As filed with the Securities and Exchange Commission on May 27, 1999
REGISTRATION NO. 333-o
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CABLEVISION SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-2776686
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1111 Stewart Avenue
Bethpage, New York 11714
(516) 803-2300
(Address of Principal Executive Offices)
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CABLEVISION SYSTEMS CORPORATION
1998 EMPLOYEE STOCK PLAN
(Full Title of the Plan)
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Robert S. Lemle
Executive Vice President, General Counsel and Secretary
1111 Stewart Avenue
Bethpage, New York 11714
(516) 803-2300
(Name, address and telephone number,
including area code, of agent for service)
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<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Maximum Maximum Amount of
Amount to be Offering Price Aggregate Registration
Title of Securities to be Registered Registered (1)(2) Per Share(3) Offering Price Fee
====================================================================================================================================
<S> <C> <C> <C> <C>
Class A Common Stock, par value $0.01 13,000,000 shares $ 81.74 $ 1,062,620,000 $ 295,408.36
per share
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<FN>
(1) This Registration Statement also registers resales of shares of common stock that are held by "affiliates" of the registrant.
(2) This Registration Statement also relates to an indeterminate number of additional shares of common stock that may be issued
pursuant to anti-dilution and adjustment provisions of the above-named plan.
(3) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(c) under the Securities Act of 1933,
as amended.
</FN>
</TABLE>
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EXPLANATORY NOTE
This registration statement contains a "reoffer prospectus" relating to
shares of Class A common stock received in restricted form upon exercise of
options granted pursuant to the Cablevision Systems Corporation 1998 Employee
Stock Plan. In addition to those persons named therein in respect of the number
of shares set forth therein, the names of additional persons who shall reoffer
shares pursuant thereto and the amount of additional shares to be reoffered
shall be set forth in one or more supplements thereto.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
All information required by Part I to be contained in the prospectus is
omitted from this registration statement in accordance with Rule 428 under the
Securities Act of 1933, as amended.
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PROSPECTUS
CABLEVISION SYSTEMS CORPORATION
13,000,000 SHARES OF
CLASS A COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
---------------------------
This prospectus relates to 13,000,000 shares of Class A common stock of
Cablevision Systems Corporation originally issuable in restricted form to
certain of its employees under the Cablevision Systems Corporation 1998 Employee
Stock Plan.
The Class A common stock may be offered or sold from time to time in
one or more transactions as described in this prospectus. See "Plan of
Distribution".
Cablevision Systems Corporation will not receive any of the proceeds
from the sale of shares of Class A common stock by the persons who use this
prospectus to effect resales of their shares, but will pay all costs, expenses
and fees in connection with the registration of the shares of Class A common
stock, which are estimated to be $400,000.
The Class A common stock is currently traded on the American Stock
Exchange under the symbol "CVC".
---------------------------
INVESTMENT IN THE SHARES INVOLVES SIGNIFICANT RISKS. READ THE SECTION CAPTIONED
"RISK FACTORS" BEGINNING ON PAGE 3 TO LEARN ABOUT CERTAIN FACTORS YOU SHOULD
CONSIDER BEFORE INVESTING IN THE SHARES.
---------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON ANY
UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO SELL
OR TO BUY ONLY THE SHARES OFFERED BY THIS PROSPECTUS, BUT ONLY UNDER
CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY TO THE DATE BELOW.
---------------------------
Prospectus dated May 27, 1999
<PAGE>
TABLE OF CONTENTS
Page
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Available Information ..................................................... 2
Incorporation of Certain Documents by Reference ........................... 2
Purpose of This Prospectus ................................................ 3
Risk Factors .............................................................. 3
Use of Proceeds ........................................................... 11
Selling Stockholders ...................................................... 11
Plan of Distribution ...................................................... 13
Experts ................................................................... 14
Validity of Class A Common Stock .......................................... 14
Statement of Indemnification .............................................. 14
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AVAILABLE INFORMATION
Cablevision Systems Corporation ("Cablevision") files proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). You may obtain copies of this information by mail from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's offices in New York, New York and
Chicago, Illinois, at prescribed rates. Please call the Commission at
1-800-SEC-0330 for further information on the Public Reference Room. You may
also read this information at the offices of the American Stock Exchange, 86
Trinity Place, New York, New York 10006 or from the Commission's website:
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission's rules permit Cablevision to "incorporate by reference"
information into this prospectus filed with the Commission. This means
Cablevision can disclose important information to you by referring you to
another document. Any information referred to in this way is considered part of
this prospectus, and any reports filed with the Commission after the date of
this prospectus and before the date of offering of the shares is terminated will
automatically be deemed to update and supersede any information contained in
this prospectus or incorporated in this prospectus by reference.
Cablevision hereby incorporates by reference into this prospectus the
following documents or information filed with the Commission:
(a) Cablevision's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as amended by Cablevision's Annual Report on Form 10-K/A for
the fiscal year ended December 31, 1998 (together, the "Form 10-K");
(b) Cablevision's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999;
(c) the description of the Class A common stock contained in
Cablevision's Registration Statement on Form S-4 (No. 333-44547), including any
amendment or report filed for the purpose of updating such description; and
(d) all documents filed by Cablevision pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") on or after the date of this prospectus and prior to the
termination of the offering made hereby.
Cablevision will provide without charge to each person, including any
beneficial owner, to whom this prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the information incorporated
herein by reference or in the registration statement to
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which this prospectus relates other than exhibits to such information (unless
such exhibits are specifically incorporated by reference into such information).
Requests should be made to Cablevision's principal executive offices at
Secretary, Cablevision Systems Corporation, 1111 Stewart Avenue, Bethpage, New
York 11714 or by phone to (516) 803-2300 or at our website: www.cablevision.com.
PURPOSE OF THIS PROSPECTUS
This prospectus relates to resales of, or offers to sell, if any, the
Class A common stock, par value $0.01 per share (the "Shares"), of Cablevision
received in restricted form or upon exercise of options granted under the
Cablevision Systems Corporation 1998 Employee Stock Plan (the "Plan"). The
persons reselling or offering to sell the Shares are directors or employees of
Cablevision who are deemed "affiliates" of Cablevision as the term "affiliate"
is used in Rule 405 under the Securities Act of 1933, as amended (the "Selling
Stockholders").
RISK FACTORS
Purchase of the Shares offered by this prospectus involves various
risks, including the following principal factors, which together with the other
matters set forth in this prospectus or incorporated by reference herein, should
be carefully considered by prospective investors. "We," "us" and "our" in this
section refer to Cablevision.
WE HAVE SUBSTANTIAL INDEBTEDNESS, AND WE ARE HIGHLY LEVERAGED AS A RESULT
We have incurred, and we will continue to incur in the future,
substantial amounts of indebtedness to finance operations, expand cable
operations and acquire other cable television systems, programming networks,
sources of programming and other businesses. We also have incurred, and we will
continue to incur, indebtedness in order to offer new services such as high
speed Internet access, digital video service and residential telephone service
to present and potential customers. In addition, we have borrowed and we will
continue to borrow money from time to time to refinance existing indebtedness
and redeem our mandatorily redeemable preferred stock. At March 31, 1999, our
consolidated debt plus the amount of our two series of mandatorily redeemable
preferred stock issued by our subsidiary, CSC Holdings, Inc. ("Holdings"),
totalled $6.8 billion. We urge you to read carefully our consolidated financial
statements contained in our Form 10-K and our March 31, 1999 Form 10-Q, which
provide more detailed information about our indebtedness and Holdings'
mandatorily redeemable preferred stock.
Because of our substantial indebtedness and Holdings' mandatorily
redeemable preferred stock, we are highly leveraged. This means that interest on
and required repayments of our borrowings and dividends on and required
redemption amounts with respect to Holdings' mandatorily redeemable
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preferred stock are significant in relation to our revenues and cash flow. This
leverage exposes us to significant risk in the event of downturns in our
businesses, in our industries or in the economy generally, because although our
cash flows would decrease in such a scenario, our required payments in respect
of indebtedness and preferred stock will not.
OUR FINANCIAL STATEMENTS REFLECT NET LOSSES AND A STOCKHOLDERS' DEFICIENCY
We have reported recent net losses as follows:
For the Three Months Ended:
March 31, 1999 .................................................. $238.6 million
For the Year Ended:
December 31, 1998 ............................................... $448.5 million
December 31, 1997 ............................................... $ 12.1 million
December 31, 1996 ............................................... $459.9 million
Net losses are calculated by subtracting from gross revenues (1) operating
expenses, including depreciation and amortization, (2) interest expense, (3)
preferred stock dividends of Holdings, (4) other income and expenses and (5) net
profit or loss from affiliate operations. The net losses described above
primarily reflect our high interest expense, preferred stock dividends of
Holdings and depreciation and amortization charges, which are expected to
continue. As a cumulative result of these net losses, at March 31, 1999, we had
a stockholders' deficiency of $2.8 billion. We urge you to read carefully our
consolidated financial statements contained in our Form 10-K and our March 31,
1999 Form 10-Q, which provide more detailed information about these net losses.
We expect our net losses to continue and to remain substantial for the
foreseeable future because:
o interest expense, preferred stock dividends of Holdings and
depreciation and amortization charges relating to our existing
indebtedness and preferred stock and completed acquisitions and
capital expenditures will remain high for the foreseeable future,
o we expect that future indebtedness incurred to fund pending and
future acquisitions and the development of our existing and new
businesses, including, but not limited to, capital expenditures
and additional investments in our cable television plant and
programming operations, will result in significant additional
charges against earnings, and
o we expect expenses and depreciation relating to each new service
we offer to be particularly high in relation to the amount of
revenues such new service will
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generate in its first years of operations, resulting in
significant net losses each time we begin offering a new service
or supporting a new business we acquire.
