, and deputy chief legal officer, respectively, at peer companies.

The Compensation Committee also took into account the responsibilities of Mr. Charles F. Dolan with AMC Networks Inc. (“AMC”) following the AMC Distribution and Mr. James L. Dolan with The Madison Square Garden Company (“MSG”) following the MSG Distribution.

Compensation of Mr. Thomas M. Rutledge, who was Chief Operating Officer of the Company until December 19, 2011, was treated as a second ranking executive and was compared to a benchmark to be equal to 65% of the compensation of the chief executive officer at the peer group companies. Compensation of Mr. Michael P. Huseby, who was Chief Financial Officer of the Company until June 7, 2011, and Executive Vice President until July 1, 2011, was compared to chief financial officers at the peer companies.

Based on the total compensation review, the Compensation Committee set a general guideline for target total direct compensation based on a combination of internal and market considerations. Internal factors include experience, skills, position, level of responsibility, historic and current compensation levels, internal relationship of compensation levels between executives, as well as attraction and retention of executive talent. Market considerations include referencing market pay levels and pay practices among a peer group of companies with a reference to the third quartile of the core peer group. The Compensation Committee’s decisions are based upon a combination of these considerations and may exceed or fall below the third quartile of the core peer group. The Compensation Committee believed that this range was appropriate in light of the dynamics, diversity, complexities and competitive nature of the Company’s businesses as well as the Company’s performance. The Compensation Committee believed that the guideline for target total direct compensation provided a useful point of reference, along with the other factors described above, in administering the Company’s executive compensation program.

Say on Pay

The Company plans to hold a stockholder advisory vote on executive compensation every three years. The first executive compensation advisory vote was held at the Company’s 2011 annual meeting of stockholders, at which more than a majority of the votes of holders of Class A common stock and Class B common stock, voting together as a single class, approved the advisory vote on the compensation of executive officers. The Compensation Committee

 

26


Table of Contents

Proxy Statement 2012 - Cablevision

 

considered the affirmative outcome of this vote for compensation and has continued to apply the same principles when making compensation decisions for our named executive officers.

Elements of In-Service Compensation

Our executive compensation program consists of three principal elements, each of which is important to the Company’s desire to attract, retain, motivate and reward highly-qualified executives. The three principal compensation elements are base salary, annual cash incentives and long-term incentives. In addition, each executive officer is also eligible to receive certain benefits, which are generally provided to all other eligible employees, and certain perquisites described below.

A significant percentage of total direct compensation is allocated to incentive compensation in accordance with the Compensation Committee’s philosophy as described above. The Compensation Committee reviews historical Company compensation and other information provided by its compensation consultant and other factors such as experience, performance and length of service to determine the level and mix of compensation for executive officers, by position and grade level, that the Compensation Committee has deemed appropriate.

Base Salaries

The Compensation Committee is responsible for setting the base salaries of the named executive officers. Base salaries for these executives have been set at levels that are intended to reflect the competitive marketplace in attracting and retaining quality executives. Each of the employment agreements of the named executive officers contains a minimum base salary level. For information regarding these minimum base salary levels, please see “— Employment Agreements” below. The Compensation Committee currently reviews the salaries of the named executive officers no less frequently than on an annual basis. The Compensation Committee evaluates each executive’s performance, experience and grade level and may increase executive salaries. Based on their performance and in accordance with the terms of the employment agreements, the Compensation Committee, in its discretion, has increased base salaries for the named executive officers over time. Based on evaluation of performance, experience, grade level, and the competitive marketplace, the Compensation Committee reviewed the base salaries of the named executive officers in 2011. The Compensation Committee increased the base salaries of Messrs. James L. Dolan, Gregg G. Seibert, and David G. Ellen in 2011 by $250,000, $300,000 and $150,000, respectively, and of Ms. Victoria D. Salhus in 2011 by $15,000. The base salary of Michael P. Huseby was increased by $31,000. The base salaries for the named executive officers in 2011 are set forth in the Summary Compensation Table under “Executive Compensation Tables” below.

Annual Incentives

Under our executive compensation program, annual incentive awards, or bonuses, are made to executive officers and other members of management. For the named executive officers and

 

27


Table of Contents

Proxy Statement 2012 - Cablevision

 

other individuals that the Compensation Committee determines may be covered by Section 162(m) of the Internal Revenue Code, as amended, 2011 bonuses were granted under the 2006 Cash Incentive Plan (“CIP”), a stockholder approved plan. For all other members of management, bonuses were granted under a management performance incentive program (“MPIP”) administered by the Compensation Committee. The 2011 Cash Incentive Plan was approved by stockholders in 2011 and will be used for 2012 annual incentive awards.

Annual incentive awards are designed to link directly executive compensation to the Company’s performance and provide incentives and rewards for excellent business performance during the year. Each bonus-eligible employee is assigned a target bonus of a percentage of that employee’s annual base salary. The target bonuses are determined based upon the applicable employee’s position, grade level, responsibilities, and historical and expected future contributions to the Company. In addition, the employment agreement of each named executive officer who has an employment agreement, other than Mr. Charles F. Dolan, contains a minimum target bonus level. For information regarding these minimum target bonus levels, please see “— Employment Agreements” below. The Compensation Committee currently reviews the target bonus levels of the named executive officers no less frequently than on an annual basis. The Compensation Committee evaluates each executive’s performance, experience and grade level and may adjust executive target bonus levels accordingly. Based on their performance and in accordance with the terms of the employment agreements, the Compensation Committee, in its discretion, has increased target bonus levels for the named executive officers over time. Target bonuses for 2011 were as follows: Mr. Charles F. Dolan — 175%; Mr. James L. Dolan — 200%; Mr. Seibert — 150%; Mr. Ellen — 95% and Ms. Salhus — 60%. Target bonuses for 2011 for Messrs. Rutledge and Huseby were 200% and 90%, respectively.

The payment of annual incentive awards depends on the extent to which the Company achieves performance objectives established by the Compensation Committee. For 2011, under the CIP, if the Company achieved a certain target AOCF as compared to 2010, each named executive officer would be eligible to receive payment of an annual incentive award equal to the lesser of $10 million and two times his target bonus, subject to the Compensation Committee’s discretion to reduce the award. In general, under the CIP, regardless of whether the Company achieves, exceeds or fails to achieve its target metrics, the Compensation Committee has the discretion only to decrease bonuses if the Company wishes to preserve the Section 162(m) deduction. For 2011, the performance target for the named executive officers was at least 90% of the Company’s business units’ AOCF in 2010. As the Company’s business units’ actual AOCF for the period was in excess of 90% of the Company’s business units’ AOCF in 2010 after taking into account the AMC Distribution and certain other adjustments including various adjustments for acquisitions, dispositions, investments in new business ventures and other miscellaneous costs, the performance target was met. The Compensation Committee elected to exercise its negative discretion and to reduce the incentive award payments to the levels that the named executive officers would have received if they had been participants in the MPIP. The Compensation Committee established MPIP

 

28


Table of Contents

Proxy Statement 2012 - Cablevision

 

performance metrics that varied depending upon the eligible employee’s specific business unit. These performance objectives related to items such as net revenues, AOCF, subscribers, advertising revenue, capital expenditures and other division-specific strategic and operating metrics. For executive officers and other individuals who hold corporate positions at the Company, the MPIP metrics were predominantly based on a weighted average of the comparisons of all of the business units’ performances against their respective performance objectives. In determining to use the MPIP payouts for the bonuses payable to the named executive officers, the Compensation Committee used this weighted average. Bonuses awarded under the MPIP may also be adjusted for recipients’ individual performances. To the extent the Company exceeds the MPIP performance metrics, employees may receive payments greater than their target bonuses.

As part of the process for determining executive compensation in 2011, the Compensation Committee reviewed the payouts that the named executive officers were expected to receive in 2011 for performance awards granted in prior years, as well as each executive officer’s performance, experience and grade level.

Long-Term Incentives

Our executive compensation program is designed to achieve the objectives described above under “Executive Compensation Program Objectives and Philosophy”. Our core long-term incentive program in 2011 for all executives consisted of two elements: restricted stock and cash performance awards. These long-term incentives were awarded to members of management, except our most senior executives, based upon each individual’s grade level and provided approximately 50% of the value of their long-term incentive awards in restricted stock and approximately 50% of the value of their long-term incentive award as cash performance awards. We believe restricted stock would provide the named executive officers with an incentive to improve the Company’s stock price performance and a direct alignment with stockholders’ interests, as well as a continuing stake in the long-term success of the Company. The cash performance awards also would provide strong incentives for the executives to help the Company achieve specific long-term financial objectives. In addition, because these equity and cash awards would vest over time, we believe these awards would provide strong incentives for the executives to remain with the Company.

In 2009, the long-term incentive program for our most senior executives, including certain of the named executive officers, was changed to add stock options as a third long-term incentive element for those executives, while maintaining the same target long-term incentive compensation value based upon each individual’s grade level. We believed adding stock options for those executives reinforced alignment with stockholders’ interests. As a result in 2009, certain of the named executive officers received approximately 40% of the value of their long-term incentive awards in stock options, approximately 30% in restricted stock and approximately 30% of the value of their long-term incentive awards as cash performance awards.

 

29


Table of Contents

Proxy Statement 2012 - Cablevision

 

In 2010, we changed the long-term incentive program for our most senior executives, including certain of the named executive officers and returned to the mix of elements used in 2007 and 2008: restricted stock and cash performance awards. As a result of the change in the long-term incentive program, in 2010, certain of the named executive officers received approximately 40% of the value of their total long-term incentive awards in restricted stock and approximately 60% of the value of their long-term incentive awards as cash performance awards. In 2010, the long-term incentives for other executive officers (including the remaining named executive officers) and members of management consisted of approximately 50% each of restricted stock and cash performance awards. With respect to our annual long-term incentive grants, we continued the same mix of elements for the long-term incentive program in 2011 and 2012, except that for 2012 all of the named executive officers will receive approximately 50% of the value of their annual long-term incentive awards in restricted stock and approximately 50% of the value of their annual long-term incentive awards as cash performance awards. Also, for 2012, we made a one-time special grant of stock options to certain officers and employees, including the named executive officers as described below under “— Elements of In-Service Compensation — Long-Term Incentives — Stock Options.” Grants of long-term incentives are made under stockholder-approved plans. Prior to 2006, restricted stock, stock options and stock appreciation rights awards were granted under our 1996 Amended and Restated Employee Stock Plan, which expired by its terms in February 2006. This plan was replaced by our 2006 Employee Stock Plan, which was approved by stockholders at our annual meeting in May 2006. Cash awards have been made under our Long-Term Incentive Plan, which was replaced by the CIP in May 2006. The 2011 Cash Incentive Plan was approved by stockholders in 2011 and will be used for 2012 cash performance awards.

As described above under “— Compensation Practices and Policies — Other,” our goal is to make annual grants of the elements of our long-term incentive program to eligible employees after the public announcement of our annual financial information. Restricted stock and performance awards were granted in March 2011. The current executive compensation program annual long-term incentives were granted in March 2012, with any grants for new eligible employees hired after annual grants, but prior to October 1 of each year, to be made in October.

Restricted Stock

Under our executive compensation program, annual grants of restricted stock are made to executive officers and other members of management. An award of restricted stock provides the recipient with a specified number of shares of Class A common stock as long as the recipient remains employed by the Company through the date that the restrictions lapse. Under the current executive compensation program, restricted stock awards will vest in their entirety on the third anniversary of the date of grant (i.e., three-year cliff vesting) as long as the recipient is continuously employed until such date. Information regarding restricted stock awards for the named executive officers in 2011 is set forth in the Summary Compensation

 

30


Table of Contents

Proxy Statement 2012 - Cablevision

 

Table and the Grants of Plan-Based Awards Table under “Executive Compensation Table” below. More information regarding other restricted stock grants for the named executive officers appears in the Outstanding Equity Awards at Fiscal Year-End Table under “Executive Compensation Tables” below. Vesting of restricted stock awards granted in March 2011 to Messrs. Charles F. Dolan, James L. Dolan, Gregg G. Seibert and David G. Ellen was also subject to the Company achieving a performance condition designed to achieve tax deductibility under Section 162(m) of the Internal Revenue Code. The performance condition required the Company to achieve a 1% target rate of growth in AOCF (relative to 2010) in any of the three fiscal years 2011, 2012 and 2013. This performance requirement was met in 2011.

In connection with Mr. Rutledge’s 2009 employment agreement with the Company, he received a special award of 460,200 shares of restricted Class A common stock in March 2010. This award was subject to the same terms, including risk of forfeiture, reflected in the Company’s current standard form restricted stock agreement, except that the forfeiture restrictions on the shares subject to the special stock award expired with respect to two-thirds of the shares on December 15, 2010 and expired with respect to the remaining one-third of the shares on December 15, 2011. See “— Employment Agreements”.

Performance Awards

The current executive compensation program contemplates annual grants of three-year performance awards to executive officers and other members of management to be earned on the basis of long-term performance relative to pre-established financial goals. The Compensation Committee sets the performance objectives for each award in the first quarter of the year of grant. Each recipient will be eligible to receive a specified dollar amount, depending on the employee’s grade level, to the extent that the performance objectives are achieved.

The performance awards granted in 2011 will be payable in 2014 if the Company achieves specified targets of net revenues, AOCF or Free Cash Flow in the year ending December 31, 2013. The target levels of net revenues, AOCF and Free Cash Flow were derived from the Company’s five-year plan for its operating business units presented to the Board in connection with the Company’s 2011 annual budget. These targets were intended to measure ongoing operating performance of the Company and are subject to various adjustments such as for acquisitions and dispositions and investments in new business initiatives and exclude all charges for long-term performance based compensation. In determining achievement of the 2011 performance awards, net revenues are weighted at 20%, AOCF at 50% and Free Cash Flow at 30%. The awards provide for a potential payout on a sliding scale such that the actual payment may range from zero (if incremental operating business unit net revenues, incremental operating business unit AOCF and incremental Free Cash Flow fail to reach at least 60% of the targets) to 200% (if, for example, incremental operating business unit net revenues, operating business unit AOCF and Free Cash Flow equal or exceed 133% of the targets). If the Company does not achieve threshold levels of performance, the award does not

 

31


Table of Contents

Proxy Statement 2012 - Cablevision

 

provide for any payment. If the Company exceeds threshold levels but does not achieve the targeted rates, or if the Company achieves one target but not all three, the award provides for partial payments. In addition, if results exceed the desired targets, recipients will be rewarded for the exceptional performance. Based on the experience and grade level of the named executive officers in 2011, the Compensation Committee granted Messrs. Charles F. Dolan, James L. Dolan, Gregg G. Seibert and David G. Ellen and Ms. Victoria D. Salhus performance awards with targeted amounts of $4,380,000, $4,350,000, $3,000,000, $1,320,000 and $250,000, respectively. Messrs. Rutledge and Huseby were granted performance awards with targeted amounts of $3,990,000 and $1,230,000, respectively, but forfeited such awards upon the termination of their employment. Performance awards for the named executive officers granted in 2011 are set forth in the Grants of Plan-Based Awards Table under “Executive Compensation Tables” below.

