EQUITY AND LONG-TERM INCENTIVE PLANS

Cablevision's Equity Plans

In March 2015, Cablevision's Board of Directors approved the Cablevision Systems Corporation 2015 Employee Stock Plan ("2015 Plan"), which was approved by Cablevision's stockholders at its annual stockholders meeting on May 21, 2015. Under the 2015 Plan, Cablevision is authorized to grant stock options, restricted shares, restricted stock units, stock appreciation rights, and other equity-based awards. The Company may grant awards for up to 25,000,000 shares of CNYG Class A common stock under the 2015 Plan. Options and stock appreciation rights under the 2015 Plan must be granted with an exercise price of not less than the fair market value of a share of CNYG Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder). The terms and conditions of awards granted under the 2015 Plan, including vesting and exercisability, will be determined by Cablevision's compensation committee and may be based upon performance criteria. As of December 31, 2015, 79,780 equity based awards had been granted under the 2015 Plan.

Previously, the Company had an employee stock plan ("2006 Plan") under which it was authorized to grant incentive stock options, nonqualified stock options, restricted shares, restricted stock units, stock appreciation rights and other equity-based awards. As a result of the approval of the 2015 Plan by Cablevision stockholders, all remaining available shares (other than those subject to outstanding grants of restricted stock or stock options) under the 2006 Plan have been canceled and no further awards will be granted. The 2006 Plan provided that the exercise price of options and stock appreciation rights could not be less than the fair market value of a share of CNYG Class A common stock on the date of grant and that the awards must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder).

Under the 2006 Stock Plan for Non-Employee Directors, Cablevision is authorized to grant nonqualified stock options, restricted stock units and other equity-based awards. Cablevision may grant awards for up to 1,000,000 shares of CNYG Class A common stock (subject to certain adjustments) under this plan. Options under this plan must be granted with an exercise price of not less than the fair market value of a share of CNYG Class A common stock on the date of grant and must expire no later than 10 years from the date of grant (or up to one additional year in the case of the death of a holder).

The terms and conditions of awards granted under the 2006 Stock Plan for Non-Employee Directors, including vesting and exercisability, are determined by the compensation committee. Unless otherwise provided in an applicable award agreement, options granted under this plan will be fully vested and exercisable, and restricted stock units granted under this plan will be fully vested, upon the date of grant. Unless otherwise determined by the compensation committee, on the date of each annual meeting of Cablevision's stockholders, each non-employee director will receive a number of restricted stock units for the number of shares of common stock equal to $150 divided by the fair value of a share of CNYG Class A stock based on the closing price on the date of grant. In 2015 and 2014, Cablevision granted its non-employee directors an aggregate of 73,056 and 66,421 restricted stock units, respectively. Total non-employee director restricted stock units outstanding as of December 31, 2015 were 466,283.

Options have typically been scheduled to vest over three years in 33-1/3% annual increments and expire 10 years from the grant date. Restricted shares have typically been subject to three or four year cliff vesting. Performance based options granted in 2012 vested over a two year period in 50% annual increments and expire 10 years from the date of grant. Performance based restricted stock awards are subject to three year cliff vesting subject to achievement of performance criteria. Performance based restricted stock units ("PSUs") granted in 2015 are scheduled to cliff vest after three years subject to achievement of specified performance criteria.

Since share-based compensation expense is based on awards that are ultimately expected to vest, such compensation expense for the years ended December 31, 2015, 2014 and 2013 has been reduced for estimated forfeitures. Forfeitures were estimated based primarily on historical experience.

The following table presents the share-based compensation expense recognized by the Company as selling, general and administrative expense for the years ended December 31, 2015, 2014 and 2013:



	Years Ended December 31,
	2015		2014		2013
Stock options	$	9,159	$	7,573	$	17,560
Restricted shares and restricted stock units	51,162		36,411		35,155
Share-based compensation related to equity classified awards	60,321		43,984		52,715
Other share-based compensation	4,965		—		—
Total share-based compensation	$	65,286	$	43,984	$	52,715

An income tax benefit of $26,718, $17,801 and $21,682 was recognized in continuing operations resulting from share-based compensation expense for the years ended December 31, 2015, 2014 and 2013, respectively.

Cablevision uses the 'with-and-without' approach to determine the recognition and measurement of excess tax benefits. Cash flows resulting from excess tax benefits are classified as cash flows from financing activities. Excess tax benefits are realized tax benefits from tax deductions for options exercised and restricted shares issued in excess of the deferred tax asset attributable to share-based compensation expense for such awards. Cablevision recorded an excess tax benefit of $5,694, $336 and $1,280 for the years ended December 31, 2015, 2014 and 2013, respectively. CSC Holdings recorded an excess tax benefit of $14,170, $4,978 and $46,164 for the years ended December 31, 2015, 2014 and 2013, respectively.

