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<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
(MARK ONE)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
------------------------
CABLEVISION SYSTEMS CORPORATION
(FORMERLY CSC PARENT CORPORATION)
------------------------
<TABLE>
<S> <C> <C>
1-14764 DELAWARE 11-3415180
(COMMISSION FILE NUMBER) (STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
1111 STEWART AVENUE
BETHPAGE, NY 11714
(516) 803-2300
(REGISTRANT'S ADDRESS AND TELEPHONE NUMBER)
</TABLE>
------------------------
CSC HOLDINGS, INC.
(FORMERLY CABLEVISION SYSTEMS CORPORATION)
<TABLE>
<S> <C> <C>
1-9046 DELAWARE 11-2776686
(COMMISSION FILE NUMBER) (STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NO.)
1111 STEWART AVENUE
BETHPAGE, NY 11714
(516) 803-2300
(REGISTRANT'S ADDRESS AND TELEPHONE NUMBER)
</TABLE>
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
- - ----------------------------------------------------- -----------------------------------------------------
<S> <C>
Cablevision Systems Corporation American Stock Exchange
Class A Common Stock
CSC Holdings, Inc. American Stock Exchange
8 1/2% Series I Cumulative
Convertible Exchangeable Preferred Stock
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
<TABLE>
<S> <C>
Cablevision Systems Corporation None
CSC Holdings, Inc. None
</TABLE>
Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
<TABLE>
<S> <C>
Cablevision Systems Corporation Yes X No
CSC Holdings, Inc. Yes X No
</TABLE>
Indicate by a check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this
Form 10-K. ______
Aggregate market value of voting stock held by nonaffiliates of Cablevision
Systems Corporation based on the closing price at which such stock was sold on
the American Stock Exchange on March 19, 1999: $7,673,577,320.
Number of shares of common stock outstanding as of March 19, 1999:
<TABLE>
<S> <C>
Cablevision Systems Corporation Class A Common Stock -- 108,547,404
Cablevision Systems Corporation Class B Common Stock -- 43,126,836
CSC Holdings, Inc. Common Stock -- 1,000
</TABLE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------------------------------
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13, OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------------------------------------------
CABLEVISION SYSTEMS CORPORATION
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 as set forth in the pages attached hereto:
<TABLE>
<S> <C>
Item 10. -- Directors and Executive Officers of the Registrant.
Item 11. -- Executive Compensation.
Item 12. -- Security Ownership of Certain Beneficial Owners and Management.
Item 13. -- Certain Relationships and Related Transactions.
</TABLE>
<PAGE>
<PAGE>
ITEM 10. -- DIRECTORS AND EXECUTIVE
OFFICERS OF THE REGISTRANT
The Board has nominated the director candidates named below. Of the fifteen
nominees for director, eleven are to be elected by the Class B stockholders and
four are to be elected by the Class A stockholders.
All Cablevision directors are elected for one-year terms.
Personal information on each of our nominees is given below. All our nominees
currently serve as Cablevision directors. Each current director was elected by
stockholders at the last annual meeting except for Mr. Fitzgerald, who was
elected by the Board in April 1999.
The Board met five times last year. On average, Cablevision's directors attended
92% of Board and committee meetings.
If a director nominee becomes unavailable before the election, your proxy card
authorizes us to vote for a replacement nominee if the Board names one.
DIRECTORS TO BE ELECTED BY CLASS A STOCKHOLDERS
CHARLES D. FERRIS, 66, Director since 1985. Member of the law firm of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. since 1981. Chairman of the
Federal Communications Commission from October 1977 until April 1981.
RICHARD H. HOCHMAN, 53, Director since 1986. Managing Partner of Regent Capital
Partners, L.P. since April 1995. Managing Director of PaineWebber Incorporated
from 1990 to April 1995. Mr. Hochman is also a director of Evercon, Inc. and
R.A.B. Enterprises, Inc.
VICTOR ORISTANO, 82, Director since 1985. Chairman of Alda Limited Partners, a
holding company which has built and operated cable television systems in
Connecticut, Florida, New Jersey, Pennsylvania and England since 1966. Mr.
Oristano is also a member of the Board of Directors of People's Choice TV Corp.
VINCENT TESE, 56, Director since 1996. Director of the Bear Stearns Companies,
Inc. since December 1994. Chairman of Wireless Cable International, Inc. since
July 1995. Chairman of Cross Country Wireless from December 1994 to July 1995.