Because the targets for all performance awards have been derived from the Company’s confidential five-year strategic plans, which are not disclosed publicly for competitive reasons, we do not believe it is appropriate to disclose specific future numerical targets. Disclosure of these targets could provide information that could lead to competitive harm. We believe that our five-year plans, and consequently the targets set for the performance awards, are ambitious and reflect desired above-market performance. In determining the threshold levels of performance, the Compensation Committee considered, among other factors, the Company’s five-year plan and the degree of difficulty in achieving the targets, including a comparison of the five-year plan with analysts’ published projections of our growth as well as of some of our competitors. The 2011 performance award included a sliding scale of payouts based upon the levels of incremental net revenues, AOCF and Free Cash Flow. As a result of the Company’s current strategy to make additional investments designed to enhance our products and services with a focus on retention and acquisition of customers, the targets of these awards are anticipated to be only partially achieved. See “— Elements of In-Service Compensation — Long-Term Incentives — Stock Options” The Compensation Committee has the authority to amend or waive the performance targets under these awards and to make interpretations and adjustments thereto.

Company performance awards earned in 2011 were granted in 2009 and are reflected in the Summary Compensation Table under “Executive Compensation Tables” below. The amount earned under these awards was based on incremental net revenues and AOCF from 2008 to 2011, calculated exclusive of certain corporate expenses and subject to certain adjustments to reflect changes in the Company’s business and other factors over the course of the award measurement period, including to account for acquisitions of or investments in new businesses, dispositions or discontinuation of businesses (including the MSG Distribution) and changes in the application of GAAP. We refer to incremental net revenues and incremental AOCF, as so adjusted for purposes of performance awards, as “Award-Adjusted Incremental Net Revenue” and “Award-Adjusted Incremental AOCF,” respectively. Amounts earned under performance awards in 2011 were based on achievements against target Award-Adjusted Incremental Net Revenue of $1.713 billion and target Award-Adjusted

 

32


Table of Contents

Proxy Statement 2012 - Cablevision

 

Incremental AOCF of $641 million. For the period between 2008 and 2011, Award-Adjusted Incremental Net Revenue was $1.107 billion and Award-Adjusted Incremental AOCF was $519 million. Each of these measures is weighed equally for purposes of determining amounts earned under the performance awards. Under the sliding-scale payout described above, this resulted in an earned amount equal to 80.2% of the targeted payout amount for performance awards granted in 2009.

Stock Options

As discussed above, under our 2009 executive compensation program, we issued stock options to certain of our most senior executives, including the named executive officers, in addition to restricted stock and cash performance awards. The executive compensation program in 2010 and 2011 did not include stock options. Each stock option granted in 2009 was granted with an exercise price no less than the closing price of the Class A common stock on the date of grant. Recipients of stock options will only realize value if, and to the extent that, the price of Class A common stock on the date the stock option is exercised exceeds this exercise price. Generally, the stock options granted in 2009 vest over three years in 33-1/3% annual increments and expire 5-1/2 years from the grant date; however certain stock options granted in 2009 had a 10 year term.

In addition, in 2012, we made a one-time special grant of stock options to certain officers and employees of the Company, including the named executive officers. As a result of the Company’s current strategy which calls for additional investments designed to enhance our products and services with a focus on retention and acquisition of customers, we determined in February 2012 that the targets of the three-year performance awards granted in 2010 are not expected to be achieved and those granted in 2011 are expected to be only partially achieved and paid out in 2014. Accordingly, in the fourth quarter of 2011, the related accruals on our financial statements were reversed or substantially reduced. The Compensation Committee concluded that it was undesirable to have a significant element of the compensation of its named executive officers, senior executives and other employees based on performance objectives that we believed were unlikely to be achieved as a result of the Company’s current strategy. Therefore, the Compensation Committee made a one-time special grant of stock options to certain officers and employees of the Company, including the named executive officers. The 2012 stock option awards were meant to further incentivize and retain current employees as the Company’s current strategy is rolled out. Each stock option granted in 2012 was granted with an exercise price equal to the closing price of the Class A common stock on the date of grant. Recipients of stock options will only realize value if, and to the extent that, the price of Class A common stock on the date the stock option is exercised exceeds the exercise price (as adjusted in accordance with its terms). The stock options granted in 2012 vest over two years in 50% annual increments, based on the achievement of a pre-established net revenue performance goal and the executive’s continued employment through such vesting date, and expire ten years from the grant date. More information regarding other stock option grants to the named executive officers appears in the Outstanding Equity Awards at Fiscal Year-End Table under “Executive Compensation Tables” below.

 

33


Table of Contents

Proxy Statement 2012 - Cablevision

 

Retention Awards

In connection with entering into his employment agreement with the Company on December 21, 2009, Mr. Rutledge received a special retirement benefit in the form of a $15,000,000 deferred compensation award. See “— Employment Agreements”. In connection with Mr. Rutledge’s resignation in December 2011, this award together with the earnings therein was transferred to a trust for Mr. Rutledge’s behalf and will be paid out to him from the trust on June 20, 2012.

Other Awards in Prior Years

Our former executive compensation program also included special retention incentives called deferred compensation awards. Although the Company referred to these awards as “deferred compensation awards,” we do not believe that they constitute “deferred compensation” under Section 409A of the Internal Revenue Code. These awards were generally made to executive officers and other members of management. The purpose of these deferred compensation awards was to attract and retain senior executives. The named executive officers other than Charles F. Dolan and Gregg G. Seibert received these awards in October 2004. Charles F. Dolan received a deferred compensation award in November 2005 with economics and vesting designed to give him the same economics and rights as if he had received the award at the same time as the other recipients.

The deferred compensation awards contemplated an initial award amount for each recipient of $500,000. Each year, on the anniversary date of the award, the award amount grew by an additional amount equal to the lesser of 20% of the individual’s annual base salary in effect at that time and $150,000. In addition, the award amount was increased by quarterly interest, at an annual interest rate equal to the average of the one-year LIBOR fixed-rate equivalent for the ten business days immediately preceding October 1st of each year. The deferred compensation award was payable in installments: 50% of the then-current award amount was payable on the fifth anniversary of the effective date of the award (October 2009 for the named executive officers), and the balance of the then-current award amount was payable on the seventh anniversary of the effective date (October 2011) so long as the recipient continued to be an employee of the Company through those dates. All award amounts have been paid out. Information regarding the deferred compensation awards of the named executive officers is set forth in the Summary Compensation Table under “Executive Compensation Tables” below.

Benefits

Benefits offered to executive officers generally provide for retirement income and serve as a safety net against hardships that can arise from illness, disability or death. The executive officers are eligible to participate in the same health and welfare benefit plans made available to the other benefits-eligible employees of the Company, including, for example, medical, dental, vision, life insurance and disability coverage. In addition to the standard life insurance

 

34


Table of Contents

Proxy Statement 2012 - Cablevision

 

available to all employees (based on a multiple of base salary, up to a $4,000,000 cap on the total amount of life insurance), the Company purchased whole life insurance policies for certain current and former senior executives of the Company, including Messrs. Charles F. Dolan and James L. Dolan. The policies originally provided coverage (before the application of any dividends to purchase increased insurance) in the amount of the greater of three times the individual’s annual base salary as in effect in 1996 or the death benefit provided under previous policies. As of each respective policy’s 2011 anniversary date, the policies provided estimated death benefits for these executives in the following amounts: Charles F. Dolan — $3,494,781 and James L. Dolan — $1,828,287. Based on current projections, the Company believes the policies are fully funded and the Company does not anticipate the need to make any additional premium payments. The expected death benefits are expected to grow over time to the extent that the dividends payable on the policy values exceed the premiums required to fund the death benefit. Information regarding premiums paid by the Company with respect to each of the executive officers is set forth in the Summary Compensation Table under “Executive Compensation Tables” below. Information regarding premiums paid by the Company is set forth in the Summary Compensation Table under “Executive Compensation Tables” below.

Defined Benefit Plans

The Company maintains the Cablevision Cash Balance Pension Plan, a tax qualified defined benefit plan, for participating employees, including executive officers. Under the Company’s Excess Cash Balance Plan, a non-qualified deferred compensation plan, the Company provides additional benefits to employees who are restricted by the applicable Internal Revenue Service (“IRS”) annual compensation limitation.

The Company’s Nonqualified Supplemental Benefit Plan provides actuarially determined pension benefits for certain employees of the Company or its subsidiaries and affiliates who were previously employed by CSSC, L.L.C., which is wholly owned by Charles F. Dolan and his spouse. There are only two remaining active employees of the Company who accrue benefits under this plan, only one of whom is a named executive officer, Charles F. Dolan.

More information regarding the Cash Balance Pension Plan, the Excess Cash Balance Plan and the Nonqualified Supplemental Benefit Plan is provided with the Pension Benefits Table under “Executive Compensation Tables” below.

Defined Contribution Plans

Under the Cablevision 401(k) Savings Plan (the “401(k) Plan”), a tax-qualified retirement savings plan, participating employees, including executive officers, may contribute into their plan accounts a percentage of their eligible pay on a before-tax basis as well as a percentage of their eligible pay on an after-tax basis. The Company matches 50% of the first 6% of eligible pay contributed by participating employees. The Company matching contributions are subject to vesting limitations for the first three years of employment.

 

35


Table of Contents

Proxy Statement 2012 - Cablevision

 

In addition, the Company offers an Excess Savings Plan, a non-qualified deferred compensation plan, to employees who are restricted by the applicable IRS annual compensation limitation and/or the pre-tax income deferral limitation. More information regarding the Excess Savings Plan is provided with the Nonqualified Deferred Compensation Table under “Executive Compensation Tables” below.

The Company’s Nonqualified Supplemental Benefit Plan also includes a defined contribution component. The Company provides allocations to the participant’s notional accounts. There are only two remaining active employees of the Company who accrue benefits under this plan, only one of whom is a named executive officer, Charles F. Dolan.

Matching contributions made by the Company under the 401(k) Plan and the Excess Savings Plan and allocations under the defined contribution portion of the Nonqualified Supplemental Benefit Plan on behalf of the named executive officers are set forth in the Summary Compensation Table under “Executive Compensation Tables” below.

Perquisites

The Company provides certain perquisites to executive officers as described below. The aggregate value of perquisites received by each of the named executive officers is set forth in the Summary Compensation Table under “Executive Compensation Tables” below.

Telecommunications Services

The Company’s perquisites include access to telecommunications services (cable television, high-speed data and voice) at no monthly cost to employees, including executive officers, living in the Company’s service area. Certain employees living outside the service area are eligible for reimbursement of certain costs in purchasing similar services. The services provided vary depending on the grade level of the employee.

Executive Security

In order to address the security concerns of the Company, we have established an executive security program for the protection of the named executive officers. Recommendations of a third party security expert have been implemented for office, home and travel, at the Company’s cost, to the extent approved by the Compensation Committee. Because certain of these costs can be viewed as conveying personal benefits to the named executive officers, they are reported as perquisites.

Car and Driver

In connection with our executive security program, Messrs. Charles F. Dolan and James L. Dolan each has a Company car and driver assigned to them on a full-time basis, which they are permitted to use for their personal use in addition to business purposes. In addition, certain executive officers and members of management have used Company cars and drivers on a limited basis for personal use.

 

36


Table of Contents

Proxy Statement 2012 - Cablevision

 

To the extent employees use Company-provided car service for personal use those employees are imputed compensation for tax purposes. For compensation reporting purposes, the benefit attributable to the personal use of Company cars is valued at a portion of the cost of the driver plus car maintenance, fuel and other related costs, based on an estimated percentage of use.

Aircraft

The Company owns and operates three passenger helicopters and leases and operates a jet to facilitate business travel of senior executives. As described under “Related Party Policy and Certain Transactions — Certain Other Transactions,” the Company also has two separate dry lease agreements with entities controlled by Charles F. Dolan or other members of the Dolan family pursuant to which the Company has the right to use fixed-wing aircraft operated by such entities.

Generally, Messrs. Charles F. Dolan and James L. Dolan are permitted to use the helicopters and the jet for personal travel. In addition, certain other executive officers and other members of management are permitted to use the helicopters and the jet for personal travel upon the approval of the Chief Executive Officer or his designee. Messrs. Thomas M. Rutledge (prior to his departure from the Company), Gregg G. Seibert and David G. Ellen are permitted to use the Company jet (or in certain limited circumstances with the approval of the Company), other aircraft owned by entities controlled by Charles F. Dolan or other members of the Dolan family which the Company has the right to use) for up to 50 flight hours annually for Mr. Rutledge, 35 hours annually for Mr. Seibert and 15 hours annually for Mr. Ellen, for personal travel. Personal use of the helicopters has primarily been for purposes of commutation. From time to time, the Company also provides car service to Messrs. Gregg G. Seibert and David G. Ellen for purposes of transportation to and from the heliport.

To the extent any employee uses any of the aircraft for personal travel without reimbursement, they are imputed compensation for tax purposes based on the Standard Industry Fare Level rates that are published biannually by the IRS. For compensation reporting purposes, we valued the incremental cost of the personal use of the aircraft based on the variable costs incurred by the Company net of reimbursements received from executives. The incremental cost of the use of the aircraft does not include any costs that would have been incurred by the Company whether or not the personal trip was taken, such as lease and insurance payments, pilot salaries and other overhead costs.

In connection with any personal travel on the Company jet, Charles F. Dolan and James L. Dolan reimburse the Company for the actual expenses of each specific flight at the maximum amount the Company may legally charge under Part 91 of the Federal Aviation Regulations.