WE WILL NEED SIGNIFICANT ADDITIONAL BORROWINGS, AND WE HAVE COMMITTED
TO SIGNIFICANT FUTURE CAPITAL EXPENDITURES AND OTHER CAPITAL COMMITMENTS
Our business is very capital-intensive. Operating, maintaining and
upgrading our cable television plant require significant amounts of cash
payments to third parties. In addition, we have incurred significant expenses to
start up and operate new businesses, such as high speed Internet access, digital
video service and residential telephone service. We expect such expenses to
continue or grow as we continue to introduce these and possibly other new
services, such as personal communications services and direct broadcast
satellite ventures, to our cable television customers. We also incur significant
start-up costs in funding new cable programming services before they have
positive cash flow, typically during their start-up and development. Our
acquisition and development of related businesses, such as electronics retailing
and movie theaters, also result in significant expenditures. Finally, we pay a
significant amount of interest in respect of our outstanding indebtedness, and
significant amounts of cash will be required to repay our existing indebtedness
and redeem our mandatorily redeemable preferred stock.
We will not be able to generate sufficient cash internally to finance
these projects and to repay our indebtedness at maturity and redeem our
mandatorily redeemable preferred stock at the mandatory redemption date. Since
we will be unable to generate sufficient cash internally for these purposes, we
will be required to either raise additional capital, through debt or equity
issuances or both, or we will be required to cancel or scale back current and
future spending programs or we will be required to sell assets. You should not
assume that we will be able to raise any required additional capital, nor should
you assume that we will be able to compete effectively if we are unable to
pursue our current and future spending programs.
Some of our subsidiaries have substantial future capital commitments in
the form of long-term contracts that require substantial payments over an
extended period of time. For example, rights agreements with sports teams
pursuant to which we carry games on our programming networks almost always
involve multi-year contracts that are difficult and expensive to terminate. The
acquisition and development activities of some of our subsidiaries, such as the
acquisition of entertainment businesses and the acquisition and development of
entertainment facilities, will result in significant expenditures.
Accordingly, if we are forced to cancel or scale back current and
future spending programs as described above, our choice of which spending
programs to cancel or scale back may be limited.
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A SIGNIFICANT AMOUNT OF OUR BOOK VALUE CONSISTS OF INTANGIBLE ASSETS
At March 31, 1999, we reported $7.0 billion of consolidated total
assets, of which $3.1 billion were intangible. Intangible assets include assets
such as franchises from city and county governments to operate cable television
systems, affiliation agreements, amounts representing the cost of certain
acquired assets in excess of their fair value and certain deferred costs
associated with past financings, acquisitions and other transactions. You should
not assume that we would receive any cash from the voluntary or involuntary sale
of these intangible assets. We urge you to read carefully our consolidated
financial statements contained in our Form 10-K and our March 31, 1999 Form
10-Q, which provide more detailed information about these intangible assets.
WE MAY NOT BE ABLE TO COMPLETE OUR PENDING TRANSACTIONS
We have announced and may continue to announce a number of
transactions, some of which are or may be significant to our business. Because
of the conditions required to be fulfilled before we can complete these
transactions, we cannot assure you that any of our announced transactions will
be completed on the terms or schedule we announce, or that any of them will be
completed at all. Our pending transactions are generally disclosed in our Form
10-K and our March 31, 1999 Form 10-Q. We urge you to read carefully the
description of pending transactions contained therein, particularly the
conditions required to be fulfilled in order to complete such transactions.
WE ARE CONTROLLED BY THE DOLAN FAMILY
Cablevision has two classes of common stock:
o Class B common stock, which is generally entitled to ten votes
per share and is entitled collectively to elect 75% of the
Cablevision board of directors, and
o Class A common stock, which is entitled to one vote per share and
is entitled collectively to elect the remaining 25% of the
Cablevision board of directors.
As of April 30, 1999, Charles F. Dolan beneficially owned and possessed sole
voting power with respect to 943,364 shares or 0.9% of Cablevision's outstanding
Class A common stock and 18,906,469 shares or 43.8% of Cablevision's outstanding
Class B common stock. In addition, an aggregate of 4,230,655 shares or 9.8% of
the outstanding Class B common stock were held by a grantor retained annuity
trust (the "GRA Trust") established by Mr. Dolan for estate planning purposes.
Mr. Dolan may be deemed to have beneficial ownership of the shares of Class B
common stock held by the GRA Trust due to his right to reacquire the Class B
common stock held by the GRA Trust by substituting other property of equivalent
value, but, until such event, the GRA Trust, through its co-trustees (who are
Mr. Dolan and his spouse), has the power to vote
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and dispose of the shares of Class B common stock held by it. As a result of his
direct holdings and his beneficial ownership of the shares held by the GRA
Trust, Mr. Dolan beneficially owned 943,364 shares or 0.9% of Cablevision's
outstanding Class A common stock and 23,137,124 shares or 53.7% of Cablevision's
outstanding Class B common stock. On a combined basis, these shares represented
15.8% of the total number of shares of both classes of common stock and 43.0% of
the total voting power of the common stock. Other trusts established by Mr.
Dolan for the benefit of certain Dolan family members, and as to which Mr. Dolan
disclaims beneficial ownership, owned an additional 3,583,200 shares of Class A
common stock or 3.3% of the Class A common stock and 19,987,712 shares of the
Class B common stock or 46.4% of the Class B common stock and 37.7% of the total
voting power of all classes of the common stock.
As a result of Dolan's stock ownership and the stock ownership of his
family members, Dolan family members have the power to elect all the directors
of Cablevision subject to election by holders of the Class B common stock. Dolan
family members may control stockholder decisions on matters in which holders of
the Cablevision common stock vote together as a class. These matters include the
amendment of certain provisions of Cablevision's certificate of incorporation
and the approval of fundamental corporate transactions, including mergers. In
addition, because the affirmative vote or consent of the holders of at least
662/3% of the outstanding shares of the Class B common stock, voting separately
as a class, is required to approve (1) the authorization or issuance of any
additional shares of Class B common stock and (2) any amendment, alteration or
repeal of any of the provisions of Cablevision's certificate of incorporation
that adversely affects the powers, preferences or rights of the Class B common
stock, Dolan family members also have the power to prevent such issuance or
amendment. The voting rights of the Class B common stock beneficially owned by
the Dolan family members will not be modified as a result of any transfer of
legal or beneficial ownership thereof.
The Dolan family will therefore be able to prevent or cause a change of
control of Cablevision.
SIGNIFICANT RESTRICTIVE COVENANTS IN OUR FINANCING AGREEMENTS LIMIT OUR
FLEXIBILITY
Our credit agreement and certain of our debt instruments contain
various financial and operating covenants which, among other things, require the
maintenance of certain financial ratios and restrict the relevant borrower's
ability to incur debt from other sources and to use funds for various purposes,
including investments in certain subsidiaries. Violation of these covenants
could result in a default which would permit the parties who have lent money
under our credit agreement and such other debt instruments to:
o restrict our ability to borrow undrawn funds under our credit
agreement and
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o require the immediate repayment of the borrowings under our
credit agreement and such other debt instruments.
REGULATORY RISKS ARE INHERENT AND SUBSTANTIAL IN OUR BUSINESSES
GENERAL. The FCC and state and local governments extensively regulate
the rates we may charge our customers for video services. They also regulate us
in other ways that affect the daily conduct of our video delivery and video
programming business, as well as our telephone business and possibly in the
future, our high speed Internet access business. Any action by the FCC, the
states of New York, New Jersey, Connecticut, Massachusetts or Ohio or concerted
action by local regulators, the likelihood or extent of which we cannot predict,
could have a material financial effect on us. For example, in 1992, Congress
enacted the Cable Television Consumer Protection and Competition Act of 1992
(the "1992 Cable Act"), which represented a significant change in the regulatory
framework under which cable television systems operate. In 1993 and 1994, the
FCC ordered reductions in cable television rates based on the 1992 Cable Act. In
1995, a Federal appeals court upheld the material aspects of the FCC's rate
regulation scheme. Congress subsequently enacted the Telecommunications Act of
1996, which relaxes the regulation of higher tier cable television rates. This
higher tier rate regulation relaxation went into effect on March 31, 1999. The
regulation by local governments of basic cable rates will continue in most
communities in which we operate.