Mr. Tese served as Chairman and Chief Executive Officer of the New York State
Urban Development Corporation from 1985 to 1987, and as Director of Economic
Development for New York State from 1987 to December 1994. Mr. Tese also serves
on the Board of Directors of Allied Waste Industries, Inc., Bowne and Company,
Inc., Mack-Cali Realty Corp. and KeySpan Energy Corp.
DIRECTORS TO BE ELECTED BY CLASS B STOCKHOLDERS
CHARLES F. DOLAN, 72, Director since 1985. Chairman of the Company since 1985.
Chief Executive Officer of the Company from 1985 to October 1995. Founded and
acted as the General Partner of the Company's predecessor from 1973 until 1985.
Established Manhattan Cable Television in 1961 and Home Box Office in 1971.
Charles F. Dolan is the father of James L. Dolan, Patrick F. Dolan and Thomas
C. Dolan.
JAMES L. DOLAN, 43, Director since 1991. President of the Company since June
1998 and Chief Executive Officer of the Company since October 1995. Chief
Executive Officer of Rainbow Programming Holdings, Inc., a subsidiary of the
Company, from September 1992 to October 1995. Vice President of the Company
from 1987 to September 1992. James L. Dolan is the son of Charles F. Dolan and
the brother of Patrick F. Dolan and Thomas C. Dolan.
WILLIAM J. BELL, 59, Director since 1985. Vice Chairman of the Company since
1985. Joined the Company's predecessor in 1979.
MARC A. LUSTGARTEN, 52, Director since 1985. Vice Chairman of the Company since
1989. Executive Vice President of the Company from 1985 to 1989.
ROBERT S. LEMLE, 46, Director since 1988. Executive Vice President, General
Counsel and Secretary of the Company since February 1994. Senior Vice
President, General Counsel and Secretary of the Company from 1986 to February
1994.
2
<PAGE>
<PAGE>
THOMAS C. DOLAN, 46, Director since 1998. Senior Vice President and Chief
Information Officer of the Company since February 1996. Vice President and
Chief Information Officer of the Company from July 1994 to February 1996.
General Manager of the Company's East End Long Island cable system from
November 1991 through July 1994. Thomas C. Dolan is the son of Charles F. Dolan
and brother of Patrick F. Dolan and James L. Dolan.
SHEILA A. MAHONY, 57, Director since 1988. Executive Vice President,
Communications, Government and Public Affairs since April 1999. Senior Vice
President, Communications and Public Affairs of the Company from June 1995
through April 1999. Vice President of Government Relations and Public Affairs
of the Company and the Company's predecessor from 1980 to June 1995.
PATRICK F. DOLAN, 48, Director since 1991. Vice President of News of the
Company since September 1995. News Director of News 12 Long Island, a
subsidiary of the Company, since December 1991. Patrick F. Dolan is the son of
Charles F. Dolan and the brother of James L. Dolan and Thomas C. Dolan.
JOHN TATTA, 79, Director since 1985. Consultant to the Company since January
1992. Mr. Tatta serves on the Executive Committee and the Compensation
Committee of the Board of Directors. President of the Company through December
1991. Chief Operating Officer of the Company from 1985 to 1989 and of the
Company's predecessor from 1973 through 1985. Executive Officer of Manhattan
Cable Television during the 1960s and early 1970s.
LEO J. HINDERY, JR., 51, Director since 1998. Chief Executive Officer of AT&T
Broadband and Internet Services since March 1999. Director of
Tele-Communications, Inc. from May 1997 through March 1999. President and Chief
Operating Officer of Tele-Communications, Inc. since March 1997. President,
Chief Executive Officer and Director of TCI Communications, Inc. since March
1997. Founder, Managing General Partner and Chief Executive Officer of
InterMedia Partners and its affiliated entities since 1988 Director of At Home
Corporation, Knowledge Enterprises, Inc., Lenfest Group and Liberty Media
Group.
WILLIAM R. FITZGERALD, 42, Director since April 1999. Executive Vice President
and Chief Operating Officer of AT&T Broadband and Internet Services since
November 1998. Executive Vice President of Corporate Development and
Partnership Relations of TCI Communications, Inc. from December 1997 to
November 1998. Senior Vice President of Corporate Development of TCI
Communications from March 1996 to December 1997. Prior to joining TCI
Communications, Mr. Fitzgerald was Senior Vice President and a Partner at
Daniels & Associates, a leading brokerage and investment banking firm to the
communications industry.
DIRECTOR COMPENSATION
Cablevision employees receive no extra pay for serving as directors.