In connection with any personal travel on the Company jet (or on aircraft operated by entities controlled by Charles F. Dolan or other members of the Dolan family), Thomas M. Rutledge (prior to his departure from the Company), Gregg G. Seibert and David G. Ellen reimburse the Company for the actual expenses of each specific flight at a rate no greater than the maximum

 

37


Table of Contents

Proxy Statement 2012 - Cablevision

 

amount the Company may legally charge under Part 91 of the Federal Aviation Regulations. Mr. Rutledge was not required to reimburse the Company for use of the helicopters for commuting purposes.

Other

Certain of the named executive officers have, from time to time, used the Company’s travel department to make their personal travel arrangements. For compensation reporting purposes, we valued the incremental cost of personal use of the travel department as a portion of the cost of the travel department employees and related overhead, based on the time spent making the arrangements.

From time to time, senior executives have access to tickets to sporting events and other entertainment at Madison Square Garden, at no cost. In 2012, the Company reimbursed Messrs. Charles F. Dolan and James L. Dolan in the amounts of $280,000 and $125,000, respectively, for costs incurred related to filings made under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR”) triggered by awards granted under the Company’s executive compensation programs.

Post-Termination Compensation

Our executives have helped build the Company into the successful enterprise that it is today and we believe that post-termination benefits are integral to the Company’s ability to attract and retain qualified executives.

Under certain circumstances, payments or other benefits may be provided to employees upon the termination of their employment with the Company. The amount and type of any payment or benefit will depend upon the circumstances of the termination of employment. These may include termination by the Company without cause, termination by the employee for good reason, other voluntary termination by the employee, retirement, death, disability, or termination following a change in control of the Company or following a going-private transaction. The definitions of “cause” and “good reason” vary among the different employment agreements with the named executive officers and the award agreements.

The award agreements regarding the various long-term incentives also address employment termination events, including the circumstances upon which vesting, payment and/or forfeiture of all or a portion of the long-term incentives may be accelerated. If an executive’s employment agreement refers to the treatment of any award upon a triggering event, the particular award agreement will not supersede the terms of the employment agreement unless otherwise provided in the employment agreement or the award agreement.

Mr. Charles F. Dolan’s employment agreement addresses post-termination benefits only in the event of death or disability. In the employment agreements for Messrs. James L. Dolan, Huseby (prior to his departure), Seibert and Ellen, severance benefits include, in addition to

 

38


Table of Contents

Proxy Statement 2012 - Cablevision

 

certain cash payments, the acceleration of certain long-term incentives under various circumstances. For Mr. Charles F. Dolan, the treatment of his long-term incentives in the event of termination is governed solely by the specific provisions of his award agreements.

The Cablevision CHOICE Severance Pay Plan provides for the discretionary payment of severance benefits under certain circumstances. Under the severance plan, the Company has discretion to determine (1) under what conditions severance benefits will be made available to any employee, (2) the type and amount of severance benefits to be paid or provided and for what period of time, (3) the manner and form in which severance benefits will be paid or provided to any employee and (4) any other terms and conditions for receiving severance benefits. All severance benefits payable under this severance plan would be conditioned on the employee executing a severance agreement with the Company, including any terms and conditions that the Company may require.

Under the Cablevision Systems Corporation Supplemental Life Insurance Premium Payment Policy, at all times following a change of control of the Company (as defined below under “Executive Compensation Tables — Termination and Severance — Award Agreements”), the Company would continue to pay on behalf of certain senior executives of the Company, including Messrs. Charles F. Dolan and James L. Dolan, all premiums on life insurance policies purchased by the Company for these executive officers, up to the aggregate amount of additional premiums, if any, necessary to fund fully the face amount of each senior executive’s policy equal to the greater of three times the executive’s annual base salary as in effect in 1996 or the death benefit provided under previous policies. This policy is also provided for in the employment agreement of Mr. James L. Dolan, as described below under “Employment Agreements”.

For a description and quantification of the severance and other benefits payable to each of the named executive officers under the different circumstances of termination, please see “Termination and Severance” under “Executive Compensation Tables” below.

Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code, as amended, establishes a $1 million limit on the amount that a publicly held corporation may deduct for compensation paid to the chief executive officer and the next three most highly paid named executive officers (other than the chief financial officer) in a taxable year. This limitation does not apply to any compensation that is “qualified performance-based compensation” under Section 162(m), which is defined as compensation paid in connection with certain stock options or that is paid only if the individual’s performance meets pre-established objective goals based on performance criteria established under a plan approved by stockholders. Our short-term and long-term incentive compensation plans are generally designed to qualify for this exemption from the deduction limitations of Section 162(m) and to be consistent with providing appropriate compensation to executives.

 

39


Table of Contents

Proxy Statement 2012 - Cablevision

 

From time to time, to the extent it deems appropriate, the Compensation Committee may make awards (or modifications to awards) that would not qualify for an exemption from Section 162(m). For example, we expect that, for 2011, the amount of base salary in excess of $1 million for the Chief Executive Officer and President and the next three most highly paid named executive officers, plus any other annual compensation paid or imputed to the Chief Executive Officer and President and the next three most highly paid named executive officers covered by Section 162(m) that causes their respective non-performance-based compensation to exceed the $1 million limit, will not be deductible by the Company for federal income tax purposes.

Although it is the Company’s intent generally to qualify compensation for the exemption from the deduction limitations, we believe that it is in the best interests of the Company’s stockholders to allow the Compensation Committee the flexibility and discretion to design an appropriate executive compensation program so that the Company can attract, retain and motivate our executives, notwithstanding Section 162(m).

REPORT OF COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on such review and discussions, we have recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 for filing with the Securities and Exchange Commission.

 

Members of the Compensation Committee
Vincent Tese   

Thomas V. Reifenheiser

   John R. Ryan

 

40


Table of Contents

Proxy Statement 2012 - Cablevision

 

EXECUTIVE COMPENSATION TABLES

The tables below reflect the compensation of the Company’s named executive officers. See “Compensation Discussion and Analysis” beginning on page 21 for an explanation of our compensation philosophy and program.

Summary Compensation Table

The table below summarizes the total compensation paid to or earned by each of our named executive officers for the years ending December 31, 2009, 2010 and 2011 (other than for Mr. Ellen and Ms. Salhus for whom information is provided for the year ending December 31, 2011).

 

Name and Principal
Position
  Year     Salary
($)(1)
    Bonus
($)(2)
    Stock
Awards
($)(3)
    Option
Awards
($)(4)
    Non-Equity
Incentive Plan
Compensation
($)(5)
    Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(6)
    All Other
Compensation
($)(7)
   

Total

($)

 

Charles F. Dolan

    2011        1,664,000        1,033,606        2,866,340        0        4,723,708        286,663        392,072        10,966,389   

Chairman

    2010        1,664,000        0        3,000,000        0        8,366,016        274,004        469,547        13,773,567   
    2009        1,664,000        717,616        1,696,768        2,930,789        7,357,462        539,188        1,099,631        16,005,454   

James L. Dolan

    2011        1,750,000        1,033,606        2,844,680        0        5,339,374        201,445        276,123        11,445,228   

Chief Executive Officer and President

    2010        1,500,000        0        2,815,000        0        8,647,382        123,608        358,309        13,444,299   
    2009        1,872,000        717,616        1,731,584        2,991,067        8,457,281        215,020        1,159,092        17,143,660   
                                                                       

Gregg G. Seibert

    2011        1,500,000        0        1,963,840        0        2,684,134        112,352        258,035        6,518,361   

Executive Vice President and Chief Financial Officer

    2010        1,200,000        0        844,800        0        1,572,484        79,378        138,480        3,835,142   
    2009        800,000        0        395,264        2,479,103        0        0        153,184        3,827,551   
                 
                                                                       

David G. Ellen

    2011        850,000        891,822        866,400        0        1,017,758        51,956        117,961        3,795,897   

Executive Vice President and General Counsel

                                                                       

Victoria D. Salhus

    2011        515,000        761,771        245,480        0        497,480        66,145        34,888        2,120,764   

Senior Vice President, Deputy General Counsel and Secretary

                                                                       

Thomas M. Rutledge*

    2011        1,740,000        1,033,606        2,610,030        0        4,850,990        267,561        12,686,450        23,188,637   

Former Chief Operating Officer

    2010        1,740,000        0        13,778,400        0        8,754,519        140,478        3,801,911        28,215,308   
    2009        1,638,000        8,467,616        1,546,240        2,669,803        10,468,083        175,402        1,178,953        26,144,097   

Michael P. Huseby*

    2011        564,731        824,753        805,030        0        929,025        107,817        4,055,817        7,287,173   

Former Executive Vice President and Chief Financial Officer

    2010        1,020,000        0        844,800        0        2,472,506        77,393        215,609        4,630,308   
    2009        988,000        717,616        477,184        823,032        2,102,132        91,377        344,925        5,544,266   
                 
                 

 

* Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

41


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(1) For 2011, salaries paid to the named executive officers accounted for the following percentages of their total compensation: Mr. Charles F. Dolan — 15%; Mr. James L. Dolan — 15%; Mr. Gregg G. Seibert — 23%, David G. Ellen — 22%, Ms. Victoria D. Salhus — 24%, Mr. Thomas M. Rutledge — 8%; and Mr. Michael P. Huseby — 8%.

For 2010, salaries paid to the named executive officers accounted for the following percentages of their total compensation: Mr. Charles F. Dolan — 12%; Mr. James L. Dolan — 11%; Mr. Seibert — 31%; Mr. Rutledge — 6%; and Mr. Huseby — 22%.

For 2009, salaries paid to the named executive officers accounted for the following percentages of their total compensation: Mr. Charles F. Dolan — 10%; Mr. James L. Dolan — 11%; Mr. Seibert — 21%; Mr. Rutledge — 6%; and Mr. Huseby — 18%.

 

(2) This column reflects the portion of the deferred compensation award paid out on the seventh anniversary of such award in accordance with its terms. Mr. Huseby received his payment in January 2012 per his separation agreement. For Mr. Rutledge the 2009 amount also reflects a one-time cash retention award of $7,750,000 paid in accordance with his 2009 employment agreement.

 

(3) This column reflects the aggregate grant date fair value of restricted stock awards granted to the named executive officers in 2009, 2010 and 2011. For 2010, the column also reflects a one-time special stock award for Mr. Rutledge in accordance with his 2009 employment agreement.

 

(4) This column reflects the aggregate grant date fair value of stock option awards granted to the named executive officers. No stock options were awarded in 2010 or 2011. The assumptions used by the Company in calculating these amounts are set forth in Note 16 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

 

(5) For 2011, this information reflects annual incentive awards paid for performance in 2011, and performance awards granted in 2009 that were earned at the end of 2011, as follows: Mr. Charles F. Dolan, $2,967,328 and $1,756,380, respectively, Mr. James L. Dolan, $3,546,904 and $1,792,470, respectively, Mr. Gregg G. Seibert, $2,275,114 and $409,020, respectively, Mr. David G. Ellen, $817,258 and $200,500, respectively, Ms. Victoria D. Salhus, $305,000 and $192,480, respectively, Mr. Rutledge, $3,251,000 and $1,599,990, respectively, Mr. Huseby, $518,000 and $411,025, respectively. Mr. Rutledge and Mr. Huseby were paid a pro-rata portion of their 2011 annual incentive award.

For 2010, this information reflects annual incentive awards paid for performance in 2010, and performance awards granted in 2008 that were earned at the end of 2010, as follows: Mr. Charles F. Dolan, $4,289,376 and $4,076,640, respectively, Mr. James L. Dolan, $4,570,742 and $4,076,640, respectively, Mr. Rutledge, $5,115,639 and $3,638,880, respectively and Mr. Huseby, $1,350,746 and $1,121,760, respectively. For Mr. Seibert this information reflects an annual incentive award for performance in 2010.

For 2009, this information reflects annual incentive awards paid for performance in 2009, and performance awards granted in 2007, earned at the end of 2009, as follows: Mr. Charles F. Dolan, $3,577,522 and $3,779,940, respectively, Mr. James L. Dolan, $4,599,671 and $3,857,610, respectively, and Mr. Huseby, $1,092,422 and $1,009,710, respectively. For Mr. Rutledge this information reflects annual incentive awards for performance in 2009 and performance awards granted in 2007, earned at the end of 2009, and a performance retention award granted in 2002 and paid in January 2009 as follows: $4,024,713, $3,443,370 and $3,000,000, respectively.

 

(6) This column represents, for each individual, the sum of the increase in the present value of his or her accumulated cash balance pension plan account and accumulated excess cash balance account. In addition, for Mr. Charles F. Dolan only, it also includes the increase in the lump sum value of the defined benefit plan portion of the Company’s Nonqualified Supplemental Benefit Plan. There were no above-market earnings on nonqualified deferred compensation. For more information regarding the named executive officers’ pension benefits, please see the Pension Benefits Table below.

 

42


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(7) The table below shows the components of this column:

 

Name   Year    

Supple-

mental

Benefit

Plan(a)

   

401(k)

Plan

Match(b)

   

Excess

Savings

Plan
Match(b)

   

Deferred

Compen-

sation

Awards(c)

    Dividends(d)     Perquisites(e)     Termination
Related
Payments(f)
    Total  

Charles F. Dolan

    2011      $ 49,000      $ 4,400      $ 45,520             $ 135,840      $ 157,312             $ 392,072   
    2010      $ 49,000      $ 4,400      $ 45,520      $ 159,098      $ 59,700      $ 151,829             $ 469,547   
      2009      $ 46,000      $ 4,400      $ 45,461      $ 195,876      $ 665,200      $ 142,694             $ 1,099,631   

James L. Dolan

    2011             $ 2,640      $ 49,572             $ 135,840      $ 88,071             $ 276,123   
    2010             $ 2,640      $ 42,751      $ 159,098      $ 60,900      $ 92,920             $ 358,309   
      2009             $ 2,640      $ 53,454      $ 195,876      $ 665,200      $ 241,922             $ 1,159,092   

Gregg G. Seibert

    2011             $ 6,600      $ 38,054                    $ 213,381             $ 258,035   
    2010             $ 6,600                           $ 131,880             $ 138,480   
      2009                                         $ 153,184             $ 153,184   

David G. Ellen

    2011             $ 1,980      $ 23,347             $ 11,040      $ 81,594             $ 117,961   

Victoria D. Salhus

    2011             $ 7,333      $ 8,099             $ 11,040      $ 8,416             $ 34,888   

Thomas M. Rutledge*

    2011             $ 7,350      $ 44,850             $ 267,050      $ 313,197      $ 12,054,003      $ 12,686,450   
    2010             $ 7,350      $ 44,744      $ 3,292,100      $ 169,410      $ 288,307             $ 3,801,911   
      2009             $ 7,350      $ 41,732      $ 283,279      $ 554,320      $ 292,272             $ 1,178,953   

Michael P. Huseby*

    2011             $ 7,350      $ 9,655             $ 37,440      $ 7,572      $ 3,993,800      $ 4,055,817   
    2010             $ 7,350      $ 19,347      $ 159,098      $ 15,960      $ 13,854             $ 215,609   
    2009             $ 7,350      $ 18,546      $ 195,876      $ 110,880      $ 12,273             $ 344,925   

 

* Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(a) This column represents the allocation credited to Mr. Charles F. Dolan pursuant to the defined contribution portion of the Company’s Nonqualified Supplemental Benefit Plan.