RECENT FCC AND CONGRESSIONAL ISSUES MAY AFFECT OUR BUSINESSES. The FCC
has established a national limit of 30% on the number of households that any
cable company can serve. This 30% national limit, because of court proceedings,
has never been implemented, and the FCC is considering revising this limit, as
well as changing the definition of what type and degree of ownership should be
considered in determining whether a cable company has exceeded whatever limit
the FCC sets. The outcome of these proceedings could affect us because of AT&T's
investment in Cablevision through its recent acquisition of Tele-Communications,
Inc. ("TCI"). This issue recently has been given greater visibility at the FCC
and in Congress as a result of AT&T's proposed acquisition of MediaOne Group.
Some parties, including America Online and certain local telephone
companies, have proposed statutory and regulatory requirements that would force
cable systems to provide carriage to third-party Internet access providers. The
FCC thus far has rejected these requests, but legislation has been introduced
that would effectively require that such access be provided. We cannot predict
at this time whether or to what extent such legislation might be successful or
whether the FCC might reevaluate its initial conclusion not to impose such
regulation.
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OUR CURRENT FRANCHISES ARE GENERALLY NON-EXCLUSIVE, AND OUR FRANCHISORS
NEED NOT RENEW OUR FRANCHISES. Our cable television systems are operated
primarily under non-exclusive franchise agreements with local government
franchising authorities, in some cases with the approval of state cable
television authorities. Consequently, our business is dependent on our ability
to obtain and renew our franchises. Although we have never lost a franchise as a
result of a failure to obtain a renewal, our franchises are subject to
non-renewal or termination under certain circumstances. In certain cases,
franchises have not been renewed at expiration, and we operate under either
temporary operating agreements or without a license while negotiating renewal
terms with the franchising authorities. In the case of one of our franchises in
Ohio with 11,000 subscribers as of March 31, 1999, we are operating without a
license while we appeal the denial of the franchise renewal in federal court in
accordance with the provisions of the Cable Communications Policy Act of 1984.
WE ARE EXPOSED TO A SIGNIFICANT AND CREDIBLE RISK OF COMPETITION
GENERAL. Cable operators compete with a variety of television
programming distribution systems, including broadcast television stations,
direct broadcasting satellite systems, multichannel multipoint distribution
services, satellite master antenna systems and private home dish earth stations.
For example, four direct broadcasting satellite systems are now operational in
the United States. Companies with substantial resources such as Hughes
Electronics Corp. have invested in some of these systems. Cable systems also
compete with the entities that make videotaped movies and programs available for
home rental. The Telecommunications Act of 1996 gives telephone companies and
other video providers the option of providing video programming to subscribers
through "open video systems", a wired video delivery system similar to a cable
television system that may not require a local cable franchise. RCN, an open
video system operator that teams with electric utilities, is currently operating
systems in Boston and parts of New York City that compete with us. Additional
video competition to cable systems is possible from new wireless local
multipoint distribution services authorized by the FCC, for which spectrum was
recently auctioned by the FCC.
The 1992 Cable Act prohibits a cable programer that is owned by or
affiliated with a cable operator, such as our subsidiary Rainbow Media Holdings,
Inc., from (1) unreasonably discriminating among or between cable operators and
other multichannel video distribution systems with respect to the price, terms
and conditions of sale or distribution of the programmer's service and (2)
unreasonably refusing to sell service to any multichannel video programming
distributor.
COMPETITION FROM TELEPHONE COMPANIES. The Cable Communications Policy
Act of 1984 barred co-ownership of telephone companies and cable television
systems operating in the same service areas. The Telecommunications Act of 1996
repealed this restriction and permits a telephone company to provide video
programming directly to subscribers in its telephone service territory, subject
to certain regulatory requirements, but generally prohibits a telephone company
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from acquiring an in-region cable operator, except in certain small markets
under certain circumstances. Telephone companies, such as Ameritech Corp. in
Ohio and Southern New England Telephone Co. in Connecticut, have obtained or
applied for local franchises to construct and operate cable television systems
in several communities in which we currently hold cable franchises, and in
certain locations have commenced offering service in competition with us.
OUR SYSTEMS AND THE SYSTEMS OF THIRD PARTIES ON WHOM WE RELY MAY NOT
ACHIEVE YEAR 2000 READINESS
Y2K readiness refers to the ability of certain computerized systems and
technologies to recognize and/or correctly process dates beyond December 31,
1999 and leap year calculations. As a result of Y2K readiness issues, the
potential exists for computer system failure or miscalculations by computer
programs, which could disrupt our operations. Our plan to identify and address
Y2K issues is described in our Form 10-K and our March 31, 1999 Form 10-Q.
Many of the information technology, or "IT", and non-IT systems that
are necessary for the continued operation of our businesses are dependent upon
components that may not be Y2K compliant. While our Y2K compliance program is
designed to identify and remediate these systems in order to avoid interruption
of our operations, there can be no assurance that we will be able to identify
all noncompliant systems or successfully remediate all those that are
identified. Failure of IT or non-IT systems that are necessary for the operation
of our businesses, including, without limitation, our billing systems,
addressable controller and converter systems, purchasing, finance and inventory
systems, marketing databases and point of sale systems, could have a material
adverse effect on us.
We are dependent upon third-party products and services, such as
utility services and programming uplinks, for the operation of our businesses.
While as part of the inventory and assessment phase of our Y2K program, we have
contacted third-party product and service providers to ascertain whether Y2K
compliance issues may exist, we have in many cases not received assurances from
such suppliers. Moreover, in most cases we do not have the ability to verify any
assurances we do receive from third-party suppliers. If critical IT or non-IT
systems used by such third-party suppliers fail as a result of a Y2K compliance
issue, and as a result of such failure the ability of such supplier to continue
to provide such product or service to us is interrupted, our ability to continue
to provide services to our customers may be interrupted. Such an interruption
could have a material adverse effect on us. We intend to implement contingency
plans to address those risks, although no such plans have yet been identified,
and there can be no assurance that any such plan would resolve such problems in
a satisfactory manner. In addition to the risks associated with the failure of
IT systems due to Y2K problems, the failure of non-IT systems would pose
significant risks to us. For example, we and our subsidiaries operate facilities
for both employees and the public. Failure of non-IT systems at such facilities
could result in health and safety risks that could lead to the closure or
unavailability of such facilities. This could result in lost revenues to us and
the risk of actions against us if the businesses of
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others are disrupted. Also, the failure of such non-IT systems could result in
injury to individuals which could expose us to actions by or on behalf of such
individuals.
WE HAVE NOT PAID DIVIDENDS, AND WE DO NOT INTEND TO PAY DIVIDENDS
Cablevision has never declared or paid dividends on any of its common
stock and has no intention to pay cash dividends on such stock in the
foreseeable future. In addition, certain debt instruments to which we are a
party contain covenants which effectively prohibit the payment of such
dividends.
WE HAVE GRANTED REGISTRATION RIGHTS COVERING A PORTION OF OUR SHARES
On May 17, 1999, 109,089,532 shares of Class A common stock were
outstanding. Cablevision has granted to each of Mr. Dolan, certain Dolan family
interests, the Dolan Family Foundation, John Tatta, a director of Cablevision,
and certain Tatta family interests registration rights with respect to 2,647,405
shares of Class A common stock held by them on such date, as well as with
respect to 43,126,836 shares of Class A common stock issuable upon conversion of
shares of Class B common stock. The direct or indirect subsidiaries of
Tele-Communications, Inc. holding Class A common stock have certain registration
rights with respect to such shares of Class A common stock. Sales of a
substantial number of shares of Class A common stock or Class B common stock
could adversely affect the market price of the Class A common stock and could
impair Cablevision's future ability to raise capital through an offering of its
equity securities.
USE OF PROCEEDS
The Shares may be sold hereunder from time to time by the Selling
Stockholders. Cablevision will not receive any of the proceeds from such sales.
SELLING STOCKHOLDERS
Selling Stockholders may use this prospectus to effect resales of the
Shares. Each Selling Stockholder listed in the table below may offer up to the
amount of Shares set forth opposite such individual's name under the column
captioned "Shares of Class A Common Stock to be Offered Hereby" or such
additional amount as shall be set forth in a supplement or supplements to this
prospectus. The Shares may also be offered from time to time by such other
employees of Cablevision as may be named in a supplement or supplements to this
prospectus. The following table sets forth (i) the relationship which each such
individual Selling Stockholder has had with Cablevision during the past three
years, (ii) the number of Shares which each such individual
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owns or for which such individual holds options pursuant to the Plan and which
may be offered hereby, (iii) the number of shares of Shares owned by such
individual and (iv) the number of options to purchase Shares which such
individual holds other than pursuant to the Plan.
No estimate can be given as to the amount of Shares that will be held
by the Selling Stockholders after completion of this offering because (i) each
Selling Stockholder may offer some or all of the Shares pursuant to the
offerings contemplated by this prospectus, (ii) the offerings of the Shares are
not necessarily being made on a firm commitment basis and (iii) each Selling
Stockholder could purchase additional Shares from time to time. See "Plan of
Distribution".