Non-employee directors receive a base fee of $20,000 per year; $1,000 per Board
and committee meeting attended in person, and $500 per Board and committee
meeting attend by telephone. Non-employee directors also receive $2,500 annually
per committee membership and $5,000 annually per committee chairmanship.
We also pay a portion of director compensation in stock options. Each
non-employee director receives options to purchase 10,000 shares of stock when
first elected to the Board and, if the director remains in office, options to
purchase an additional 2,000 shares each following year. The exercise price for
these options is the closing price of the stock on the date prior to the grant,
and they are all vested when granted.
BOARD COMMITTEES
The Board has three permanent committees: the Audit Committee, the Compensation
Committee and the Executive Committee. The Board does not have a Nominating
Committee.
THE AUDIT COMMITTEE is responsible for accounting and internal control matters.
Subject to stockholder approval, the committee chooses the independent public
accountants to audit the Company's financial statements. The committee consults
with the independent accountants and reviews their audit and other work. The
committee also consults with the Company's Controller and Internal Audit
department and reviews our internal controls and compliance with policies.
Committee members: Messrs. Oristano (Chairman) and Hochman.
Meetings last year: two
3
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THE COMPENSATION COMMITTEE represents the Board in discharging its
responsibilities with respect to the Company's employee stock plans and, in
doing so, administers such plans with regard to, among other things, the
determination of eligibility of employees, the granting of stock, SARs and/or
options, and the termination of such plans. This committee also determines the
appropriate levels of compensation, including salaries, bonuses, stock and
option rights and retirement benefits for members of the Company's senior
management, subject to the approval of the Board of Directors. A subcommittee of
the Compensation Committee has exclusive authority and responsibility for, and
with respect to, all annual bonus determinations and any grants or awards under
the Company's Employee Stock Plan or Long-Term Incentive Plan to any executive
officer of the Company, and to the Company's other most senior employees.
Committee members: Messrs. Hochman (Chairman), Oristano and Tatta.
Meetings last year: five
Subcommittee members: Messrs. Hochman and Oristano
Meetings last year: two
THE EXECUTIVE COMMITTEE has broad power to act on behalf of the Board. In
practice, the committee only meets when it is impractical to call a meeting of
the full Board.
Committee members: Messrs. James Dolan (Chairman), Lustgarten, Bell, Lemle,
Hochman and Tatta.
Meetings last year: twelve
OTHER COMMITTEES
In addition to standing committees, the Board of Directors from time-to-time
convenes a Special Committee, in accordance with the Company's By-laws, to
consider any proposed investment in, or advance to, Charles Dolan, members of
his family, trusts for the benefit of his family members, or companies (other
than the Company) owned or controlled by any of them. Our stockholders agreement
with AT&T allows AT&T to appoint two of the four members of the Special
Committee.
In October 1998, the Board appointed the Y2K Committee. The Y2K Committee meets
with the Company's information technology executives and the Company's outside
Y2K consultant, to monitor the progress of the Company's Y2K compliance efforts.
Y2K Committee members: Messrs. James Dolan, Thomas Dolan, Hindery and Hochman.
OUR EXECUTIVE OFFICERS
<TABLE>
<S> <C>
Our executive officers are:
Charles F. Dolan Chairman
James L. Dolan Chief Executive Officer and President
Marc A. Lustgarten Vice Chairman
William J. Bell Vice Chairman
Robert S. Lemle Executive Vice President, General Counsel and Secretary
Andrew B. Rosengard Executive Vice President, Finance and Controller
Sheila A. Mahony Executive Vice President, Communications, Government and Public Affairs
Margaret Albergo Executive Vice President, Planning and Operations
Thomas C. Dolan Senior Vice President and Chief Information Officer
</TABLE>
Biographies of Messrs. Charles Dolan, James Dolan, Thomas Dolan, Lustgarten,
Bell, Lemle and Ms. Mahony are set forth above. Biographies for Mr. Rosengard
and Ms. Albergo are below.
ANDREW B. ROSENGARD, 41, Executive Vice President, Finance and Controller of
the Company since April 1999. Executive Vice President, Financial Planning and
Controller of the Company November 1997 to April 1999. Senior Vice President
and Controller of the Company from February 1996 to November 1997. Senior Vice
President, Finance for Rainbow Programming Holdings, Inc., a subsidiary of the
Company, from 1990 to February 1996.