 

(b) These columns represent, for each individual, a matching contribution by the Company on behalf of such individual under the Company’s 401(k) Plan or Excess Savings Plan, as applicable.

 

(c) For Mr. Charles F. Dolan, Mr. James L. Dolan, Mr. Thomas M. Rutledge and Mr. Michael P. Huseby, this column represents, the following amounts allocated under their respective deferred compensation awards: a notional contribution of $150,000 and notional interest $45,876 in 2009 and $9,098 in 2010. For more information regarding these deferred compensation awards, see “Compensation Discussion and Analysis — Elements of In-Service Compensation — Long-Term Incentives — Other Types of Awards in Prior Years.” In addition, for Mr. Rutledge, the column also reflects the accrued portion at December 31, 2010 of $3,133,002 and $87,403 accrued in 2009 relating to a special retirement benefit in the form of a $15,000,000 deferred compensation award.

 

(d) As a result of the special cash dividend declared in April 2006, and cash dividends declared in August and November 2008 and February, May, July and November 2009, holders of stock options and stock appreciation rights that had vested prior to December 31, 2004 received a cash dividend upon exercise. In October 2009, the Compensation Committee of the Board of Directors approved exercise price adjustments for all dividend eligible stock options and stock appreciation rights so that in the future cash dividends will result in a reduction of the exercise price rather than a cash payment. Holders of restricted shares are entitled to receive a cash amount equal to the dividends when the restricted shares vest. This column represents dividend payments made upon restricted stock vesting in the respective periods.

 

43


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(e) This column represents, for each individual, the following aggregate perquisites, as described in the table below. Car and driver amounts for Charles F. Dolan do not include amounts for car and driver usage by another Dolan family member that were reimbursed by Mr. Dolan. For more information regarding the calculation of these perquisites, please see “Compensation Discussion and Analysis — Elements of In-Service Compensation — Perquisites.”

 

Name    Year      Car and Driver(I)      Aircraft(II)      Other(III)      Total  

Charles F. Dolan

     2011       $ 132,781         *         *       $ 157,312   
     2010       $ 132,061         *         *       $ 151,829   
       2009       $ 123,054         *         *       $ 142,694   

James L. Dolan

     2011       $ 42,284         *       $ 35,160       $ 88,071   
     2010       $ 33,383         *       $ 35,819       $ 92,920   
       2009       $ 88,361       $ 41,397       $ 112,164       $ 241,922   

Gregg G. Seibert

     2011         *       $ 194,317         *       $ 213,381   
     2010         *       $ 128,325         *       $ 131,880   
       2009         *       $ 147,474         *       $ 153,184   

David G. Ellen

     2011         *       $ 70,232         *       $ 81,594   

Victoria D. Salhus

     2011         *         *         *         **   

Thomas M. Rutledge***

     2011         *       $ 293,435         *       $ 313,197   
     2010         *       $ 271,005         *       $ 288,307   
       2009         *       $ 271,698         *       $ 292,272   

Michael P. Huseby***

     2011         *         *         *         **   
     2010         *         *         *       $ 13,854   
     2009         *         *         *       $ 12,273   

 

* Does not exceed the greater of $25,000 or 10% of the total amount of the perquisites of named executive officer.

 

** Does not exceed $10,000.

 

*** Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(I) Reflects the cost of providing the executives with a car and driver for personal use determined as a portion of the cost of the driver plus maintenance, fuel and other related costs, based on an estimated percentage of use.

 

(II) As discussed under “Compensation Discussion and Analysis — Elements of In-Service Compensation — Benefits — Aircraft,” Messrs. Charles F. Dolan, James L. Dolan, Gregg G. Seibert and David G. Ellen reimburse the Company for the actual expenses associated with personal use of the Company’s corporate airplanes. The amounts in the table exclude personal use of aircraft for which the executive provides reimbursement. The amounts in the table reflect the incremental cost of personal use of the Company’s helicopters and for personal guests accompanying the executive when the executive is traveling on business. Incremental cost is determined as the variable costs incurred by the Company net of reimbursements received by executives and does not include any costs that would have been incurred by the Company whether or not the personal trip was taken, such as lease and insurance payments, pilot salaries and other overhead costs. The agreements providing for reimbursement of costs associated with personal use of the Company’s aircraft are described under “Related Party Policy and Certain Transactions.”

 

(III) This column includes the following components: (A) free cable television, high-speed data and voice services; (B) executive home security; and (C) use of the Company’s travel department to arrange for personal travel.

 

44


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(f) Mr. Rutledge’s employment with the Company ended on December 19, 2011. The amount in this column represents the portion of an additional deferred compensation retirement benefit of $15,000,000, plus interest, as provided for in his 2009 employment agreement, that was not previously accrued and reflected in the table. Mr. Huseby’s employment with the Company ended on July 1, 2011. The amount in this column includes for Mr. Huseby an accrued severance payment of $3,993,800.

Grants of Plan-Based Awards

The table below presents information regarding awards granted in 2011 to each named executive officer under the Company’s plans, including estimated possible and future payouts under non-equity incentive plan awards and other restricted stock and stock option awards. There were no stock options granted in 2011.

 

Name   Year     Grant
Date
    Estimated Future Payouts Under Non-
Equity Incentive Plan Awards
    All
Other
Stock
Awards:
Number
of
Shares
of Stock
or
Units(#)
    All Other
Option
Awards:
Securities
Underlying
Options(#)
 

Exercise
or Base
Price of
Option
Awards

($/Sh)

 

Grant Date
Fair Value
of Stock
and
Option
Awards

($)(1)

 
      Threshold($)     Target($)     Maximum($)          

Charles F. Dolan

    2011        03/08/11 (2)        2,912,000        5,824,000           
    2011        03/08/11 (3)            79,400            2,866,340   
      2011        03/08/11 (4)      2,190,000        4,380,000        8,760,000                           

James L. Dolan

    2011        03/08/11 (2)        3,500,000        7,000,000           
    2011        03/08/11 (3)            78,800            2,844,680   
      2011        03/08/11 (4)      2,175,000        4,350,000        8,700,000                           

Gregg G. Seibert

    2011        03/08/11 (2)        2,250,000        4,500,000           
    2011        03/08/11 (3)            54,400            1,963,840   
      2011        03/08/11 (4)      1,500,000        3,000,000        6,000,000                           

David G. Ellen

    2011        03/08/11 (2)        807,500        1,615,000           
    2011        03/08/11 (3)            24,000            866,400   
      2011        03/08/11 (4)      660,000        1,320,000        2,640,000                           

Victoria D. Salhus

    2011        03/08/11 (2)        309,000        618,000           
    2011        03/08/11 (3)            6,800            245,480   
      2011        03/08/11 (4)      125,000        250,000        500,000                           

Thomas M. Rutledge(5)

    2011        03/08/11 (2)        3,480,000        6,960,000           
    2011        03/08/11 (3)            72,300            2,610,030   
      2011        03/08/11 (4)      1,995,000        3,990,000        7,980,000                           

Michael P. Huseby(5)

    2011        03/08/11 (2)        945,900        1,891,800           
    2011        03/08/11 (3)            22,300            805,030   
    2011        03/08/11 (4)      615,000        1,230,000        2,460,000           

 

(1) This column reflects the aggregate grant date fair value calculated by multiplying the closing price of Class A common stock by the number of restricted stock awards granted to each named executive officer in 2011 without any reduction for risk of forfeiture, on the date of grant.

 

(2)

This row reflects the possible payouts with respect to grants of annual incentive awards under the Company’s Cash Incentive Plan for performance in 2011. Each named executive officer is assigned a target bonus percentage and amount; there is no threshold amount for annual incentive awards. Under the terms of the awards, each named executive officer is eligible to receive payment of an annual incentive award equal

 

45


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

to the lesser of $10 million or two times his or her bonus target, subject to the Compensation Committee’s discretion to reduce the award. The amounts of annual incentive awards actually paid for performance in 2011 are disclosed in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. For more information regarding the terms of these annual incentive awards, please see “Compensation Discussion and Analysis — Elements of In-Service Compensation — Annual Incentives.”

 

(3) This row reflects the number of shares of restricted stock awarded in 2011. These grants of restricted stock, which were made under the Company’s 2006 Employee Stock Plan, are scheduled to vest in their entirety on March 8, 2014. The awards to Messrs. Charles F. Dolan, James L. Dolan, Gregg G. Seibert and David G. Ellen were also subject to performance criteria which have been achieved. In accordance with Mr. Rutledge’s and Mr. Huseby’s separation agreements, the restricted stock awarded in 2011 and set forth in this table have been forfeited in their entirety.

 

(4) This row reflects the future payouts with respect to performance awards that were granted under the Company’s Long-Term Incentive Plan in 2011. Each performance award was granted with a target amount, subject to actual payment based on a sliding scale ranging from zero to two times the target amount. These performance awards will be payable in the first quarter of 2014 if the Company achieves specified performance targets in the year ending December 31, 2013. For more information regarding the terms of these performance awards, please see “Compensation Discussion and Analysis — Elements of In-Service Compensation — Long-Term Incentives — Performance Awards.”

 

(5) Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011. In accordance with Mr. Rutledge’s and Mr. Huseby’s separation agreements, the performance awards granted in 2011 and set forth in this table have been forfeited in their entirety.

 

46


Table of Contents

Proxy Statement 2012 - Cablevision

 

Outstanding Equity Awards at Fiscal Year-End

The table below shows (i) each grant of stock options that are still unexercised and outstanding and (ii) the aggregate number of shares of unvested restricted stock outstanding for each named executive officer, in each case as of December 31, 2011.

 

    Option Awards            Stock Awards
Name   Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
    Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
  Option
Exercise
Price($)(3)
    Option
Expiration
Date
    Number
of Shares
or Units
of Stock
That
Have Not
Vested(#)
    Market
Value of
Shares or
Units of
Stock That
Have Not
Vested($)(1)
    Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested(#)
  Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested($)

Charles F. Dolan

  

            370,100 (2)      5,262,822       
    83,334            5.35 (4)(5)      6/25/2013           
    166,666            6.56 (4)      6/25/2013           
    148,800            9.44 (4)      10/1/2014           
    74,400            9.44 (4)      10/1/2014           
    120,000            9.44 (4)      11/8/2015           
    60,000            9.44 (4)      11/8/2015           
    264,000            12.48        6/5/2016           
      589,934        294,966 (6)          6.24        9/5/2014                           

James L. Dolan

              365,200 (7)      5,193,144       
    166,666            6.56 (4)      6/25/2013           
    74,400            9.44 (4)      10/1/2014           
    120,000            6.37 (4)      10/1/2014           
    120,000            9.44 (4)      11/8/2015           
    60,000            9.44 (4)      11/8/2015           
    264,000            12.48        6/5/2016           
      602,067        301,033 (6)          6.24        9/5/2014                           

Gregg G. Seibert

  

            128,200 (8)      1,823,004       
      100,000 (9)        13.23        1/20/2019           
      100,000 (10)        16.53        1/20/2019           
      100,000 (11)        19.85        1/20/2019           
      68,700        68,700 (6)          6.24        9/5/2014                           

David G. Ellen

                                        69,600 (12)      989,712           

Victoria D. Salhus

  

            35,800 (13)      509,076       
    5,000            9.44 (4)      11/8/2015           
      2,500                    6.37 (4)      10/1/2014                           

Thomas M. Rutledge*

  

               
      268,700                    6.24        9/5/2014                           

Michael P. Huseby*

  

    No awards outstanding as of December 31, 2011.                   

 

* Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(1) Calculated using the closing price of Class A common stock on the New York Stock Exchange on December 30, 2011 of $14.22 per share.

 

47


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(2) This reflects (i) a grant of 165,700 shares of restricted stock made on March 5, 2009 that vested on March 5, 2012, (ii) a grant of 125,000 shares of restricted stock made on March 10, 2010 that is scheduled to vest on March 10, 2013, and (iii) a grant of 79,400 shares of restricted stock made on March 8, 2011 that is scheduled to vest on March 8, 2014.

 

(3) The prices of unexercised options were adjusted to reflect the impact of both MSG and AMC Distributions. The MSG Distribution took place in February 2010. The AMC Distribution took place in June 2011. In connection with each Distribution, each outstanding Cablevision stock option became two options, one was an option covering a number of shares of Cablevision Class A Common Stock equal to the number covered by the original option, and one was an option covering one share of MSG/AMC common stock, respectively, for every four shares covered by the original Cablevision option. The existing exercise price was allocated 82.6% to the Cablevision option and 17.4% to the MSG option, and the existing exercise price was allocated 73.6% to the Cablevision option and 26.4% to the AMC option. In each Distribution, each holder of Cablevision restricted shares received one share of MSG/AMC restricted stock, respectively, for every four Cablevision restricted shares.

As of December 31, 2011, (i) Charles F. Dolan held 450,524 MSG stock options (376,781 of which were vested), and 41,425 shares of MSG restricted stock; (ii) James L. Dolan held 427,041 MSG stock options (351,782 of which were vested), and 42,275 shares of MSG restricted stock; (iii) Gregg G. Seibert held 106,175 MSG stock options (14,000 of which were vested), and 9,650 shares of MSG restricted stock; (iv) David G. Ellen held 0 MSG stock options, and 4,750 shares of MSG restricted stock; (v) Victoria D. Salhus held 1,875 MSG stock options (1,875 of which were vested), and 4,550 shares of MSG restricted stock; (vi) Thomas M. Rutledge and Michael P. Huseby did not hold any MSG stock options or MSG restricted stock.

