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U.S. Securities and Exchange Commission
Washington, D.C. 20449
Notice of Exempt Solicitation
submitted pursuant to Rule 14a-6(g)
1. Name of Registrant:
Cablevision Systems Corporation
2. Name of person relying on exemption:
College Retirement Equities Fund
3. Address of person relying on the exemption:
730 Third Avenue, New York, NY 10017
4. Written materials. The following materials are attached:
Exhibit 1: Letter from Teachers Insurance and Annuity
Association - College Retirement Equities
Fund to the shareholders of Cablevision Systems
Corporation
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Exhibit 1
TEACHERS INSURANCE AND ANNUITY ASSOCIATION PETER C. CLAPMAN
COLLEGE RETIREMENT EQUITIES FUND Senior Vice President and Chief
Counsel, Investments
730 Third Avenue/New York, NY 10017-3206
212 490-9000
May 17, 2000
Dear Fellow Cablevision Systems Shareholder:
TIAA-CREF, a holder of significant equity in Cablevision Systems, is
proposing a shareholder resolution at the June 6 annual meeting of Cablevision
Systems requesting the company to reconfigure its board of directors so that a
substantial majority of directors are independent, and so that the board has
audit, compensation and nominating committees that consist entirely of
independent directors.(1) We believe that an independent board at Cablevision
Systems is in the shareholders' interest and in the long-term will benefit
shareholder value.
INSIDERS DOMINATE THE CABLEVISION BOARD
In our view, the board of Cablevision Systems clearly lacks an
independent majority, unlike most large U.S. companies. A key factor in the
dominance of insiders is the company's dual class stock structure, with
differential voting rights, which gives voting control to insiders and which
violates the principle of one-share, one-vote, a bedrock principle of
shareholder democracy. Directors and officers as a group control 17% of Class A
and Class B shares beneficially owned, but 48% of voting power. Moreover,
holders of Class B shares, a majority of which are controlled by Chairman
Charles B. Dolan, are entitled to elect 75% of directors.
Seven of 14 current board members are executives of the company, one is
a former executive who serves as a consultant to the company, one is a partner
in a law firm that provides services to the company, and two are designated by
one shareholder by virtue of a shareholder agreement with the company. ONLY
THREE OF THE DIRECTORS APPEAR TO BE INDEPENDENT BY THE DEFINITION USED IN THIS
RESOLUTION.
The board lacks any nominating committee, and its compensation
committee is not completely independent in our view. Lack of a fully-independent
compensation committee is particularly troubling at a company that has repriced
or replaced executive stock options, as Cablevision did in 1997.
CABLEVISION SOUGHT TO BLOCK A VOTE ON THIS PROPOSAL
Shareholders should be aware that Cablevision Systems went to the SEC
in an attempt to omit our proposal and deny shareholders an opportunity to vote
on this issue. The company withdrew its request after we expressed our vigorous
opposition to the attempt to deprive shareholders of their right to express
their views on this key corporate governance issue. In the last several years,
TIAA-CREF has submitted 20 shareholder resolutions similar to the board
independence resolution filed this year with Cablevision without challenge at
the SEC, until Cablevision spent shareholder money to unsuccessfully
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(1) The proposal defines "independent director" to be a director "who is not a
present or former employee of the company and, other than stock ownership, has
no significant personal or financial tie to the company that in fact or
appearance could compromise a director's loyalty to the shareholders."
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oppose the proposal. Most of these resolutions were withdrawn after the
companies took action to enhance board independence.
AN INDEPENDENT BOARD IS IMPORTANT FOR ALL SHAREHOLDERS
Although the company's charter entitles Class B shareholders to elect a
substantial majority of directors, that fact does not negate the thrust of
TIAA-CREF's shareholder resolution. There is no reason why Class B shareholders
can not, or should not, elect independent directors if that course is in the
best interests of the company and its shareholders. We believe an independent
board makes companies more credible to investors and other capital market
participants, and provides the best long-term protection against the problems
that even the best-managed companies inevitably face. An independent board also
is more likely to be in a position to fully discharge the fiduciary duties that
it owes to all shareholders.
We recognize that the company's dual-class structure makes it unlikely
that our resolution will obtain shareholder approval. However, if a substantial
proportion of Class A shareholders vote in favor of the proposal -- whatever the
votes of the insider-dominated Class B shares -- it will send a clear message to
the company and its board that many non-affiliated shareholders are in favor of
an independent board.
Director independence is essential to the exercise of sound corporate
governance practices, and 9 out of 10 S&P 500 companies have boards that are
majority independent by the definition used in our shareholder resolution. We
are concerned about the negative reaction of Cablevision's management to the
proposal, and the company's unwillingness to comply with what we believe are
good corporate governance standards.
We urge you to vote for the resolution, sending a message to the board
that shareholders value board independence. We would be happy to discuss this
matter with you in more detail. Please contact Ken Bertsch at TIAA-CREF at (212)
916-4972 with any questions you might have.
Sincerely,
/s/ Peter C. Clapman
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Peter C. Clapman
PLEASE VOTE "FOR" THE SHAREHOLDER RESOLUTION
ON CABLEVISION'S PROXY CARD
TIAA-CREF is requesting that you cast your votes FOR the shareholder proposal
on the proxy card sent out by Cablevision Systems. TIAA-CREF, which will not be
sending out a separate proxy card, is taking no public position on any other
item being considered at the annual meeting."