<TABLE>
<CAPTION>
SHARES OF
CLASS A SHARES OF
COMMON STOCK CLASS A
TO BE OFFERED COMMON STOCK
NAME POSITION HEREBY* CURRENTLY OWNED**
- -------------------- -------------------------- ------------- ----------------
<S> <C> <C> <C>
Margaret Albergo Executive Vice President, 15,000 10,470
Planning and Operations
Marc A. Lustgarten Vice Chairman and 261,000 280,052
Director
Andrew B. Rosengard Executive Vice President, 20,000 14,667
Finance and Controller
James L. Dolan President, Chief Executive 80,000 103,666
Officer and Director
Patrick F. Dolan Director 17,000 134,416
</TABLE>
- ----------
* Certain of the employee stock options are not yet exercisable.
** Including shares under options to purchase Class A common stock.
12
<PAGE>
PLAN OF DISTRIBUTION
Any of or all of the Shares may be sold from time to time to purchasers
directly by the Selling Stockholders. Alternatively, the Selling Stockholders
may from time to time offer the Shares through underwriters, dealers or agents
who may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of Shares for
whom they may act. The Selling Stockholders and any such underwriters, dealers
or agents that participate in the distribution of Shares may be deemed to be
underwriters under the Securities Act of 1933, as amended (the "Securities
Act"). Any profit on the sale of the Shares by them and any discounts,
commissions or concessions received by them may be deemed to be underwriting
discounts and commissions under the Securities Act. To the extent required, at
the time a particular offer of Shares is made a supplement to this prospectus
will be distributed which will set forth the number of Shares being offered and
the terms of the offering. These terms will include the name or names of any
underwriters, dealers or agents, any discounts, commissions and other items
constituting compensation from the Selling Stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers, including
the proposed selling price to the public.
The Shares may be sold from time to time in one or more transactions at
a fixed offering price, which may be changed, or at varying prices determined at
the time of sale or at negotiated prices.
Cablevision is paying certain expenses (not including commissions of
dealers or agents) incident to the offering and sale of the Shares to the
public, which are estimated to be approximately $400,000. If and when
Cablevision is required to update this prospectus, it may incur additional
expenses in excess of the amount estimated above.
In order to comply with certain states' securities laws, if applicable,
the Shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the Shares may not be sold unless
the Shares have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is met.
Pursuant to the Plan, Cablevision agreed to use its best efforts to
keep the registration statement of which this prospectus forms a part
continuously effective for a period of at least two years from the date the
Shares were issued by Cablevision. Cablevision has also agreed to indemnify the
Selling Stockholders against certain liabilities, including liabilities under
the Securities Act. See "Statement of Indemnification".
13
<PAGE>
EXPERTS
The consolidated financial statements and schedule of Cablevision and
its subsidiaries as of December 31, 1998 and 1997 and for each of the years in
the three-year period ended December 31, 1998 are incorporated in this
prospectus and registration statement by reference in reliance upon the report
of KPMG LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
VALIDITY OF CLASS A COMMON STOCK
The validity of the Shares offered hereunder has been passed upon for
Cablevision by Robert S. Lemle, Esq., Executive Vice President, General Counsel
and Secretary of Cablevision. As of the date of this prospectus, Mr. Lemle owned
78,870 shares of Class A common stock and held options to purchase an additional
331,100 shares of Class A common stock, none of which options was granted under
the Plan.
STATEMENT OF INDEMNIFICATION
Under provisions of the Certificate of Incorporation of Cablevision,
each person who is or was a director or officer of Cablevision shall be
indemnified by Cablevision to the fullest extent permitted by Section 145 of the
General Corporation Law of Delaware. Section 145 provides that a corporation
shall have the power to indemnify an agent, officer or director who was or is
threatened to be made a party to any proceedings, against certain expenses,
judgments, fines, settlements and other accounts under certain circumstances.
The By-laws of Cablevision provide that the Board of Directors may advance
expenses incurred by an officer or director in defending certain proceedings
upon receipt of an undertaking to repay such amount under certain circumstances.
At the annual meeting held on September 23, 1987, the stockholders of
Cablevision authorized and approved a form of Indemnification Agreement.
Cablevision has entered into such Indemnification Agreement with approximately
15 officers and directors of Cablevision. Such Indemnification Agreement
provides that Cablevision will, subject to certain exceptions, indemnify each
such person in respect of losses or expenses incurred as a result of threatened,
pending or completed actions or proceedings involving such person and relating
to such person's service as an officer or director of Cablevision, including
losses and expenses in respect of actions or proceedings brought under the
Securities Act.
14
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for directors, officers or persons controlling Cablevision
pursuant to the foregoing provisions, Cablevision has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Cablevision Systems Corporation ("Cablevision") hereby incorporates by
reference into this registration statement the following documents or
information filed with the Securities and Exchange Commission (the
"Commission"):
o Cablevision's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, as amended by Cablevision's Annual
Report on Form 10K/A for the fiscal year ended December 31, 1998;
o Cablevision's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999; and
o The description of Cablevision's Class A Common Stock, par value
$0.01 per share, contained in Cablevision's Registration
Statement on Form S-4 (No. 333-44547), including any amendment or
report filed for the purpose of updating such description.
All documents subsequently filed by Cablevision pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all shares of common stock offered have been sold or which
deregisters all then remaining unsold, shall be deemed to be incorporated by
reference in this registration statement and be part hereof from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this registration statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
registration statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
I-3
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of such action, and the statute requires court approval before
there can be any indemnification where the person seeking indemnification has
been found liable to the corporation. The statute provides that it is not
exclusive of other rights to which those seeking indemnification may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise.
The first paragraph of Article Ninth of CABLEVISION's Certificate of
Incorporation provides:
The corporation shall, to the fullest extent permitted by Section 145
of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, or by any successor thereto, indemnify any and
all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities or other matters
referred to in or covered by said section. Such right to indemnification
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person. The indemnification provided for
herein shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any By-Law, agreement, vote
of stockholders or disinterested directors or otherwise.
Article VIII of the By-Laws of Cablevision provides:
A. The corporation shall indemnify each person who was or is made a
party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the
legal representative, is or was a director or officer of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is
I-4
<PAGE>
alleged action in an official capacity as a director, officer, employee or
agent or alleged action in any other capacity while serving as a director,
officer, employee or agent, to the maximum extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the corporation to provide broader indemnification
rights than said law permitted the corporation to provide prior to such
amendment), against all expense, liability and loss (including attorney's
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred by such person in connection
with such proceeding. Such indemnification shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and administrators. The right
to indemnification conferred in this Article shall be a contract right and
shall include the right to be paid by the corporation the expenses incurred
in defending any such proceeding in advance of its final disposition;
provided that, if the Delaware General Corporation Law so requires, the
payment of such expenses incurred by a director or officer in advance of
the final disposition of a proceeding shall be made only upon receipt by
the corporation of an undertaking by or on behalf of such person to repay
all amounts so advanced if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized
in this Article or otherwise.
B. The right to indemnification and advancement of expenses conferred
on any person by this Article shall not limit the corporation from
providing any other indemnification permitted by law nor shall it be deemed
exclusive of any other right which any such person may have or hereafter
acquire under any statute, provision of the Certificate of Incorporation,
by-law, agreement, vote of stockholders or disinterested directors or
otherwise.
C. The corporation may purchase and maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of
the corporation or another corporation, partnership, joint venture, or
other enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
Cablevision has entered into indemnification agreements with certain of
its officers and directors indemnifying such officers and directors from and
against certain expenses, liabilities or other matters referred to in or covered
by Section 145 of the Delaware General Corporation Law. Cablevision maintains
directors' and officers' liability insurance.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation
I-5
<PAGE>
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) for payments
of unlawful dividends or unlawful stock repurchases or redemptions, or (iv) for
any transaction from which the director derived an improper personal benefit.
The second paragraph of Article Ninth of Cablevision's Certificate of
Incorporation provides for such limitation of liability.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
4.1 Certificate of Incorporation (incorporated by reference to Exhibit 3.1
to the Registration Statement on Form S-4 (No. 333-44547) (the "Form
S-4")).
4.2 By-laws (incorporated by reference to Exhibit 3.20 to the S-4).
4.3 Cablevision Systems Corporation 1998 Employee Stock Plan.
5. Opinion of Robert S. Lemle as to the validity of the Class A Common
Stock.
23.1. Consent of KPMG LLP.
23.2. Consent of Robert Lemle (included in Exhibit 5).
24. Power of Attorney (included in signature page).
ITEM 9. REQUIRED UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement.
I-6
<PAGE>
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
I-7
<PAGE>
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Oyster Bay and the State of New York, on this 27th
day of May, 1999.
CABLEVISION SYSTEMS CORPORATION
By: /s/ William J. Bell
----------------------------
Name: William J. Bell
Title: Vice Chairman and
Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William J. Bell and Robert S. Lemle, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him in his name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and file the same, with all exhibits
thereto and other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on May 27, 1999.