4
<PAGE>
<PAGE>
MARGARET ALBERGO, 45, Executive Vice President, Planning and Operations since
April 1999. Senior Vice President, Planning and Performance of the Company from
October 1996 to April 1999. Senior Vice President, Operations of Rainbow
Programming Holdings, Inc., a subsidiary of the Company from August 1995 to
October 1996. Vice President, Corporate Development of Rainbow Programming
Holdings, Inc. from 1993 to August 1995. Director of Operations and
Administration of News 12 Long Island from 1991 to 1993.
ITEM 11. -- EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION TABLES
These tables show the compensation of the Company's Chief Executive Officer and
the four other most highly paid executives.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
ANNUAL COMPENSATION ----------------------------- ALL OTHER
--------------------- SECURITIES UNDERLYING COMPENSATION
NAME/PRINCIPAL POSTION YEAR SALARY($) BONUS($) OPTIONS/SARS(#) ($)(1)
- - ------------------------------------- ---- --------- --------- ----------------------------- ------------
<S> <C> <C> <C> <C> <C>
Charles F. Dolan 1998 900,000 1,160,000 0 473,229
Chairman & Director 1997 525,000 525,000 0 315,962
1996 525,000 225,000 0 150,934
James L. Dolan 1998 900,000 2,500,000 160,000 137,682
President, Chief Executive Officer & 1997 550,000 2,750,000 0 213,684
Director 1996 555,206 225,000 0 43,188
William J. Bell 1998 700,000 1,900,000 0 119,611
Vice Chairman & Director 1997 525,000 2,150,000 700,000 117,275
1996 500,000 330,000 0 100,239
Marc A. Lustgarten 1998 750,000 2,000,000 0 103,839
Vice Chairman & Director 1997 525,000 2,250,000 720,000 58,635
1996 525,000 330,000 0 52,866
Robert S. Lemle 1998 525,000 1,000,000 0 60,539
Executive Vice President, General 1997 475,000 1,250,000 605,200 51,753
Counsel, Secretary & Director 1996 475,000 315,000 0 49,999
</TABLE>
- - ------------
(1) For 1998, represents the sum of (i) for each individual, $3,200 contributed
by CSC Holdings on behalf of such individual under the Company's Cash
Balance Pension Plan (the 'Pension Plan'), (ii) for each individual, $30,000
credited to such individual (other than Mr. James Dolan) on the books of the
Company's pursuant to the defined contribution portion of the Company's
Supplemental Benefit Plan (the 'Supplemental Plan'), (iii) for each
individual, the following amounts contributed by the Company on behalf of
such individual as a matching contribution under the Company's 401(k) Plan:
Mr. Charles Dolan $5,000, Mr. James Dolan $5,000; Mr. Bell $4,374; Mr.
Lustgarten $5,000 and Mr. Lemle $4,000, and (iv) for each individual, the
following amounts paid as a premium on individual life insurance policies
purchased by the Company for the executive officer to replace coverage under
the integrated policy previously provided by the Company: Mr. Charles Dolan
$130,276; Mr. James Dolan $37,705 Mr. Bell $82,037; Mr. Lustgarten $29,385;
and Mr. Lemle $20,268 and (v) for Mr. Charles Dolan, Mr. James Dolan, Mr.
Lustgarten and Mr. Lemle, 304,753; 91,777; 36,254; and 3,071 respectively,
representing the value of personal use of the Company's aircraft, determined
in accordance with the Standard Industry Fare Level as promulgated by the
Internal Revenue Service.
5
<PAGE>
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS/SARS ANNUAL RATES OF STOCK
GRANTED TO PRICE APPRECIATION FOR
EMPLOYEES EXERCISE OR MARKET PRICE OPTION TERM(1)
OPTION/SARS IN FISCAL BASE PRICE ON DATE OF EXPIRATION -----------------------
NAME GRANTED(#) YEAR 1998 ($/SHARE) GRANT($) DATE 5%($) 10%($)
- - ------------------------------- ----------- ------------ ----------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
James L. Dolan................. 160,000(2) 3.2% 27.69 27.69 5/29/08 2,785,600 7,060,800
</TABLE>
- - ------------
(1) The dollar amounts under these columns are the result of calculations at 5%
and 10% rates set by the SEC, and therefore are not intended to forecast
possible future appreciation of the Company's stock price. In all cases the
appreciation is calculated from the award date to the end of the option
term.
(2) Options and SARs granted on May 29, 1998 under the 1998 Employee Stock Plan.
Such options and SARs become exercisable in annual installments of 33.33%
per year, beginning on May 29, 1999 and on each of the first two
anniversaries of that date. One half of the amounts set forth are options
and one half are SARs. Options and SARs may be independently exercised.