As of December 31, 2011, (i) Charles F. Dolan held 450,524 AMC stock options (376,781 of which were vested) and 92,525 shares of AMC restricted stock; (ii) James L. Dolan held 427,041 AMC stock options (351,782 of which were vested), and 91,300 shares of AMC restricted stock; (iii) Gregg G. Seibert held 92,175 AMC stock options (0 of which were vested), and 32,050 shares of AMC restricted stock; (iv) David G. Ellen held 0 AMC stock options, and 17,400 shares of AMC restricted stock; (v) Victoria D. Salhus held 1,875 AMC stock options (1,875 of which were vested), and 8,950 shares of AMC restricted stock; (vi) Thomas M. Rutledge and Michael P. Huseby did not hold any AMC stock options or AMC restricted stock.

 

(4) As a result of the special dividend declared in April 2006, stock options that had not vested by December 31, 2004 were adjusted to reduce their per share exercise price by the $10.00 amount of the special dividend. The per share exercise price of stock options that had vested by December 31, 2004 were not adjusted for the special dividend and the holders were to receive the special dividend amount upon exercise.

 

(5) In October 2009, the Compensation Committee of the Board of Directors approved exercise price adjustments to reflect the value of quarterly dividends. Exercise prices on dividend eligible options were adjusted for the special dividend and are now also reduced by the amount of quarterly dividends.

 

(6) These stock options, which were granted on March 5, 2009, vested in their entirety on March 5, 2012.

 

(7) This reflects (i) a grant of 169,100 shares of restricted stock made on March 5, 2009 that vested on March 5, 2012, (ii) a grant of 117,300 shares of restricted stock made on March 10, 2010 that are scheduled to vest on March 10, 2013, and (iii) a grant of 78,800 shares of restricted stock made on March 8, 2011 that is scheduled to vest on March 8, 2014.

 

48


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(8) This reflects (i) a grant of 38,600 shares of restricted stock made on March 5, 2009 that vested on March 5, 2012, (ii) a grant of 35,200 shares of restricted stock made on March 10, 2010 that are scheduled to vest on March 10, 2013, and (iii) a grant of 54,400 shares of restricted stock made on March 8, 2011 that is scheduled to vest on March 8, 2014.

 

(9) These stock options, which were granted on January 20, 2009, vested in their entirety on January 20, 2012.

 

(10) These stock options, which were granted on January 20, 2009, are scheduled to vest in their entirety on January 20, 2013.

 

(11) These stock options, which were granted on January 20, 2009, are scheduled to vest in their entirety on January 20, 2014.

 

(12) This reflects (i) a grant of 19,000 shares of restricted stock made on March 5, 2009 that vested on March 5, 2012, (ii) a grant of 26,600 shares of restricted stock made on March 10, 2010 that are scheduled to vest on March 10, 2013, and (iii) a grant of 24,000 shares of restricted stock made on March 8, 2011 that is scheduled to vest on March 8, 2014.

 

(13) This reflects (i) a grant of 18,200 shares of restricted stock made on March 5, 2009 that vested on March 5, 2012, (ii) a grant of 10,800 shares of restricted stock made on March 10, 2010 that are scheduled to vest on March 10, 2013, and (iii) a grant of 6,800 shares of restricted stock made on March 8, 2011 that is scheduled to vest on March 8, 2014.

Option Exercises and Stock Vested

The table below shows stock option exercises during 2011 and restricted stock awards that vested during 2011.

 

     Option Exercises      Restricted Stock  
Name    Number of Shares
Acquired on
Exercise
     Value Realized on
Exercise ($)(1)
     Number of Shares
Acquired on
Vesting
     Value Realized on
Vesting ($)
 

Charles F. Dolan

                       113,200         4,204,248 (2)(4) 

James L. Dolan

                       113,200         4,204,248 (2)(4) 

Gregg G. Seibert

                                   

David G. Ellen

     15,000         361,575         9,200         341,688 (2)(4) 

Victoria D. Salhus

                       9,200         341,688 (2)(4) 

Thomas M. Rutledge*

           101,100         3,754,854 (2)(4) 
                         153,400         2,136,862 (3)(5) 

Michael P. Huseby*

     82,833         2,288,676         31,200         1,158,768 (2)(4) 

 

* Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(1) Calculated using the closing price (per share) of Class A common stock on the New York Stock Exchange on the date of exercise less the option price per share multiplied by the number of options exercised.

 

(2) Calculated using the closing price (per share) of Class A common stock on the New York Stock Exchange on March 3, 2011 multiplied by the number of shares vesting.

 

49


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(3) Calculated using the closing price (per share) of Class A common stock on the New York Stock Exchange on December 15, 2011 multiplied by the number of shares vesting.

 

(4) Dividends of $0.10 per share were declared in August and November 2008, February, May, July, and November 2009 as well as February 2010. Dividends of $0.125 per share were declared in May, August and November 2010 as well as February 2011. All dividends declared were paid in connection with this vesting in addition to the value realized and reflected in the table.

 

(5) Dividends of $0.125 per share were declared in May, August, and November 2010 as well as February 2011. Dividends of $0.15 per share were declared in May, August and October 2011. All dividends declared were paid in connection with this vesting in addition to the value realized and reflected in the table.

Pension Benefits

The table below shows the present value of accumulated benefits payable to each of our named executive officers, including the number of years of service credited to each named executive officer, under our defined benefit pension plans as of December 31, 2011.

 

Name    Plan Name   

Number of Years

Credited Service

(#)(1)

    

Present Value of

Accumulated Benefit

($)(2)

    

Payments During

Last Fiscal Year

($)

 

Charles F. Dolan

   Cablevision Nonqualified         
   Supplemental Benefit Plan      26         3,205,772           
   Cablevision Cash Balance         
   Pension Plan      14         22,050         22,050   
   Cablevision Excess         
     Cash Balance Plan      11         1,741,981           

James L. Dolan

   Cablevision Cash Balance         
   Pension Plan      14         197,190           
   Cablevision Excess         
     Cash Balance Plan      11         1,218,563           

Gregg G. Seibert

   Cablevision Cash Balance         
   Pension Plan      2         36,050           
   Cablevision Excess         
     Cash Balance Plan      2         155,681           

David G. Ellen

   Cablevision Cash Balance         
   Pension Plan      9         82,160           
   Cablevision Excess         
     Cash Balance Plan      9         118,000           

Victoria D. Salhus

   Cablevision Cash Balance         
   Pension Plan      14         245,162           
   Cablevision Excess         
     Cash Balance Plan      11         204,646           

Thomas M. Rutledge*

   Cablevision Cash Balance         
   Pension Plan      9         178,165           
   Cablevision Excess         
     Cash Balance Plan      9         951,269           

Michael P. Huseby*

   Cablevision Cash Balance         
   Pension Plan      6         136,080           
   Cablevision Excess         
   Cash Balance Plan      6         322,500           

 

50


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

* Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(1) Years of service are calculated based on elapsed time measured from date of plan participation. Actual elapsed time for each individual as an employee of the Company are as follows: Mr. Charles F. Dolan, 39 years; Mr. James L. Dolan, 33 years; Mr. Rutledge, 10 years; Mr. Huseby, 7 years; Mr. Seibert, 3 years; Mr. Ellen, 10 years and Ms. Salhus, 21 years.

 

(2) Assumes that each individual will take a lump sum payment of benefits at retirement. The lump sum payment is based on an assumed retirement age of 65 for all individuals other than Mr. Charles F. Dolan. For Mr. Charles F. Dolan, the lump sum payment is based on a December 31, 2011 retirement date. The lump sum payable under the Nonqualified Supplemental Benefit Plan was calculated using an interest rate of 7% and the 1971 Group Annuity mortality table, as required under the terms of the Nonqualified Supplemental Benefit Plan. The lump sum payable under the cash balance plans was determined by crediting the account balances with an assumed interest-crediting rate of 3.11% until age 65. The present value of the accumulated benefits under the Cash Balance Pension Plan and the Excess Cash Balance Plan were calculated using a discount rate of 4.30%. For Mr. Charles F. Dolan, Mr. Thomas M. Rutledge and Mr. Michael P. Huseby, the present value of the accumulated benefits under each of the Cash Balance Pension Plan and the Excess Cash Balance Plan equals the respective December 31, 2011 account balances.

We maintain several retirement benefit plans for our executives. The material terms and conditions are discussed below.

Cash Balance Pension Plan

The Company’s Cash Balance Pension Plan is a tax qualified defined benefit plan that generally covers regular full-time and part-time nonunion employees of the Company and certain of its affiliates who have completed one year of service. A notional account is maintained for each participant under the plan, including the named executive officers, which consists of (i) annual allocations made by the Company as of the end of each year on behalf of each participant who has completed 800 hours of service during the year that range from 3% to 9% of the participant’s compensation, based on the participant’s age and (ii) monthly interest credits based on the average of the annual rate of interest on the 30-year U.S. Treasury Bonds for the months of September, October and November of the prior year. Compensation includes all direct cash compensation received while a participant as part of the participant’s primary compensation structure (excluding bonuses, fringe benefits, and other compensation that is not received on a regular basis), and before deductions for elective deferrals (in accordance with the Internal Revenue Code limits, the maximum compensation taken into account in determining benefits was limited to $245,000 in 2011).

A participant’s interest in the cash balance account is subject to vesting limitations for the first three years of employment. A participant’s account will vest in full upon his or her termination due to death, disability or retirement after attaining age 65. Upon retirement or other termination of employment with the Company, the participant may elect a distribution of the vested portion of the cash balance account. Any amounts remaining in the plan will continue to be credited with interest until the account is paid. The normal form of benefit

 

51


Table of Contents

Proxy Statement 2012 - Cablevision

 

payment for an unmarried participant is a single life annuity and the normal form of benefit payment for a married participant is a 50% joint and survivor annuity. The participant, with spousal consent if applicable, can waive the normal form and elect a single life annuity or a lump sum.

Excess Cash Balance Plan

The Company’s Excess Cash Balance Plan is a non-qualified deferred compensation plan that is intended to provide eligible participants, including each named executive officer, with the portion of their benefit that cannot be paid to them under the Cash Balance Pension Plan due to Internal Revenue Code limits on the amount of compensation (as defined in the Cash Balance Pension Plan) that can be taken into account in determining benefits under tax-qualified plans ($245,000 in 2011). The Company maintains a notional excess cash balance account for each eligible participant, and for each calendar year, credits these accounts with the portion of the allocation that could not be made on his behalf under the Cash Balance Pension Plan due to the compensation limitation. In addition, the Company credits each notional excess cash balance account monthly with interest at the same rate used under the Cash Balance Pension Plan. A participant vests in the excess cash balance account

according to the same schedule in the Cash Balance Pension Plan. The excess cash balance account, to the extent vested, is paid in a lump sum to the participant as soon as practicable following his or her retirement or other termination of employment with the Company.

Nonqualified Supplemental Benefit Plan

Mr. Charles F. Dolan is the only named executive officer who participates in the Company’s Nonqualified Supplemental Benefit Plan. The Nonqualified Supplemental Benefit Plan provides actuarially determined pension benefits for certain employees of the Company or its subsidiaries and affiliates who were previously employed by CSSC, L.L.C., successor to Cablevision Systems Services Corporation (“CSSC”), which is wholly owned by Charles F. Dolan and his spouse, which provided management services to Cablevision Company (the Company’s predecessor) and to certain affiliates of the Company. The Nonqualified Supplemental Benefit Plan was designed to provide participants, in combination with certain qualified benefit plans maintained by the Company and certain qualified retirement plans formerly maintained by CSSC, with the same retirement benefits they would have enjoyed had they remained employees of CSSC and continued to participate in the former CSSC qualified plans. In addition to Mr. Charles F. Dolan, there is only one remaining active employee of the Company who accrues benefits under this plan.

The defined benefit feature of the Nonqualified Supplemental Benefit Plan provides that, upon attaining the later of age 65 or the completion of five years of service, a participant will receive an annual benefit equal to the lesser of (i) 75% of his or her average compensation (not including bonuses and overtime) for his or her three most highly compensated years or (ii) the maximum benefit permitted by the Internal Revenue Code (the maximum in 2011 was $195,000 for employees who retire at age 65), reduced by the amount of any benefits paid to

 

52


Table of Contents

Proxy Statement 2012 - Cablevision

 

the participant under the qualified defined benefit plan formerly maintained by CSSC as well as benefits under the Cash Balance Pension Plan and Excess Cash Balance Plan.

Additional Retirement Benefits

Pursuant to the 2009 employment agreement of Mr. Rutledge, the Company created an additional retirement benefit by establishing a notional $15,000,000 account for Mr. Rutledge in December 2009. The notional balance of the account was increased quarterly by crediting the account with interest based upon one-year LIBOR. Mr. Rutledge was entitled to the full balance of the notional account upon a termination of employment that constitutes a Qualifying Termination of employment. See “— Employment Agreements”. A cash payment equal to the full notional balance was paid into a trust for the benefit of Mr. Rutledge and will be paid out to him from the trust on June 20, 2012. Neither this notional balance nor the interest accruing on the balance is reflected in the Pension Benefit tables.

Nonqualified Deferred Compensation

The table below shows (i) the contributions made by each named executive officer and the Company in 2011, (ii) aggregate earnings on each named executive officer’s account balance in 2011, and (iii) the account balance of each of our named executive officers under our Excess Savings Plan and the Nonqualified Supplement Benefit Plan as of December 31, 2011.

 

Name    Plan Name   

Executive

Contributions

in Last FY(1)

($)

    

Registrant

Contributions

in Last FY(2)

($)

    

Aggregate

Earnings

in Last
FY(3)

($)

    

Aggregate

Withdrawals/

Distributions

($)

    

Aggregate

Balance

at Last
FYE

($)

 

Charles F. Dolan

  

Cablevision Excess Savings Plan

     93,240         45,520         23,838                 1,784,388   
    

Cablevision Nonqualified Supplemental Benefit Plan

             49,000         15,401                 1,185,923   

James L. Dolan

  

Cablevision Excess Savings Plan

     100,463         49,572         14,267                 1,105,674   

Gregg G. Seibert

  

Cablevision Excess Savings Plan

     79,408         38,054         626                 118,088   

David G. Ellen

  

Cablevision Excess Savings Plan

     46,694         23,347         4,112                 335,813   

Victoria D. Salhus

  

Cablevision Excess Savings Plan

     19,865         8,099         3,232                 251,505   

Thomas M. Rutledge*

  

Cablevision Excess Savings Plan

     89,700         44,850         12,785                 997,380   

Michael P. Huseby*

  

Cablevision Excess Savings Plan

     19,311         9,655         1,850                 146,553   

 

* Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011. Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(1) These amounts represent a portion of the executives’ salaries, which are included in the numbers reported in the “Salary” column of the Summary Compensation Table that the executives contributed to the respective plans.