I-8
<PAGE>
SIGNATURE TITLE
--------- -----
/s/ James L. Dolan President, Chief Executive Officer and Director
- --------------------- (Principal Executive Officer)
James L. Dolan
/s/ William J. Bell Vice Chairman and Director (Principal Financial
- --------------------- Officer)
William J. Bell
/s/ Andrew B. Rosengard Executive Vice President, Finance and Controller
- --------------------- (Principal Accounting Officer)
Andrew B. Rosengard
Chairman of the Board of Director
- ---------------------
Charles F. Dolan
/s/ Marc A. Lustgarten Vice Chairman and Director
- ---------------------
Marc A. Lustgarten
/s/ Robert S. Lemle Executive Vice President, General Counsel,
- --------------------- Secretary and Director
Robert S. Lemle
/s/ Sheila A. Mahony Executive Vice President, Communications,
- --------------------- Government and Public Affairs
Sheila A. Mahony
/s/ Thomas C. Dolan Senior Vice President, Chief Information
- --------------------- Officer and Director
Thomas C. Dolan
/s/ John Tatta Director
- ---------------------
John Tatta
Director
- ---------------------
Patrick F. Dolan
/s/ Charles D. Ferris Director
- ---------------------
Charles D. Ferris
I-9
<PAGE>
/s/ Richard H. Hochman Director
- ---------------------
Richard H. Hochman
Director
- ---------------------
Victor Oristano
/s/ Vincent Tese Director
- ---------------------
Vincent Tese
/s/ William Fitzgerald Director
- ---------------------
William Fitzgerald
/s/ Leo J. Hindery, Jr. Director
- ---------------------
Leo J. Hindery, Jr.
I-10
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 to the Registration Statement on Form S-4 (No.
333-44547) (the "Form S-4")).
4.2 By-laws (incorporated by reference to Exhibit 3.20 to the S-4).
4.3 Cablevision Systems Corporation 1998 Employee Stock Plan.
5. Opinion of Robert S. Lemle as to the validity of the Class A
Common Stock.
23.1. Consent of KPMG Peat Marwick.
23.2. Consent of Robert Lemle (included in Exhibit 5).
24. Power of Attorney (included in signature page).
EXHIBIT 4.3
CABLEVISION SYSTEMS CORPORATION
1998 EMPLOYEE STOCK PLAN
as amended
(1) Purpose. The purpose of the Cablevision Systems Corporation 1998
Employee Stock Plan is to compensate key employees of the Company and its
Affiliates who are and have been largely responsible for the management and
growth of the business of the Company and its Affiliates and to advance the
interests of the Company by encouraging and enabling the acquisition of a larger
personal proprietary interest in the Company by key employees upon whose
judgment and keen interest the Company and its Affiliates are largely dependent
for the successful conduct of their operations. It is anticipated that such
compensation and the acquisition of such proprietary interest in the Company
will stimulate the efforts of such key employees on behalf of the Company and
its Affiliates, and strengthen their desire to remain with the Company and its
Affiliates. It is also expected that such compensation and the opportunity to
acquire such a proprietary interest will enable the Company and its Affiliates
to attract desirable personnel.
(2) Definitions. When used in this Plan, unless the context otherwise
requires:
(a) "Affiliate" shall mean (i) any corporation controlling, controlled
by, or under common control with the Company or any other Affiliate, (ii)
any corporation in which the Company owns at least five percent of the
outstanding shares of all classes of common shares of such corporation,
(iii) any unincorporated trade or business controlling, controlled by, or
under common control with the Company or any other Affiliate, and (iv) any
unincorporated trade or business in which the Company owns at least a five
percent interest in the capital or profits of such trade or business.
(b) "Awards" shall mean options, Rights, Restricted Shares or Bonus
Awards which are granted or made under the Plan.
(c) "Board of Directors" shall mean the Board of Directors of the
Company, as constituted at any time.
(d) "Bonus Awards" shall mean awards made pursuant to Section 11.
(e) "Committee" shall mean the Committee of the Board of Directors, as
described in Section 3.
<PAGE>
(f) "Company" shall mean Cablevision Systems Corporation, a Delaware
corporation.
(g) "Executive Officer" shall mean a person who is an officer of the
Company within the meaning of Rule 16b-l(f) promulgated under the
Securities Exchange Act of 1934, as amended from time to time.
(h) "Fair Market Value" on a specified date shall mean the average of
the bid and asked closing prices at which one Share is traded on the
over-the-counter market, as reported on the National Association of
Securities Dealers Automated Quotation System, or the closing price for a
Share on the stock exchange, if any, on which such Shares are primarily
traded, but if no Shares were traded on such date, then on the last
previous date on which a Share was so traded, or, if none of the above is
applicable, the value of a Share as established by the Committee for such
date using any reasonable method of valuation.
(i) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended.
(j) "Options" shall mean the stock options issued pursuant to this
Plan.
(k) "Performance Criteria" shall mean a goal or goals established by
the Committee and measured over a period or periods selected by the
Committee, such goal(s) to constitute a requirement that must be met prior
to either the vesting, exercise or payment of an Award under the Plan as
specified by the Committee. Unless the Committee otherwise determines at
the time of grant of an award of Restricted Shares or a Bonus Award to an
Executive Officer, the Performance Criteria with respect to such award
shall be related to at least one of the following criteria, which may be
determined by reference to the performance of the Company or an Affiliate,
subdivision or other business unit of either, or any combination of the
foregoing, or based on comparative performance relative to other companies;
(i) earnings per share, (ii) total return to stockholders, (iii) return on
equity, (iv) operating income or net income, (v) return on capital, (vi)
costs, (vii) results relative to budget, (viii) cash flow, (ix) cash
margin, (x) cash flow per subscriber, (xi) revenues, (xii) revenues per
subscriber, (xiii) subscriber growth, (xiv) results relative to
quantitative customer service standards, (xv) results relative to
quantitative customer satisfaction standards, or (xvi) a specified increase
in the Fair Market Value of the Company's Class A common stock.
(l) "Plan" shall mean the Cablevision Systems Corporation 1998
Employee Stock Plan.
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<PAGE>
(m) "Restricted Period" shall mean the period of time during which
Restrictions shall apply to a Restricted Share, as determined by the
Committee pursuant to Section 10 hereof.
(n) "Restricted Shares" shall mean the Shares granted pursuant to
Section 10 hereof.
(o) "Restrictions" shall mean the restrictions upon the sale,
assignment, transfer, pledge or other disposal or encumbrance on a
Restricted Share as set forth in Section 10 hereof.
(p) "Rights" shall mean the stock appreciation rights issued to the
grantee of an Option pursuant to Section 7 of the Plan to receive from the
Company cash or Shares or a combination of cash or Shares, based on the
excess of the Fair Market Value of the Shares at the time of exercise over
the exercise price of the Shares subject to the related option, subject to
the terms and conditions of the Plan.
(q) "Share" shall mean a share of Class A common stock of the Company,
par value $.0l.
(r) "Subsidiary" shall mean any "subsidiary corporation," as defined
in Section 424(f) of the Internal Revenue Code.
(3) Administration. The Plan shall be administered by the Committee,
which shall consist of at least three members of the Board of Directors of the
Company who shall be appointed by, and shall serve at the pleasure of, the Board
of Directors of the Company. No member of the Committee shall (i) be eligible to
receive an Award under the Plan while serving on the Committee or at any time
within one year prior to his appointment to the Committee, or (ii) receive an
award of equity securities under any other plan of the Company or any of its
Affiliates while serving on the Committee or at any time prior to his
appointment to the Committee, except as permitted by Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Exchange Act") without the member ceasing
to be considered a disinterested person thereunder.
The Committee shall have full authority, subject to the terms of the
Plan, to select the persons to whom Awards shall be granted or made under the
Plan, to set the date of any such Award and any terms or conditions associated
with any such Award. The Committee also shall have the authority to establish
such rules and regulations; not inconsistent with the provisions of the Plan,
for the proper administration of the Plan and to make such determinations and
interpretations under and in connection with the Plan as it deems necessary or
advisable. The Plan, and all such rules, regulations, determinations and
interpretations, shall be binding and conclusive upon the Company, its
stockholders and all employees, and upon their respective
3
<PAGE>
legal representatives, heirs, beneficiaries, successors and assigns and upon all
other persons claiming under or through any of them.
(4) Participants. Except as hereinafter provided, all officers and key
employees of the Company or an Affiliate shall be eligible to receive Awards
under the Plan, except that Options that are intended to qualify as incentive
stock options within the meaning of Section 422 of the Internal Revenue Code
shall be granted only to employees of the Company or a Subsidiary. In addition,
Charles F. Dolan shall not be eligible to receive Awards under the Plan. Nothing
herein contained shall be construed to prevent the making of one or more Awards
at the same or different times to the same employee.
(5) Shares. The Committee may make Awards under this Plan for up
to an aggregate number of Shares equal to the sum of (i) 13,000,000 Shares,
which may be either treasury Shares or authorized but unissued Shares, and (ii)
the number of Restricted Shares, if any, purchased from employees by the
Company. Notwithstanding the foregoing, in no event shall any Participant be
granted Awards for a number of Shares exceeding 600,000 in the aggregate over
the term of the Plan. If an Award shall be paid or settled or shall expire,
lapse, terminate or be canceled for any reason without the issuance of Shares,
or if Restricted Shares shall revert back to the Company, then the Committee may
grant Awards with respect to the Shares subject to any such prior Award or the
Restricted Shares which have reverted back to the Company. Awards payable only
in cash shall not reduce the aggregate remaining number of Shares with respect
to which Awards may be made under the Plan.