Cash received from stock option exercises for the years ended December 31, 2015, 2014 and 2013 was $18,727, $55,355 and $18,120, respectively.

Valuation Assumptions - Stock Options

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

In the first quarter of 2015, Cablevision granted options that are scheduled to vest over three years in 33 1/3% annual increments and expire 10 years from the date of grant. Cablevision calculated the fair value of the option award on the date of grant using the Black-Scholes option pricing model. Cablevision's computation of expected life was determined based on historical data for similar awards. The interest rate for periods within the contractual life of the stock options is based on interest yields for U.S. Treasury instruments in effect at the time of grant. Cablevision's computation of expected volatility is based on historical volatility of its common stock.

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

The following assumptions were used to calculate the fair values of stock option awards granted in the first quarter of 2015, 2014 and 2013:



	2015			2014			2013

Risk-free interest rate	1.82		%	2.12		%	1.25		%
Expected life (in years)	8			6.5			6.5
Dividend yield	3.63		%	3.79		%	3.86		%
Volatility	39.98		%	42.80		%	42.31		%
Grant date fair value	$	5.45		$	5.27		$	3.96

Share-Based Payment Award Activity

The following table summarizes activity relating to Company employees who held Cablevision stock options for the year ended December 31, 2015:



	Shares Under Option
	Time Vesting Options		Performance Based Vesting Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (a)
Balance, December 31, 2014	5,097,666		7,633,500		$	14.41	7.17	$	79,347
Granted	2,000,000		—		19.17
Exercised	(353,666	)	(1,024,283	)	12.84
Balance, December 31, 2015	6,744,000		6,609,217		15.28		6.80	221,900
Options exercisable at December 31, 2015	744,000		6,609,217		13.94		5.67	132,080
Options expected to vest in the future	6,000,000		—		16.93		8.18	89,820


(a)	The aggregate intrinsic value is calculated as the difference between (i) the exercise price of the underlying award and (ii) the quoted price of CNYG Class A common stock on December 31, 2015 or December 31, 2014, as indicated, and December 31, 2015 in the case of the options exercisable and options expected to vest in the future.

For the year ended December 31, 2015, the aggregate intrinsic value of options exercised under Cablevision's stock option plans was $17,561 determined as of the date of option exercise. When an option is exercised, Cablevision issues new shares of stock.

The following table summarizes activity relating to Company employees who held Cablevision restricted shares and restricted stock units for the year ended December 31, 2015:



	Number of Restricted Shares		Number of Performance Restricted Shares		Number of PSUs (a)		Weighted Average Fair Value Per Share at Date of Grant
Unvested award balance, December 31, 2014	5,314,870		2,035,300		—		$	15.46
Granted	1,747,870		584,400		1,851,700		19.43
Vested	(1,598,363	)	(739,600	)	—		14.48
Awards forfeited	(496,629	)	—		(79,270	)	17.28
Unvested award balance, December 31, 2015	4,967,748		1,880,100		1,772,430		17.53


(a)	The PSUs entitle the employee to shares of CNYG common stock up to 150% of the number of PSUs granted depending on the level of achievement of the specified performance criteria. If the minimum performance threshold is not met, no shares will be issued. Accrued dividends are paid to the extent that a PSU vests and the related stock is issued.

During the year ended December 31, 2015, 2,337,963 Cablevision restricted shares issued to employees of the Company vested. To fulfill the employees' statutory minimum tax withholding obligations for the applicable income and other employment taxes, 1,004,950 of these shares, with an aggregate value of $19,141, were surrendered to the Company. During the year ended December 31, 2014, 889,156 Cablevision restricted shares issued to employees of the Company vested. To fulfill the employees' statutory minimum tax withholding obligations for the applicable income and other employment taxes, 365,130 of these shares, with an aggregate value of $6,608 were surrendered to the Company. These acquired shares have been classified as treasury stock.

As of December 31, 2015, there was $78,457 of total unrecognized compensation cost related to outstanding awards granted under Cablevision's stock plans. The unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1 year.

Long-Term Incentive Plans

In March 2011, Cablevision's Board of Directors approved the Cablevision Systems Corporation 2011 Cash Incentive Plan, which was approved by Cablevision's stockholders at its annual stockholders meeting in May 2011.

In connection with the long-term incentive awards outstanding, the Company has recorded expenses of $27,170, $43,892 and $24,596 for the years ended December 31, 2015, 2014 and 2013, respectively. At December 31, 2015, the Company had accrued $31,225 for performance based awards for which the performance criteria had not yet been met as of December 31, 2015 as such awards are based on achievement of certain performance criteria through December 31, 2016. The Company has accrued the amount that it currently believes will ultimately be paid based upon the performance criteria established for these performance based awards.