 

53


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(2) These amounts are reported in the “All Other Compensation” column of the Summary Compensation Table. These amounts do not include deferred compensation awards earned in 2011 and included in the Summary Compensation Table under “All Other Compensation” and described in Note 7 to that table.

 

(3) These amounts are not reported in the “All Other Compensation” column of the Summary Compensation Table.

The Cablevision Excess Savings Plan is a non-qualified deferred compensation plan that operates in conjunction with the Company’s tax-qualified 401(k) Plan. An employee is eligible to participate in the Excess Savings Plan for a calendar year if his compensation (as defined in the Cash Balance Pension Plan described above) in the preceding year exceeded (or would have exceeded, if the employee had been employed for the entire year) the IRS limit on the amount of compensation that can be taken into account in determining contributions under tax-qualified retirement plans ($245,000 in 2011) and he makes an election to participate prior to the beginning of the year. An eligible employee whose contributions to the 401(k) Plan are limited as a result of this compensation limit or as a result of reaching the maximum 401(k) deferral limit ($16,500 or $22,000 if age 50 or over, for 2011) can continue to make pre-tax contributions under the Excess Savings Plan of up to 6% of his eligible pay. In addition, the Company will make matching contributions of up to 50% of the first 6% of eligible pay contributed by the employee. A participant is always fully vested in his own contributions and vests in the Company matching contributions over three years from date of hire (subject to full vesting upon death, disability or retirement after attaining age 65). Account balances under the Excess Savings Plan are credited monthly with the rate of return earned by the Stable Value Fund offered as an investment alternative under the 401(k) Plan. Distributions are made in a lump sum as soon as practicable after the participant’s termination of employment with the Company.

In addition to providing defined pension benefits, the Company’s Nonqualified Supplement Benefit Plan has a defined contribution feature. Under this provision, the Company maintains notional supplemental accounts for each participant, and for each calendar year, the Company makes an allocation to these notional accounts in an amount equal to the lesser of 10% of a participant’s eligible plan compensation (as limited by the IRS maximum compensation limitation) and the IRS maximum defined contribution allocation ($49,000 for 2011). Account balances under the Company’s Nonqualified Supplement Benefit Plan are credited monthly with the rate of return earned by the Stable Value Fund offered as an investment alternative under the 401(k) Plan.

Employment Agreements

Charles F. Dolan

Charles F. Dolan has an employment agreement with the Company dated as of January 27, 1986 that automatically renews for successive one-year terms unless terminated by either party at least three months prior to the end of the then existing term. His agreement has been

 

54


Table of Contents

Proxy Statement 2012 - Cablevision

 

automatically extended until January 2013. The agreement provides for annual compensation of not less than $400,000 per year, subject to increase by the Company’s Compensation Committee. Mr. Dolan’s annual salary for 2012 is $1,664,000 and his bonus target is 175%.

Mr. Charles F. Dolan’s employment agreement does not provide for any post-employment benefits in the event of the termination of his employment by him or the Company other than in the case of his death or disability. In the event of Mr. Dolan’s death, his agreement provides for payment to his estate of an amount equal to the greater of one year’s base salary or one-half of the compensation that would have been payable to Mr. Dolan during the remaining term of his agreement. If Mr. Dolan is incapacitated for more than six consecutive months of disability such that he cannot return to employment and discharge his duties under his employment agreement, his agreement provides that the Company may terminate him for incapacity but Mr. Dolan will be entitled to receive his base salary and other employee benefits (including medical insurance) until the end of the remaining term of his agreement. Mr. Dolan’s employment agreement does not address (or provide for any benefits in the event of) termination by the Company without cause, by Mr. Dolan for good reason or termination in connection with retirement, a change in control or a going private transaction.

In December 2008, the Company amended the employment agreement of Mr. Dolan in order to avoid the imposition of an additional tax pursuant to Section 409A. This amendment clarified that the delay of payment of severance will be following the executive’s separation of service (within the meaning of Section 409A). In June 2011, the Company amended the employment agreement of Mr. Dolan to acknowledge Mr. Dolan’s service as Executive Chairman of AMC Networks Inc. The amendments did not change the amount of payments under Mr. Charles F. Dolan’s employment agreement.

James L. Dolan

Mr. James L. Dolan is the Company’s President and Chief Executive Officer and devotes most of his business time to that role. He also serves as the Executive Chairman of MSG and devotes a portion of his business time to that role. In light of Mr. Dolan’s dual responsibilities, on December 24, 2009, the Company and MSG each entered into separate employment agreements with Mr. Dolan. These agreements became effective upon the consummation of the MSG Distribution on February 9, 2010. The agreement between the Company and Mr. Dolan provides for his continued employment as President and Chief Executive Officer of the Company through December 31, 2014 at a minimum annual base salary of $1,500,000 (subject to annual review and potential increase in the discretion of the Compensation Committee) and an annual target bonus equal to 200% of his annual base salary (and a possible range of 0% to 400%) in the discretion of the Compensation Committee. Mr. Dolan’s annual salary for 2012 is $1,750,000 and his bonus target is 200%. It is also expected that Mr. Dolan will continue to be nominated for election as a director of the Company during the period he serves as President and Chief Executive Officer. Under the agreement, Mr. Dolan continues to be eligible to participate in all Company employee benefits and retirement plans

 

55


Table of Contents

Proxy Statement 2012 - Cablevision

 

at the level available to other members of senior management of the Company, subject to meeting the relevant eligibility requirements and the terms of the plans. The Company will also continue to pay the premiums on an existing whole life insurance policy to the extent necessary to provide for payment of the initial targeted death benefit.

Mr. Dolan will also continue to be entitled to participate in the Company’s long-term cash or equity programs. In calendar year 2011, Mr. Dolan was entitled to receive one or more long-term cash and/or equity awards with an aggregate target value of $7,250,000 (less the anticipated annual award amount under his outstanding deferred compensation award), as determined in the discretion of the Compensation Committee and that, although not guaranteed, it is currently expected that long-term cash or equity awards of similar aggregate target values will be made to Mr. Dolan annually.

Any continuing service requirements with respect to outstanding long-term cash and equity awards that were granted to Mr. Dolan prior to the effective date of the agreement will be based solely on his continued services to the Company and its affiliates (other than MSG and its subsidiaries). He and the Company have acknowledged that any cash payable pursuant to any of those awards will be the sole responsibility and liability of the Company and that MSG will have no liability to Mr. Dolan with respect to such cash payable.

If, prior to December 31, 2014 (the “Scheduled Expiration Date”), Mr. Dolan’s employment with the Company is terminated (i) for any reason by him during the thirteenth calendar month following a Change in Control of the Company, (ii) by the Company or (iii) by him for Good Reason and at the time of any such termination, Cause does not exist, then, subject to his execution of the Company’s then standard separation agreement (modified to reflect the terms of the agreement) which separation agreement will include, without limitation, general releases by him as well as non-competition, non-solicitation, non-disparagement, confidentiality and other provisions substantially similar to those set forth in the agreement (a “Separation Agreement”), the Company will provide him with the following benefits and rights:

 

(a) A severance payment in an amount determined at the discretion of the Compensation Committee, but in no event less than two times the sum of his annual base salary and annual target bonus;

 

(b) Continued payment of premiums on an existing whole life insurance policy on his life to the extent necessary to provide for payment of the initial targeted death benefit under such policy after first applying any associated dividends and surrender of paid up additions;

 

(c)

Except as provided otherwise in the employment agreement, each of his outstanding long-term cash performance awards granted under the plans of the Company will immediately vest in full and will be paid to the same extent that other members of senior management receive payment for such awards as determined by the Compensation

 

56


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

Committee (and subject to the satisfaction of any applicable performance objectives) and will be payable at the same time such awards are payable to other members of senior management and in accordance with the terms of the award;

 

(d) Each of his outstanding long-term cash awards (including any deferred compensation awards under the long-term cash awards program) that are not subject to performance criteria granted under the plans of the Company will immediately vest in full and will be payable to Mr. Dolan on the 90th day after the termination of his employment;

 

(e) (i) All of the time based restrictions under the plans of the Company on each of the outstanding restricted stock or restricted stock units granted to him will immediately be eliminated, (ii) payment and deliveries with respect to his restricted stock units that are not subject to performance criteria will be made on the 90th day after the termination of his employment, (iii) the performance based restrictions with respect to his restricted stock and restricted stock units that are subject to performance criteria will lapse when and to the same extent that such restrictions lapse on such awards held by other executive officers as determined by the Compensation Committee (subject to satisfaction of any applicable performance objectives) and (iv) the payment and deliveries with respect to his restricted stock units subject to performance criteria will be made at the same time payment and deliveries are made to other executive officers who hold such restricted stock units and in accordance with the terms of the award;

 

(f) Each of his outstanding stock options will immediately vest and become exercisable and he will have the right to exercise each of those options for the remainder of the term of such option;

 

(g) A prorated annual bonus for the year in which such termination occurred to the same extent that other executive officers receive payment of bonuses for such year as determined by the Compensation Committee in its sole discretion (and subject to the satisfaction of any applicable performance objectives), which pro rata annual bonus will be payable at the same time annual bonuses for such year are payable to other executive officers; and

 

(h) All of his (i) long-term cash performance awards and (ii) the unvested portion of his deferred compensation award, in each such case outstanding on the effective date of the agreement, will be subject to the terms of their respective award agreements and the provisions related to his existing employment agreement.

If Mr. Dolan ceases to be an employee of the Company or any of its affiliates (other than MSG and its subsidiaries) prior to the Scheduled Expiration Date as a result of his death, his estate or beneficiary will be provided with the benefits and rights set forth in (c) through (h) in the preceding paragraph and have such longer period to exercise his then outstanding stock options as may otherwise be permitted under the applicable plan. If he ceases to be an employee of the Company or any of its affiliates (other than MSG and its subsidiaries) prior to

 

57


Table of Contents

Proxy Statement 2012 - Cablevision

 

the Scheduled Expiration Date as a result of his physical or mental disability, he will be provided with the benefits and rights set forth in (b) through (h) of the preceding paragraph.

If after the Scheduled Expiration Date, Mr. Dolan’s employment with the Company is terminated (i) for any reason by him during the thirteenth calendar month following a Change in Control of the Company, (ii) by the Company, (iii) by him for Good Reason or (iv) as a result of his death or disability, and at the time of any such termination described above, Cause does not exist, then, subject to (except in the case of his death) his execution of a Separation Agreement, he or his estate or beneficiary, as the case may be, will be provided with the benefits and rights set forth above in (b) through (h) of the next preceding paragraph.

If, prior to or after the Scheduled Expiration Date, Mr. Dolan ceases to be employed by the Company for any reason other than his being terminated for Cause, he will have three years to exercise outstanding stock options, unless he is afforded a longer period for exercise pursuant to his employment agreement or any applicable award letter. In no event, however, will stock options remain exercisable beyond their regularly scheduled term (except as may otherwise be permitted under the applicable award in the case of death).

Upon the termination of Mr. Dolan’s employment with the Company, except as otherwise specifically provided in the employment agreement, his rights to benefits and payments under the Company’s pension and welfare plans (other than severance benefits) and any outstanding long-term cash or equity awards will be determined in accordance with the then current terms and provisions of such plans, agreements and awards under which such benefits and payments (including such long-term cash or equity awards) were granted.

In this agreement, the Company acknowledges that, in addition to Mr. Dolan’s services pursuant to the agreement, he will simultaneously serve, and is expected to devote a portion of his business time and attention to serving, as Executive Chairman of MSG. The Company recognizes and agrees that his responsibilities to MSG will preclude him from devoting substantially all of his time and attention to the Company’s affairs. The agreement states the Company’s recognition that there may be certain potential conflicts of interest and fiduciary duty issues associated with Mr. Dolan’s dual roles at the Company and MSG and that none of (i) his dual responsibilities at the Company and MSG, (ii) his inability to devote substantially all of his time and attention to the Company’s affairs, (iii) the actual or potential conflicts of interest and fiduciary duty issues that are waived in the Company’s policy concerning matters related to MSG including responsibilities of overlapping directors and officers, or (iv) any actions taken, or omitted to be taken, by him in good faith to comply with his duties and responsibilities to the Company in light of his dual responsibilities to the Company and MSG, will be deemed to be a breach by him of his obligations under the employment agreement nor will any of the foregoing constitute Cause as such term is defined in the employment agreement.

The employment agreement contains certain covenants by Mr. Dolan including a noncompetition agreement that restricts Mr. Dolan’s ability to engage in competitive activities until the first anniversary of the termination of his employment with the Company.

 

58


Table of Contents

Proxy Statement 2012 - Cablevision

 

For purposes of Mr. Dolan’s employment agreement, “Cause” is defined as (1) 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 (2) commission of any act or omission that results in, or may reasonably be expected to result 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.

“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 (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 defined) or (2) after any fiscal year of the Company in which all the systems referred to in clause (1) will 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 and its consolidated subsidiaries, the power to direct the management of the Company or substantially all its assets.

Termination for “Good Reason” in Mr. Dolan’s employment agreement means that (1) without Mr. Dolan’s consent, (A) Mr. Dolan’s base salary or bonus target is reduced, (B) the Company requires that Mr. Dolan’s principal office be located outside of Nassau County or Manhattan, (C) the Company materially breaches its obligations to Mr. Dolan under his employment agreement, (D) Mr. Dolan is no longer the Chief Executive Officer of the Company, (E) Mr. Dolan no longer reports directly to the Chairman of the Board of Directors of the Company, or (F) Mr. Dolan’s responsibilities are materially diminished, (2) Mr. Dolan has given the Company written notice, referring specifically to this definition, that he does not consent to such action, (3) the Company has not corrected such action within 15 days of receiving such notice and (4) Mr. Dolan voluntarily terminates his employment within 90 days following the happening of the action described in subsection (1) of this definition.

Gregg G. Seibert

On March 29, 2011, the Company entered into an employment agreement with Gregg G. Seibert, which replaced his prior employment agreement. The new agreement with Mr. Seibert provides for his continued employment as Executive Vice President of the Company through December 31, 2016 at a minimum annual base salary of $1,500,000 (subject to annual review and potential increase in the discretion of the Compensation Committee) and an annual target bonus equal to 150% of his annual base salary in the discretion of the Compensation Committee. Mr. Seibert also assumed the role of Chief Financial Officer on June 7, 2011. He will also be entitled to participate in future long-term cash and equity programs and arrangements that are made available to similarly situated executives of the Company. In calendar year 2011, Mr. Seibert was entitled to receive one or more long-term cash and/or equity awards with an aggregate target value of $5,000,000, as determined by the Compensation Committee in its discretion.