The maximum number of Shares that may be issued under the Plan and the
number of Shares with respect to which Awards may be made shall be adjusted to
the extent necessary to accommodate the adjustments provided for in Section 12
hereof as well as those adjustments provided for in grants or awards made prior
to the effective date of the Plan.
(6) Options. Options granted under the Plan shall be either
incentive stock options, within the meaning of Section 422 of the Internal
Revenue Code, or non-qualified options, as determined by the Committee in its
sole discretion.
(a) Terms and Conditions. The form, terms and conditions of each
Option shall be determined by the Committee and shall be set forth in a
certificate or agreement (the "Option Certificate") signed by the Option
holder and an officer of the Company. The Option Certificate shall state
whether or not the Option is an incentive stock option. The Committee may,
in its sole discretion, establish one or more conditions to the exercise of
an Option including, without limitation, conditions the satisfaction of
which is measured by performance criteria applicable to the recipient or
the Company, as the Committee may deem appropriate, provided that, if such
Option is designated as an incentive stock option, then such condition or
conditions shall not be inconsistent with Section 422 of the Internal
Revenue Code.
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<PAGE>
(b) Exercise Price for Options. The exercise price per Share of the
Shares to be purchased pursuant to any Option shall be fixed by the
Committee at the time an Option is granted, but in no event shall it be
less than the Fair Market Value of a Share on the day on which the Option
is granted. Such exercise price shall thereafter be subject to adjustment
as required by the Option certificate relating to each Option.
(c) Duration of Options. The duration of any Option granted under this
Plan shall be for a period fixed by the Committee but shall, except as
described in the next sentence, in no event be more than ten years.
Notwithstanding the foregoing, the Option Certificate issued in connection
with a non-qualified Option granted under this Plan may provide that, in
the event the Option holder dies while the Option is exercisable, the
Option will remain exercisable by the holder's estate or beneficiary only
until the first anniversary of the holder's date of death, and whether or
not such first anniversary occurs prior to or following the expiration of
ten years from the date the Option was granted.
(d) Options Granted to Ten Percent Stockholders. No Option which is
intended to qualify as an incentive stock option shall be granted under
this Plan to any employee who, at the time the Option is granted, owns, or
is considered as owning, within the meaning of Section 422 of the Internal
Revenue Code, shares possessing more than ten percent of the total combined
voting power or value of all classes of stock of the Company or any
Subsidiary, unless the exercise price under such Option is at least 110
percent of the Fair Market Value of a Share on the date such Option is
granted and the duration of such option is no more than five years.
(e) Initial Exercisability Limitation. The aggregate Fair Market Value
(determined at the time that an Option is granted) of the Shares with
respect to incentive stock options granted in any calendar year under all
stock option plans of the Company or any corporation which (at the time of
the granting of such incentive stock option) was a parent or Subsidiary of
the Company, or of any predecessor corporation of any such corporation,
which are exercisable for the first time by an Option holder during any
calendar year shall not exceed $100,000.
(f) Settlement of an Option. When an Option is exercised pursuant to
Section 8 hereof, the Committee, in its sole discretion, may elect, in lieu
of issuing Shares pursuant to the terms of the Option, to settle the Option
by paying the Option holder an amount equal to the product obtained by
multiplying (i) the excess of the Fair Market Value of one Share on the
date the Option is exercised over the exercise price of the Option (the
"Option Spread") by (ii) the number of Shares with respect to which the
Option is exercised. The amount payable to the Option holder in these
circumstances shall be paid by the Company either in cash or in Shares
having a Fair Market Value equal to the Option Spread, or a combination
thereof, as the Committee shall determine at the time the Option is
exercised or at the time the Option is granted.
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<PAGE>
(7) Rights. At the time an Option is granted, or anytime thereafter
prior to its expiration, the Committee, in its sole discretion, may issue to the
recipient of such Option related Rights with respect to the same number of
Shares as are covered by the Option, subject to adjustment pursuant to the terms
of Section 12 hereof. The duration of any such Right shall be coextensive with
the duration of the related Option.
(a) Conjunctive and Alternative Rights. Such Rights shall entitle the
holder to receive cash from the Company:
i. in addition to the right to exercise the related Option (such
Rights being hereinafter referred to as "Conjunctive Rights"); and/or
ii. in lieu of the right to exercise the related Option (such
Rights being hereinafter referred to as "Alternative Rights");
as the Committee may determine, in its sole discretion, at the time the
Right is granted. If the Option holder is granted Conjunctive Rights, he
may exercise such Rights only if, and to the extent that, the related
Option has been exercised or is exercisable. If the Option holder is
granted Alternative Rights, he may exercise such Rights only to the extent
such related Option is exercisable and the exercise of such Alternative
Rights shall result in the cancellation of the related Option to the extent
of the number of Shares with respect to which such Alternative Rights have
been exercised and the exercise of the related Option shall result in the
cancellation of the Alternative Rights to the extent of the number of
Shares with respect to which such Option has been exercised.
(b) Terms and Conditions. Upon the exercise of any Rights, the Option
holder shall be entitled to receive from the Company an amount in cash
equal to the product obtained by multiplying (i) the excess of the Fair
Market Value of one Share on the date the Rights are exercised over the
exercise price of the related Option (the "Rights Spread") by (ii) the
number of Shares with respect to which such Rights are exercised. The form,
terms and conditions of Rights shall be determined by the Committee. A
certificate of Rights (the "Rights Certificate") signed by an officer of
the Company shall be issued to each person to whom Rights are granted.
(8) Exercise of Options and Rights. Except as otherwise provided
herein, an Option (and any related Rights), after the grant thereof, shall be
exercisable by the holder at such rate and times as may be fixed by the
Committee at the time the Option and the related Rights, if any, are granted;
provided, however, that any Rights issued to the Option holder shall be
exercisable only at the times and in the amounts at which the related Option
shall be exercisable.
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<PAGE>
All or any part of any remaining unexercised Options (and any related
Rights) granted to any person shall be exercisable in full upon the occurrence
of such special circumstances or events as, in the sole discretion of the
Committee, merits special consideration.
An Option shall be exercised by the delivery to any person who has been
designated by the Company for the purpose of receiving the same, of a written
notice duly signed by the Option holder thereof (or the representative of the
estate or the heirs of a deceased Option holder) to such effect. Unless the
Company chooses to settle the Option in cash, Shares or a combination thereof
pursuant to Section 6(f) hereof, the holder of the Option shall be required to
deliver to the Company, within five days of the delivery of the notice described
above, either cash, a check payable to the order of the Company or Shares duly
endorsed over to the Company (which Shares shall be valued at their Fair Market
Value as of the date preceding the day of such exercise) or any combination of
such methods of payment, which together amount to the full exercise price of the
Shares purchased pursuant to the exercise of the Option. Notwithstanding the
preceding sentence, the Company and the holder of the Option may agree upon any
other reasonable manner of providing for payment of the exercise price of the
Option.
Any Rights may be exercised by the holder thereof (or the
representative of the estate or the heirs of a deceased Option holder), by
delivery of a written notice of exercise of such Rights, together with the
Rights Certificate to any person who has been designated by the Company for the
purpose of receiving the same. No Option (or related Rights) may be granted
pursuant to the Plan or exercised at any time when such Option or Rights, or the
granting or exercise thereof, may result in the violation of any law or
governmental order or regulation.
Unless the Committee chooses to settle an Option in cash, Shares or a
combination thereof pursuant to Section 6(f) hereof, within a reasonable time
after exercise of an Option the Company shall cause to be delivered to the
person entitled thereto (i) a certificate for the Shares purchased pursuant to
the exercise of the Option and (ii) a check for the cash payable, if any, upon
the exercise of the Rights. If the Option and/or related Rights shall have been
exercised with respect to less than all of the Shares subject to the Option, the
Company shall also cause to be delivered to the person entitled thereto a new
Option Certificate and Rights Certificate, if applicable, in replacement of the
Option Certificate and the Rights Certificate surrendered at the time of the
exercise of the Option and Rights, indicating the number of Shares with respect
to which the Option and related Rights remain available for exercise, or the
original Option Certificate and Rights Certificate, if any, shall be endorsed to
give effect to the partial exercise thereof.
(9) Termination of Options and Rights upon Termination of Employment.
At the time an Option and the related Rights, if any, are granted, the Committee
shall determine the period of time during which the Option holder may exercise
such Option and related Rights, if any, following his termination of employment
with the Company and its Affiliates; provided, however, that an Option shall be
exercisable only to the extent such Option, by its terms, is
7
<PAGE>
exercisable as of the date the Option holder's employment is terminated, unless
such Option is made fully exercisable by the Committee pursuant to Section 8
hereof, and such exercise must be accomplished prior to the expiration of the
term of such Option and related Rights. The Committee may fix different periods
of time during which such Option and related Rights may be exercised following
the Option holder's termination of employment, depending on the cause for the
Option holder's termination of employment. The Committee shall decide whether,
and under what conditions, the Options and related Rights may continue in force
in the event of an approved leave of absence.