 

59


Table of Contents

Proxy Statement 2012 - Cablevision

 

Under the agreement, Mr. Seibert continues to be eligible to participate in the Company’s standard employee benefits program, subject to meeting the relevant eligibility requirements, payment of required premiums, and the terms of the plans.

If, prior to December 31, 2016 (the “Scheduled Expiration Date”), Mr. Seibert’s employment with the Company is terminated (i) by the Company without Cause or (ii) by him for Good Reason, then, subject to his execution of a separation agreement with the Company, the Company will provide him with the following benefits and rights:

 

(a) A severance payment in an amount determined at the discretion of the Company, but in no event less than two times the sum of his annual base salary and annual target bonus, 60% of which shall be payable to him on the six-month anniversary of his termination date and 40% of which shall be payable to him on the twelve-month anniversary of his termination date;

 

(b) A prorated annual bonus for the year in which such termination occurred, payable at the same time as such bonuses are paid to similarly situated employees and based on his then current annual target bonus as well as Company and his business unit performance as determined by the Company in its sole discretion, but without adjustment for his individual performance, plus any unpaid annual bonus for the year prior to the year in which such termination occurred;

 

(c) Each of his outstanding long-term cash awards will immediately vest in full (whether or not subject to performance criteria) and shall be payable to him at the at the same time as such awards are paid to other employees of the Company and the payment amount of such award shall be to the same extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to satisfaction of any applicable performance criteria), provided that any more favorable provisions of his existing award agreements will apply to the treatment of such awards following a “going private transaction” (as defined in the award agreements) and following a “change of control” (as defined in the award agreements), his outstanding awards shall be paid at such time as such awards are paid to active employees of the Company, if such time is earlier than they otherwise would have been paid to him;

 

(d)

Each of his outstanding restricted stock or restricted stock unit awards granted to him under the plans of the Company shall continue to vest in accordance with their original vesting schedule and payments or deliveries with respect to his restricted stock and restricted stock units shall be made on the original vesting date (or, in the case of restricted stock units, on the original distribution date), and, in the case of restricted stock, the Company will withhold a portion of such awards in an amount sufficient to fund the minimum statutory tax withholding requirements (including, federal, state and local income and employment taxes) resulting from the recognition of income in respect of such outstanding restricted stock and make a payroll tax contribution in such amount on his behalf and, in the case of restricted stock units, if his termination of employment

 

60


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

occurs on or after October 25th of a particular year, then any such restricted stock units which would otherwise be delivered after termination of his employment during that year will be delivered on the 68th day following his date of termination; and

 

(e) Each of his outstanding stock options under the plans of the Company shall continue to vest in accordance with their original vesting schedule and he will have the right to exercise each of those options for the remainder of the term of such option.

If Mr. Seibert ceases to be an employee of the Company prior to the Scheduled Expiration Date as a result of his death, or his physical or mental disability, and at such time Cause does not exist, then, subject to execution of a Separation Agreement (other than in the case of death), he or his estate or beneficiary will be provided with the benefits and rights set forth in (b), (d) and (e) of the preceding paragraph and each of his outstanding long-term cash awards shall immediately vest in full, whether or not subject to performance criteria and shall be payable on the 90th day after the termination of his employment, provided, that if any such award is subject to any performance criteria, then (i) if the measurement period for such performance criteria had not yet been fully completed, then the payment amount will be at the target amount for such award and (ii) if the measurement period for such performance criteria had already been fully completed, then the payment amount of such award will be to the same extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to the satisfaction of the applicable performance criteria). Notwithstanding the foregoing, if provided for in the applicable stock option, restricted stock or restricted stock unit awards, his restricted stock and restricted stock unit awards will vest in full (and shares subject to restricted stock units will be distributed) at the time of his death.

If after the Scheduled Expiration Date, Mr. Seibert’s employment with the Company is terminated for any reason by him upon at least twelve months written notice, such notice to be effective no earlier than the first day after the Scheduled Expiration Date, and at the time of such termination Cause does not exist, then, subject to his execution of a separation agreement with the Company, he will be provided with the benefits and rights set forth in (b)-(e) of the second preceding paragraph.

Except as otherwise set forth above, upon the termination of Mr. Seibert’s employment with the Company, any outstanding long-term cash or equity awards will be treated in accordance with their terms and Mr. Seibert will not be eligible for severance benefits under any other plan, program or policy of the Company.

The employment agreement contains certain covenants by Mr. Seibert including a noncompetition agreement that restricts Mr. Seibert’s ability to engage in competitive activities until the first anniversary of the termination of his employment with the Company.

For purposes of Mr. Seibert’s employment agreement, “Cause” means his (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

 

61


Table of Contents

Proxy Statement 2012 - Cablevision

 

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. “Good Reason” means that (1) without his written consent, (A) his base salary or annual target bonus (as each may be increased from time to time in the Company’s sole discretion) is reduced, (B) his title (as in effect from time to time) is diminished, (C) he reports directly to someone other than James L. Dolan (or if James L. Dolan is no longer the Chief Executive Officer of the Company, to someone other than the Chairman of the Board of Directors of the Company), (D) the Company requires that his principal office be located outside of Nassau County or the Borough of Manhattan, (E) the Company materially breaches its obligations under the agreement; or (F) his responsibilities as in effect immediately after the date of the agreement, taken together with any additional material responsibilities which are thereafter assigned to him and which are intended to continue at least through the Scheduled Expiration Date, are thereafter materially diminished, (2) he has given the Company written notice that he does not consent to such action, (3) the Company has not corrected such action within 15 days of receiving such notice, and (4) he voluntarily terminates his employment with the Company within 90 days following the happening of the action described in subsection (1) above.

David G. Ellen

On February 1, 2012, the Company entered into a new employment agreement with David G. Ellen which replaced his prior employment agreement. The new agreement with Mr. Ellen provides for his continued employment as Executive Vice President and General Counsel of the Company through December 31, 2016 at a minimum annual base salary of $850,000 (subject to annual review and potential increase in the discretion of the Compensation Committee) and an annual target bonus equal to at least 95% of his annual base salary in the discretion of the Compensation Committee. He will also be entitled to participate in future long-term cash and equity programs and arrangements that are made available to similarly situated executives of the Company. In calendar year 2012, Mr. Ellen will be entitled to receive one or more long-term cash and/or equity awards with an aggregate target value of $2,200,000, as determined by the Compensation Committee in its discretion.

Under the agreement, Mr. Ellen continues to be eligible to participate in the Company’s standard employee benefits program, subject to meeting the relevant eligibility requirements, payment of required premiums, and the terms of the plans.

If, prior to December 31, 2016 (the “Scheduled Expiration Date”), Mr. Ellen’s employment with the Company is terminated (i) by the Company without Cause or (ii) by him for Good Reason, then, subject to his execution of a separation agreement with the Company, the Company will provide him with the following benefits and rights:

 

(a) A severance payment in an amount equal to two times the sum of his annual base salary and annual target bonus, 60% of which shall be payable to him on the six-month anniversary of his termination date and 40% of which shall be payable to him on the twelve-month anniversary of his termination date;

 

62


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(b) A prorated annual bonus for the year in which such termination occurred, payable at the same time as such bonuses are paid to similarly situated employees and based on his then current annual target bonus as well as Company and his business unit performance as determined by the Company in its sole discretion, but without adjustment for his individual performance, plus any unpaid annual bonus for the year prior to the year in which such termination occurred;

 

(c) Each of his outstanding long-term cash awards will immediately vest in full (whether or not subject to performance criteria) and shall be payable to him at the at the same time as such awards are paid to active employees of the Company and the payment amount of such award shall be to the same extent that other similarly situated active executives receive payment as determined by the Compensation Committee (subject to satisfaction of any applicable performance criteria), provided that any more favorable provisions of his existing award agreements will apply to the treatment of such awards following a “going private transaction” (as defined in the award agreements) and provide, further, that following a “change of control” (as defined in the award agreements), his outstanding awards shall be paid at such time as such awards are paid to active employees of the Company, if such time is earlier than they otherwise would have been paid to him;

 

(d) Each of his outstanding restricted stock or restricted stock unit awards granted to him under the plans of the Company shall continue to vest in accordance with their original vesting schedule and payments or deliveries with respect to his restricted stock and restricted stock units shall be made on the original vesting date (or, in the case of restricted stock units, on the original distribution date), and, in the case of restricted stock, the Company will withhold a portion of such awards in an amount sufficient to fund the minimum statutory tax withholding requirements (including, federal, state and local income and employment taxes) resulting from the recognition of income in respect of such outstanding restricted stock and make a payroll tax contribution in such amount on his behalf; and

 

(e) Each of his outstanding stock options under the plans of the Company shall continue to vest in accordance with their original vesting schedule and he will have the right to exercise each of those options for the remainder of the term of such option.

If Mr. Ellen ceases to be an employee of the Company prior to the Scheduled Expiration Date as a result of his death, or his physical or mental disability, and at such time Cause does not exist, then, subject to execution of a Separation Agreement (other than in the case of death), he or his estate or beneficiary will be provided with the benefits and rights set forth in (b), (d) and (e) of the preceding paragraph and each of his outstanding long-term cash awards shall immediately vest in full, whether or not subject to performance criteria and shall be payable on the 90th day after the termination of his employment, provided, that if any such award is subject to any performance criteria, then (i) if the measurement period for such performance

 

63


Table of Contents

Proxy Statement 2012 - Cablevision

 

criteria had not yet been fully completed, then the payment amount will be at the target amount for such award and (ii) if the measurement period for such performance criteria had already been fully completed, then the payment amount of such award will be to the same extent that other similarly situated executives receive payment as determined by the Compensation Committee (subject to the satisfaction of the applicable performance criteria).

Except as otherwise set forth above, upon the termination of Mr. Ellen’s employment with the Company, any outstanding long-term cash or equity awards will be determined in accordance with their terms and Mr. Ellen will not be eligible for severance benefits under any other plan, program or policy of the Company.

The employment agreement contains certain covenants by Mr. Ellen including a noncompetition agreement that restricts Mr. Ellen’s ability to engage in competitive activities until the first anniversary of the termination of his employment with the Company.

For purposes of Mr. Ellen’s employment agreement, “Cause” means his (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. “Good Reason” means that (1) without his written consent, (A) his base salary or annual target bonus (as each may be increased from time to time in the Company’s sole discretion) is reduced, (B) his title (as in effect from time to time) is diminished, (C) he reports directly to someone other than the Chief Executive Officer of the Company, (D) the Company requires that his principal office be located outside of Nassau County or the Borough of Manhattan, (E) the Company materially breaches its obligations under the agreement; or (F) his responsibilities as in effect immediately after the date of the agreement are thereafter materially diminished, (2) he has given the Company written notice that he does not consent to such action, (3) the Company has not corrected such action within 15 days of receiving such notice, and (4) he voluntarily terminates his employment with the Company within 90 days following the happening of the action described in subsection (1) above.

Thomas M. Rutledge

Effective December 19, 2011, Mr. Rutledge resigned from the Company and he ceased to be the Chief Operating Officer of the Company. Pursuant to the terms of his December 2009 employment agreement, Mr. Rutledge received in respect of 2011 his annual base salary of $1,740,000 and a prorated bonus of $3,251,000. Under his employment agreement, he was entitled to receive in 2012: (i) the balance in a notional retirement account provided for in his 2009 employment agreement, of which $11,699,028 had not been previously-earned and accrued in a prior year and (ii) $1,599,990 representing the prorated value of his 2009 performance award. His outstanding options which were vested at the time of his separation will remain exercisable in accordance with their terms until September 5, 2014. As contemplated by his employment agreement, Mr. Rutledge entered into a separation

 

64


Table of Contents

Proxy Statement 2012 - Cablevision

 

agreement with the Company which confirmed the foregoing arrangements and which did not provide any additional severance payments. The separation agreement also contained the covenants of Mr. Rutledge with respect to confidentiality, non-competition, non-disparagement, non-solicitation of employees and further cooperation that were required under his employment agreement. See “Termination and Severance — Benefits Payable As a Result of Termination of Employment by Employee for Good Reason.”

Michael P. Huseby

Effective July 1, 2011, Mr. Huseby resigned from the Company and he ceased to be the Chief Financial Officer of the Company as of June 7, 2011 and an Executive Vice President as of July 1, 2011. Pursuant to the terms of his May 2010 employment agreement, Mr. Huseby received in respect of 2011 his prorated annual base salary of $1,051,000 and a prorated bonus of $518,000. Under his employment agreement, he will also receive in 2012: (i) a severance payment of $3,993,800, (ii) $411,025 representing the prorated value of his 2009 performance award and (iii) $824,753 representing the prorated value of his outstanding deferred compensation award. As contemplated by his employment agreement, Mr. Huseby entered into a separation agreement with the Company which confirmed the foregoing arrangements and which did not provide any severance payments beyond those provided for in his employment agreement. The separation agreement also contained the covenants of Mr. Huseby with respect to confidentiality, non-competition, non-disparagement, non-solicitation of employees and further cooperation that were required under his employment agreement. See “Termination and Severance — Benefits Payable As a Result of Termination of Employment by the Company Without Cause.”

Termination and Severance

As described in “Compensation Discussion and Analysis — Post-Termination Compensation”, payments may be made to employees upon the termination of their employment with the Company depending upon the circumstances of their termination, which include termination by the Company without cause, termination by the employee for good reason, other voluntary termination by the employee, retirement, death, disability, or termination following a change in control of the Company or following a going-private transaction.

Generally, for the named executive officers, their employment agreements address some of these circumstances. For a description of termination provisions in the employment agreements, see “— Employment Agreements” above. In addition, the award agreements for the long-term incentives also address some of these circumstances. If an employment agreement provides for the treatment of any award upon the termination of employment, the terms of any applicable award agreements will not supersede the terms of the employment agreement unless otherwise provided in the employment agreement or the award agreement.