(10) Restricted Shares. The Committee, in its sole discretion, may
grant to employees the right to receive such number of Restricted Shares, as
determined by the Committee in its sole discretion.
(a) Issuance. The employee shall have forty-five (45) business days
from the date of such grant to pay to the Company, in cash or by check, an
amount equal to the par value of a Share multiplied by the number of
Restricted Shares which have been granted to the employee by the Committee.
Subject to the provisions of Section 15 hereof, upon the receipt of such
payment, the Company shall issue to the employee a certificate representing
such Restricted Shares. The terms and conditions of the grant of such
Restricted Shares and the Restrictions applicable to such Shares shall be
set forth in writing, in an agreement signed by the employee and an officer
of the Company (the "Restricted Shares Agreement"). In the event the
employee fails to make payment to the Company for such Restricted Shares
within ten (10) business days of the grant thereof, the grant of Restricted
Shares shall lapse and the Committee may again grant Awards with respect to
such Shares.
(b) Restrictions on Shares. In no event shall a Restricted Share be
sold, assigned, transferred, pledged or otherwise disposed of or encumbered
until the expiration of the Restricted Period which relates to such
Restricted Share. As of the date the Restricted Shares are granted, the
Committee, in its sole discretion, shall specify the dates as of which, and
the number of Shares with respect to which, Restrictions upon the
Restricted Shares shall cease. Without limiting the foregoing, the
Committee may provide with respect to any grant of Restricted Shares, that
the termination of Restrictions on such Restricted Shares may be subject
to, among other things, conditions, the satisfaction of which is measured
by one or more Performance Criteria applicable to the recipient or the
Company, an Affiliate, division or other business unit, as the Committee
may deem appropriate.
(c) Forfeiture of Restricted Shares. If the employment of an employee
by the Company and its Affiliates ceases prior to the end of the Restricted
Period for any one of the reasons specified by the Committee at the time
the Restricted Shares are granted and set forth in the Restricted Shares
Agreement, Restricted Shares held by such employee
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<PAGE>
which are subject to Restrictions shall revert back and belong to the
Company. In the event that any Restricted Shares should revert back and
belong to the Company pursuant to this section, any stock certificate or
certificates representing such Restricted Shares shall be canceled and the
Restricted Shares shall be returned to the treasury of the Company. Upon
the reversion of such Restricted Shares, the Company shall repay to the
employee or (in the case of death) to the representative of the employee's
estate, the full amount paid to the Company by the employee for such
Restricted Shares. Notwithstanding the preceding, the Restrictions upon the
Restricted Shares shall cease and upon the termination of the employee's
employment with the Company and its Affiliates the Restricted Shares shall
not revert back and belong to the Company, upon the occurrence of such
special circumstances or events as the Committee shall determine in its
sole discretion, at or after grant, merit special consideration.
(d) Right to Vote and Receive Dividends on Restricted Shares. Each
holder of Restricted Shares shall, during the Restricted Period, be the
beneficial and record owner of such Restricted Shares and shall have full
voting rights with respect thereto. During the Restricted Period, all
dividends and distributions paid upon any Restricted Share shall be
retained by the Company for the account of the holder of such Restricted
Share. Such dividends and distributions shall revert back to the Company if
for any reason the Restricted Share upon which such dividends and
distributions were paid reverts back to the Company. Upon the expiration of
the Restricted Period, all dividends and distributions made on such
Restricted Share and retained by the Company will be paid to the holder.
(11) Bonus Awards.
(a) Grant and Terms of Awards. The Committee shall determine the
employees that shall receive Bonus Awards, the number of Shares to be so
awarded, and the terms and conditions of such Bonus Awards. The Committee
shall determine whether, and under what conditions, Bonus Awards shall
remain in force in the event of the termination of the awardee's employment
with the Company and its Affiliates.
(b) Time for Issuance of Bonus Awards. Each grantee of a Bonus Award
under the Plan shall receive a letter (the "Bonus Award Letter") after he
has been selected to receive such Bonus Award, which letter shall state the
terms of the Bonus Award, including, without limitation, the amount of the
Bonus Award, the number of Shares proposed to be issued to him, the vesting
schedule for such Bonus Award and the date or dates and the conditions upon
which such Bonus Award shall be paid to the grantee. Without limiting the
foregoing, the Committee may provide with respect to any Bonus Award, that
the vesting of such Bonus Award may be subject to, among other things,
conditions, the satisfaction of which is measured by one or more
Performance Criteria applicable to the recipient or the Company, an
Affiliate, division or other business unit, as
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<PAGE>
the Committee may deem appropriate. The time of issuance of Shares to any
grantee may be accelerated by the Committee in its sole discretion. The
Committee, in its sole discretion, may instruct the Company to pay on the
date when Shares would otherwise be issued pursuant to a Bonus Award, in
lieu of such Shares, a cash amount equal to the number of such Shares
multiplied by the Fair Market Value of a Share on the date when Shares
would otherwise have been issued. If a grantee is entitled to receive other
stock, securities or other property as a result of adjustment, pursuant to
Section 12 hereof, the Committee, in its sole discretion, may instruct the
Company to pay, in lieu of such other stock, securities or other property,
cash equal to the fair market value thereof as determined in good faith by
the Committee.
(12) Certain Adjustments.
(a) Dividends, Stock Splits, Spin-offs, Conversions, Etc. If, during
the period prior to complete exercise of any Option or Right (as to such
Option or Right) or during the Restricted Period (as to Restricted Stock)
or prior to the issuance and delivery of Shares pursuant to a Bonus Award
(as to such Bonus Award) (such period being referred to herein as the
"Award Period"), there shall be declared and paid a stock or property
dividend or any other distribution by way of dividend, stock split
(including a reverse stock split), or spin-off with respect to the Shares,
or if the Class A common stock of the Company shall be converted,
exchanged, reclassified or recapitalized, or if the Shares shall be in any
way substituted for in a merger in which the entity surviving such merger
or its parent is a public Company, then:
(i) in the case of an Option or Right, the Option or Right, to
the extent that it has not been exercised, shall entitle the holder
thereof upon the future exercise of the Option or Right to such number
and kind of securities or cash or other property, subject to the terms
of the Option or Right, to which he would have been entitled had he
actually owned the Shares subject to the unexercised portion of the
Option or Right at the time of the occurrence of such dividend, stock
split, spin-off, conversion, exchange, reclassification,
recapitalization or substitution, and the aggregate purchase price
upon the future exercise of the Option or Right shall be the same as
if the Shares originally subject to the Option or Right were being
purchased or used to determine the amount of the payment to which the
holder is entitled thereunder;
(ii) in the case of a Restricted Share, the holder of the
Restricted Share shall receive, subject to the provisions of Section
10(c) hereof, the same securities or other property as are received by
the other holders of the Company's Shares pursuant to such dividend,
stock split, spin-off, conversion, exchange, reclassification,
recapitalization or substitution; and
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<PAGE>
(iii) in the case of a Bonus Award, the Bonus Award shall entitle
the holder thereof upon the future issuance and delivery of Shares
pursuant to a Bonus Award to such number and kind of securities or
cash or other property, subject to the terms of the Bonus Award, to
which he would have been entitled had he actually owned the Shares
subject to the Bonus Award at the time of the occurrence of such
dividend, stock split, spin-off, conversion, exchange,
reclassification, recapitalization or substitution.
(b) Other Events Resulting in Dilution. If, during the Award Period,
there occurs any event as to which the provisions against the effect of
dilution contained in the Plan are not strictly applicable, but the failure
to make any adjustment would not fairly protect the rights represented by
the Award in accordance with the essential intent and principles thereof,
then, in each such case, the Company shall appoint a firm of independent
certified public accountants of recognized national standing, which shall
give its opinion upon the adjustment, if any, on a basis consistent with
the essential intent and principles established in the Plan, which they
believe is necessary to preserve without dilution, the rights represented
by the Award. Upon receipt of such opinion, the Company will promptly mail
a copy thereof to the holder and shall make the adjustment described
therein.
(c) Fractional Shares or Securities. Any fractional shares or
securities payable upon the exercise of the Option or Right or to the
holder of a Restricted Share or pursuant to a Bonus Award as a result of an
adjustment pursuant to this Section 12 shall, at the election of the
Committee, be payable in cash, Shares, or a combination thereof, based upon
the fair market value of such shares or securities at the time of exercise.
(13) No Rights of a Stockholder. An Option holder, Rights holder or
grantee of a Bonus Award shall not be deemed to be the holder of, or have any of
the rights of a shareholder with respect to, any Shares subject to such Option,
any related Rights or the Bonus Award unless and until (i) the Option and/or
related Rights shall have been exercised pursuant to the terms thereof or the
Shares subject to the Bonus Award shall have vested, (ii) the Company shall have
issued and delivered Shares to the Option holder or grantee of a Bonus Award,
and (iii) said holder's name shall have been entered as a shareholder of record
on the books of the Company. Thereupon, said holder shall have full voting,
dividend and other ownership rights with respect to such Shares.
The Company will not be obligated to issue or deliver any Shares unless
and until all legal matters in connection with the issuance and delivery of
Shares have been approved by the Company's counsel and the Company's counsel
determines that all applicable federal, state and other laws and regulations
have been complied with and all listing requirements for relevant stock
exchanges have been met.
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(14) No Right to Continued Employment. Nothing contained herein or in
any Options or Rights Certificate, Restricted Share Agreement or Bonus Award
Letter shall be construed to confer on any employee any right to continue in the
employ of the Company or any Affiliate or derogate from the right of the Company
and any Affiliate to retire, request the resignation of, or discharge such
employee, at any time, with or without cause.
(15) Issuance of Shares and compliance with the Securities Laws.
(a) Certain Assurances. Before issuing or delivering any Shares to an
Option holder, or at any time prior to the end of the Restricted Period as
to any Shares, the Company may: (i) require the holder to give satisfactory
assurances that such Shares are being purchased for investment and not with
a view to resale or distribution, and will not be transferred in violation
of the applicable securities laws; (ii) restrict the transferability of
such Shares and require a legend to be endorsed on the certificates
representing the Shares; and (iii) condition the issuance and delivery of
such Shares upon the listing, registration or qualification of such Shares
upon a securities exchange or under applicable securities laws. The Company
may also condition the issuance and delivery of Shares upon compliance with
all applicable federal, state and other laws and regulations, as determined
by the Company's counsel.
(b) Registration Rights Incident to Awards. Prior to the issuance of
Shares pursuant to an Award under the Plan, the Company will cause an
appropriate registration statement covering the shares to be issued
pursuant to the Plan to be filed with the Securities and Exchange
Commission under the Securities Act, if required, and, in any event, will
cause a registration statement covering the reoffer and resale of Shares by
grantees who may be deemed to be affiliates of the Company to be so filed,
and shall use its best efforts to cause each such registration statement to
become and remain effective for a period of at least two years from the
date such Shares offered for resale were issued by the Company.
(c) Legended Stock. Each stock certificate representing Restricted
Shares shall contain an appropriate legend referring to the Plan and the
Restrictions upon such Restricted Shares. Simultaneously with delivery of
each stock certificate for Restricted Shares, the Company may cause a stop
transfer order with respect to such certificate to be placed with the
transfer agent of the Shares.
(16) Withholding. If the Company or an Affiliate shall be required to
withhold any amounts by reason of any federal, state or local tax laws, rules or
regulations in respect of the payment of cash or the issuance of Shares pursuant
to the exercise of an Option or Rights, an award of Restricted Stock or a Bonus
Award, the Company or an Affiliate shall be entitled to deduct or withhold such
amounts from any cash payments to be made to the holder. In any event, the
holder shall make available to the Company or Affiliate, promptly when requested
by
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<PAGE>
the Company or such Affiliate, sufficient funds to meet the requirements of such
withholding and the Company or Affiliate shall be entitled to take and authorize
such steps as it may deem advisable in order to have such funds made available
to the Company or Affiliate out of any funds or property to become due to the
holder.
The holder may elect, subject to the approval of the Committee, to
satisfy the requirements of such tax withholding, in whole or in part, by having
the Company withhold from the Shares which would otherwise be issued to the
holder pursuant to the exercise of an Option or Rights or a Bonus Award, Shares
having a Fair Market Value which is equal to the amount of tax required to be
withheld. The election must be irrevocable and must be made on or before the
date on which the amount of tax to be withheld is determined. In addition,
elections by holders who are subject to the restrictions of Section 16(b) of the
Exchange Act either (i) must be made at least six months before the date on
which the amount of tax to be withheld is determined, or (ii) (A) must be made
in the "window period" beginning on the third business day following the release
of the Company's quarterly or annual earnings and ending on the twelfth business
day following such release, or be made outside of such "window period" but will
only take effect in such window period, and (B) must not be made within six
months of the grant or award of the Option, Right or Bonus Award (unless the
holder's death or disability occurs prior to six months from such grant or
award).
(17) Non-transferability of Awards. Unless the Committee shall permit
(on such terms and conditions as it shall establish) an Award to be transferred
to a member of the Participant's immediate family or to a trust or similar
vehicle for the benefit of such immediate family members (collectively, the
"Permitted Transferees"), no Award shall be assignable or transferable except by
will or the laws of descent and distribution, and except to the extent required
by law, no right or interest of any Participant shall be subject to any lien,
obligation or liability of the Participant. All rights with respect to Awards
granted to a Participant under the Plan shall be exercisable during his lifetime
only by such Participant or, if applicable, the Permitted Transferees.
(18) Administration and Amendment of the Plan. The Board of Directors
or the Committee may discontinue the Plan at any time and from time to time may
amend or revise the terms of the Plan, as permitted by applicable law, except
that it may not revoke or alter, in any manner unfavorable to the recipient of
an outstanding award under the Plan, any award made under the Plan, without the
consent of the recipient of that award, nor may it amend the Plan without the
approval of the stockholders of the Company if such approval is required by Rule
16b-3 under the Exchange Act for transactions pursuant to the Plan to continue
to be exempt thereunder.
(19) Effective Date. This Plan shall become effective upon its adoption
by the Board of Directors or the Committee and shall be submitted to the
stockholders of the Company for their approval. In the event that the Plan is
not approved by stockholders within 12 months of its
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adoption by the Board of Directors, the Plan and any awards granted hereunder on
or after the date of adoption by the Board of Directors shall become null and
void, notwithstanding any other provisions of the Plan to the contrary.
(20) Assumption of Options. The Committee, in its sole discretion, may,
with the consent of the Option holder, elect to treat as an Option issued under
this Plan (but not as an incentive stock Option, within the meaning of Section
422 of the Internal Revenue Code) an Option to purchase Shares (the "Assumed
Option") which has been granted by any person other than the Company to a person
who, as of the date such Assumed Option was granted, was an employee of the
Company or an Affiliate. Thereafter, such Assumed Option shall be subject to the
terms and conditions of this Plan except that for determining the exercise price
of such Assumed Option, when and to what extent such Assumed Option may be
exercised and the expiration date of such Assumed Option, the date as of which
such Option was granted by such third party shall be treated as the date of
grant for purposes of the Plan. Subject to the foregoing, to the extent that
there is any conflict between the terms and conditions of this Plan and the
Assumed Option, the terms and conditions of this Plan shall control. The number
of Shares which may be purchased upon the exercise of any Assumed Option shall
reduce, by the same amount, the number of Shares with respect to which Options,
related Rights, Restricted Shares and Bonus Awards remain to be granted under
the Plan pursuant to Section 5 hereof. In exchange for assuming an Option
granted by someone other than the Company, the Company shall receive such
consideration, if any, from such third party which the Committee, in its sole
discretion, deems appropriate.
(21) Interpretation. Notwithstanding anything to the contrary in the
Plan, if any award of Restricted Shares or any Bonus Award is intended, at the
time of grant, to be "other performance-based compensation" within the meaning
of Section 162(m)(4)(C) of the Code, to the extent required to so qualify any
such Award hereunder the Committee shall not be entitled to exercise any
discretion otherwise authorized under the Plan with respect to such Award if the
ability to exercise such discretion (as opposed to the exercise of such
discretion) would cause such Award to fail to qualify as "other
performance-based compensation."
(22) Final Issuance Date. No Awards shall be made under this Plan after
February 13, 2006.
14
EXHIBIT 5
May 27, 1999
Cablevision Systems Corporation
1111 Stewart Avenue
Bethpage, New York 11714
Dear Sirs:
I am Executive Vice President, General Counsel and Secretary of
Cablevision Systems Corporation, a Delaware corporation (the "Company") and, in
such capacity, have acted as counsel for the Company in connection with the
registration under the Securities Act of 1933 (the "Act") of 13,000,000 shares
(the "Securities") of Class A Common Stock, par value $0.01 per share, of the
Company. In that capacity, I have examined such corporate records, certificates
and other documents, and such questions of law, as I have considered necessary
or appropriate for the purposes of this opinion. Upon the basis of such
examination, I advise you that, in my opinion:
(1) When the registration statement relating to the Securities (the
"Registration Statement") has become effective under the Act, the terms of
the sale of the Securities have been duly established in conformity with
the Company's certificate of incorporation, and the Securities have been
duly issued and sold as contemplated by the Registration Statement, the
Securities will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Delaware, and I am
expressing no opinion as to the effect of the laws of any other jurisdiction.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not thereby admit that I am
in the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Robert S. Lemle
-------------------------------------
Executive Vice President, General
Counsel and Secretary
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
The Board of Directors
Cablevision Systems Corporation:
We consent to the incorporation by reference in the registration statement on
Form S-8 of Cablevision Systems Corporation of our report dated March 12, 1999,
relating to the consolidated financial statements of Cablevision Systems
Corporation and subsidiaries as of December 31, 1998 and 1997, and for each of
the years in the three-year period ended December 31, 1998, which report appears
in the December 31, 1998 combined annual report on Form 10-K of Cablevision
Systems Corporation and CSC Holdings, Inc. and to the reference to our firm
under the heading "Experts" in the prospectus.
/s/ KPMG LLP
-------------------------------
KPMG LLP
Melville, New York
May 27, 1999