 

65


Table of Contents

Proxy Statement 2012 - Cablevision

 

Award Agreements

Under the applicable award agreements, vesting of restricted stock and stock options granted to employees, including the named executive officers, may be affected upon a “change of control” of the Company or a going private transaction (as defined in Rule 13e-3 of the Securities Exchange Act of 1934). A “change of control” is defined as the acquisition by any person or group, other than Charles F. Dolan or members of his immediate family (or trusts for the benefit of Charles F. Dolan or his immediate family) or any employee benefit plan sponsored or maintained by the Company, of (1) the power to direct the management of substantially all of the cable television systems then owned by the Company in the New York City metropolitan area, or (2) after any fiscal year of the Company in which the Company’s cable television systems in the New York City metropolitan area 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 of its assets. Upon a change in control, as defined, the restricted stock and stock options may be converted into either a right to receive an amount of cash based upon the highest price per share of the Company’s Class A common stock paid in the transaction resulting in the change of control, or, as long as the surviving entity is a public company, into a corresponding award with equivalent profit potential in the surviving entity, at the election of the Compensation Committee. Upon a going private transaction, the restricted stock and stock options would be converted into a right to receive an amount of cash based upon the highest price per share of the Company’s Class A common stock paid in the transaction. Following the change of control or going private transaction, the award of restricted stock and stock options will become payable on the earlier to occur of (1) the date on which the award was originally scheduled to vest or (2) the date on which the recipient’s employment with the Company or the surviving entity is terminated (A) by the Company or the surviving entity other than for cause or (B) by the recipient for good reason, if such termination occurs within three years after the change of control or going private transaction, or by the recipient for any reason if such termination occurs at least six months, but not more than nine months, after completion of the change of control or going private transaction. In addition, the amount payable under the award agreement will include interest from the date of the change of control or going private transaction.

Under the applicable award agreements, vesting of restricted stock and stock options granted to employees, including the named executive officers, may be accelerated in certain other circumstances. Under stock option award agreements, upon termination for cause, the entire award is forfeited. Upon termination by the Company without cause, termination by the employee, death, disability or retirement, the unvested portion of the award is forfeited; provided, however, that only with respect to stock options granted in 2006 and 2009, upon death, the entire award is immediately vested. Depending on the type of termination and specific option grant, the time to exercise the vested portion varies from 90 days to three years. With respect to stock options granted in March 2009, depending on the type of termination, the time to exercise the vested option varies from 90 days to the remainder of the

 

66


Table of Contents

Proxy Statement 2012 - Cablevision

 

term. In no event is this period later than the expiration date, except in the case of death, in which the time to exercise may be extended for one year after the expiration date. Under restricted stock award agreements, upon any termination for any reason prior to the third anniversary of the grant date other than death or change of control or going private transaction, the entire award is forfeited; upon death, the entire award is immediately vested. Under the applicable award agreements for performance awards, upon termination for cause, the entire award is forfeited. Under the applicable award agreements for all performance awards, upon a change in control, the entire award vests and is immediately payable, regardless of the performance objectives. Under subsequent performance award agreements, upon any termination for any reason prior to the payment date other than death, the entire award is forfeited. Upon death before the end of the performance period, a pro rata portion of the award will vest and be immediately payable; upon death after the end of the performance period but prior to the payment date, the entire award will be payable upon the payment date. In the event of a going private transaction, the entire award vests and is immediately payable, regardless of the performance objectives.

Quantification of Termination and Severance

The following tables set forth a quantification of estimated severance and other benefits payable to the named executive officers under various circumstances regarding the termination of their employment, except for Mr. Rutledge and Mr. Huseby, for whom actual termination and severance amounts are provided. In calculating these severance estimates and amounts and other payments, we have taken into consideration or otherwise assumed the following:

 

   

Termination of employment occurred after the close of business on December 31, 2011.

 

   

We have valued equity awards using the closing market price of Class A common stock on the New York Stock Exchange on December 30, 2011, the last trading day of the year, of $14.22.

 

   

We have valued stock options at their intrinsic value, equal to the difference between $14.22 and the per share exercise price, multiplied by the number of shares underlying the stock options.

 

   

Where applicable, we have included in the calculation of the value of equity awards the payment of any quarterly dividends declared through December 31, 2011.

 

   

In the event of termination of employment, the payment of certain long-term incentive awards and other amounts may be delayed, depending upon the terms of each specific award agreement, the provisions of the applicable named executive officer’s employment agreement and the applicability of Section 409A. In quantifying aggregate termination payments, we have not taken into account the timing of the payments and we have not discounted the value of payments that would be made over time, except where otherwise disclosed.

 

67


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

   

We have assumed that all performance metrics for performance-based awards are achieved (but not exceeded).

Benefits Payable As a Result of Voluntary Termination of Employment by Employee*

 

Elements  

Charles F.

Dolan

   

James L.

Dolan

   

Gregg G.

Seibert

   

David G.

Ellen

    

Victoria D.

Salhus

 

Severance

                                   

Most recent bonus

                                   

Unvested restricted stock

                                   

Unvested stock options

                                   

Unvested performance options

                                   

Performance awards

  $ 2,190,000 (1)    $ 2,235,000 (1)    $ 510,000 (1)    $ 250,000 (1)     $ 240,000 (1) 

2009 Retention award

                                   

Deferred compensation award

                                   

Consulting arrangements

                                   

Additional retirement benefit

                                   

Health insurance benefits

                                   

Executive life insurance premiums

                                   

 

* The amounts in this table do not include any payments or awards which were vested at December 31, 2011 or any pension or other vested retirement benefits.

 

(1) Represents the full value of the 2009 three-year performance award; all other performance awards would be forfeited.

Benefits Payable As a Result of Termination of Employment Due to Retirement*

 

Elements  

Charles F.

Dolan

   

James L.

Dolan

   

Gregg G.

Seibert

   

David G.

Ellen

    

Victoria D.

Salhus

 

Severance

                                   

Most recent bonus

                                   

Unvested restricted stock

                                   

Unvested stock options

                                   

Unvested performance options

                                   

Performance awards

  $ 2,190,000 (1)    $ 2,235,000 (1)    $ 510,000 (1)    $ 250,000 (1)     $ 240,000 (1) 

2009 retention award

                                   

Deferred compensation award

                                   

Consulting arrangements

                                   

Additional retirement benefit

                                   

Health insurance benefits

                                   

Executive life insurance premiums

                                   

 

* The amounts in this table do not include any payments or awards which were vested at December 31, 2011 or any pension or other vested retirement benefits.

 

(1) Represents the full value of the 2009 three-year performance award; all other performance awards would be forfeited.

 

68


Table of Contents

Proxy Statement 2012 - Cablevision

 

Benefits Payable As a Result of Termination of Employment by the Company for Cause

In the event of termination by the Company for Cause, none of the named executive officers would have been entitled to any payments at December 31, 2011.

Benefits Payable As a Result of Termination of Employment by the Company Without Cause*

 

Elements  

Charles F.

Dolan

   

James L.

Dolan

   

Gregg G.

Seibert

   

David G.

Ellen

   

Victoria D.

Salhus

   

Michael P.

Huseby**

 

Severance

         $ 10,500,000 (1)    $ 7,500,000 (1)    $ 2,486,250 (2)           $ 3,993,800 (3) 

Most recent bonus

         $ 3,546,904      $ 2,275,114      $ 817,258             $ 518,000 (3) 

Unvested restricted stock

         $ 5,585,234 (4)    $ 1,936,894 (5)                      

Unvested stock options

         $ 2,402,243 (6)    $ 647,226 (6)                      

Unvested performance options

                                         

Performance awards

  $ 2,190,000 (7)    $ 10,695,000 (8)    $ 4,740,000 (8)    $ 250,000 (7)    $ 240,000 (7)    $ 411,025 (3) 

2009 Retention award

                                         

Deferred compensation award

                                     $ 824,753 (3) 

Consulting arrangements

                                         

Additional retirement benefit

                                         

Health insurance benefits

                                         

Executive life insurance premiums

                                         

 

* The amounts in this table do not include any payments or awards which were vested at December 31, 2011 or any pension or other vested retirement benefits

 

** Mr. Huseby was the Company’s Chief Financial Officer until June 7, 2011 and an Executive Vice President until July 1, 2011.

 

(1) Represents severance equal to two times the sum of his salary and target bonus.

 

(2) Represents severance equal to one and one half times the sum of his salary and target bonus.

 

(3) In connection with this separation from the Company on July 1, 2011, Mr. Huseby was entitled under his May 2010 employment agreement to: (i) a severance payment equal to two times the sum of his salary and target bonus ($3,993,800); (ii) a prorated annual bonus ($518,000); (iii) a prorated 2009 performance award ($411,025); and (iv) the prorated value of his outstanding deferred compensation award ($824,753).

 

(4) Represents full vesting of the 2009, 2010 and 2011 grants of 169,100, 117,300 and 78,800 shares of restricted stock, respectively, with a value of $2,649,797, $1,779,441 and $1,155,996, respectively.

 

(5) Represents full vesting of the 2009, 2010 and 2011 grants of 38,600, 35,200 and 54,400 shares of restricted stock, respectively, with a value of $604,862, $533,984 and $798,048, respectively.

 

(6) Represents value of the continued vesting of the unvested portion of the 2009 grant(s) of stock options; all other stock options were vested.

 

69


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(7) Represents full vesting of the 2009 performance award; the remaining performance awards would be forfeited.

 

(8) Represents the full value of the 2009, 2010 and 2011 performance awards.

Benefits Payable As a Result of Termination of Employment by Employee For Good Reason*

 

Elements  

Charles F.

Dolan

   

James L.

Dolan

   

Gregg G.

Seibert

   

David G.

Ellen

    

Victoria D.

Salhus

   

Thomas M.

Rutledge**

 

Severance

         $ 10,500,000 (1)    $ 7,500,000 (1)    $ 2,486,250 (2)                

Most recent bonus

         $ 3,546,904      $ 2,275,114      $ 817,258              $ 3,251,000 (3) 

Unvested restricted stock

         $ 5,585,234 (4)    $ 1,936,894 (5)                       

Unvested stock options

         $ 2,402,243 (6)    $ 647,226 (6)                       

Unvested performance options

                                          

Performance awards

  $ 2,190,000 (7)    $ 10,695,000 (8)    $ 4,740,000 (8)    $ 250,000 (7)     $ 240,000 (7)    $ 1,599,990 (3) 

2009 Retention award

                                          

Deferred compensation award

                                          

Consulting arrangements

                                          

Balance under special retirement account

                                      $ 15,274,408 (3) 

Health insurance benefits

                                          

Executive life insurance premiums

                                          

 

* The amounts in this table do not include any payments or awards which were vested at December 31, 2011 or any pension or other vested retirement benefits.

 

** Mr. Rutledge was the Company’s Chief Operating Officer until December 19, 2011.

 

(1) Represents severance equal to two times the sum of his salary and target bonus.

 

(2) Represents severance equal to one and one half times the sum of his salary and target bonus.

 

(3) In connection with his separation from the Company on December 19, 2011, Mr. Rutledge was entitled under his December 2009 employment agreement to: (i) a prorated annual bonus ($3,251,000); (ii) a prorated 2009 performance award ($1,599,990); and (iii) the balance of an additional deferred compensation retirement benefit of $15,000,000, plus interest, as provided for in his 2009 employment agreement.

 

(4) Represents full vesting of the 2009, 2010 and 2011 grants of 169,100, 117,300 and 78,800 shares of restricted stock, respectively, with a value of $2,649,797, $1,779,441 and $1,155,996, respectively.

 

(5) Represents full vesting of the 2009, 2010 and 2011 grants of 38,600, 35,200 and 54,400 shares of restricted stock, respectively, with a value of $604,862, $533,984 and $798,048, respectively.

 

(6) Represents value of the continued vesting of the unvested portion of the 2009 grant(s) of stock options; all other stock options were vested.

 

70


Table of Contents

Proxy Statement 2012 - Cablevision

 

 

(7) Represents full vesting of the 2009 performance award; the remaining performance awards would be forfeited.

 

(8) Represents the full value of his 2009, 2010 and 2011 performance awards.

Benefits Payable As a Result of Termination of Employment Due to Death*

 

Elements  

Charles F.

Dolan

   

James L.

Dolan

   

Gregg G.

Seibert

   

David G.

Ellen

    

Victoria
D.

Salhus

 

Severance

                                   

Salary

  $ 1,664,000 (1)                              

Most recent bonus

         $ 3,546,904      $ 2,275,114                  

Unvested restricted stock

  $ 5,657,567 (2)    $ 5,585,234 (3)    $ 1,936,894 (4)    $ 1,053,332 (5)     $ 548,786 (6) 

Unvested stock options

  $ 2,353,829 (7)    $ 2,402,243 (7)    $ 647,226 (7)                  

Unvested performance options

                                   

Performance awards

  $ 6,570,000 (8)    $ 10,695,000 (9)    $ 4,740,000 (9)    $ 1,310,000 (8)     $ 490,000 (8) 

2009 retention award

                                   

Performance retention award

                                   

Deferred compensation award

                                   

Consulting arrangements

                                   

Additional retirement benefit

                                   

Health insurance benefits

                                   

Executive life insurance premiums

                                   

 

* The amounts in this table do not include any payments or awards which were vested at December 31, 2011 or any pension or other vested retirement benefits

 

(1) Represents one year of base salary.

 

(2) Represents full vesting of the 2009, 2010 and 2011 grants of 165,700, 125,000 and 79,400 shares of restricted stock, respectively, with a value of $2,596,519, $1,896,250 and $1,164,798, respectively.

 

(3) Represents full vesting of the 2009, 2010 and 2011 grants of 169,100, 117,300 and 78,800 shares of restricted stock, respectively, with a value of $2,649,797, $1,779,441 and $1,155,996, respectively.

 

(4) Represents full vesting of the 2009, 2010 and 2011 grants of 38,600, 35,200 and 54,400 shares of restricted stock, respectively, with a value of $604,862, $533,984 and $798,048, respectively.

 

(5) Represents full vesting of the 2009, 2010 and 2011 grants of 19,000, 26,600 and 24,000 shares of restricted stock, respectively, with a value of $297,730, $403,522 and $352,080, respectively.

 

(6) Represents full vesting of the 2009, 2010 and 2011 grants of 18,200, 10,800 and 6,800 shares of restricted stock, respectively, with a value of $285,194, $163,836 and $99,756, respectively.

 

(7) Represents vesting of the unvested portion of the 2009 grant of stock options; all other stock options were vested.

 

(8) Represents full vesting of 2009 performance award and pro rata vesting of 2010 and 2011 performance awards; the remaining amounts of performance awards would be forfeited.

 

71


Table of Contents