Vesting of options and SARs may be accelerated upon a change of control of
the Company (see 'Employee Contracts and Severance and Change-In-Control
Arrangements' below).
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS/SARS AT
OPTIONS/SARS AT 12/31/98(#) 12/31/98($)
SHARES ACQUIRED VALUE --------------------------------- ---------------------------------
NAME ON EXERICISE(#) REALIZED($) EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
- - --------------------------- ---------------- ------------ --------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles F. Dolan........... -- -- -- -- -- --
James L. Dolan............. -- -- 199,332 106,668 6,981,886 2,393,362
William J. Bell............ 328,400(1) 7,969,700 508,664 233,336 21,730,802 10,033,448
Marc A. Lustgarten......... 328,400(1) 7,969,700 522,000 240,000 22,304,250 10,320,000
Robert S. Lemle............ 115,600(1) 2,886,121 579,472 191,728 24,500,170 8,244,304
</TABLE>
- - ------------
(1) Exercise of stock options and SARs granted under CSC Holdings' Amended and
Restated Employee Stock Plan and CSC Holdings' First Amended and Restated
1996 Employee Stock Plan.
LONG-TERM INCENTIVE PLANS AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR
OTHER PERIOD ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF UNTIL NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OR MATURATION OR ---------------------------------------------
NAME OTHER RIGHTS (#) PAYOUT THRESHOLD($) TARGET($) MAXIMUM($)
- - ----------------------------- -------------------- --------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Charles F. Dolan............. -- -- -- -- --
James L. Dolan............... N/A 12-36 mos. -- 4,500,000(1) --
Marc A. Lustgarten........... N/A 12-36 mos. -- 3,000,000(1) --
William J. Bell.............. N/A 12-36 mos. -- 2,500,000(1) --
Robert S. Lemle.............. N/A 12-36 mos. -- 2,000,000(1) --
</TABLE>
- - ------------
(1) Contingent cash awards granted under the Company's Long-Term Incentive Plan,
in the amounts indicated. The indicated amounts are payable in full upon the
attainment of specified performance objectives, including (a) incremental
cash flow in respect of calendar years 1998, 1999 and 2000 in excess of
specified targets, and (b) private market value of the Company at the end of
any calendar quarter starting with the fourth quarter of 1998, in excess of
specified targets.
6
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DEFINED BENEFIT PENSION PLAN
The Company's Nonqualified Supplemental Benefit Plan provides
actuarially-determined pension benefits, among other types of benefits, for nine
employees of the Company or its subsidiaries who were previously employed by
Cablevision Systems Services Corporation ('CSSC'). CSSC, which is wholly-owned
by Charles Dolan, provided management services to Cablevision Company (the
Company's predecessor) and to certain affiliates of the Company. The
Supplemental Plan is designed to provide these employees, in combination with
certain qualified benefit plans maintained by the Company and certain qualified
retirement plans formerly maintained by CSSC, with the same retirement benefit
formulae they would have enjoyed had they remained employees of CSSC and
continued to participate in the former CSSC qualified plans. The Supplemental
Plan provides that the Company may set aside assets for the purpose of paying
benefits under the Supplemental Plan, but that any such assets remain subject to
the claims of creditors of the Company.
The defined benefit feature of the Supplemental Plan provides that, upon
attaining normal retirement age (the later of age 65 or the completion of five
years of service), a participant will receive an annual benefit equal to the
lesser of 75% of his or her average compensation (not including bonuses and
overtime) for his or her three most highly compensated years and the maximum
benefit permitted by the Code (the maximum in 1998 is $130,000 for employees
who retire at age 65), reduced by the amount of any benefits paid to such
individual pursuant to the qualified defined benefit plan formerly maintained
by CSSC. This benefit will be reduced proportionately if the participant retires
or otherwise terminates employment before reaching normal retirement age.
The following sets forth the estimated annual benefits payable upon normal
retirement under the defined benefit portion of the Supplemental Plan (reduced
by any retirement benefits paid in connection with the termination of the CSSC
Defined Benefit Pension Plan) to the following persons: Mr. Charles Dolan,
$162,986; Mr. James Dolan, $0; Mr. Bell, $101,179; Mr. Lustgarten, $108,326 and
Mr. Lemle, $112,891.
EMPLOYMENT CONTRACTS AND SEVERANCE
AND CHANGE-IN-CONTROL ARRANGEMENTS
Charles Dolan has an employment agreement with the Company expiring in January
2000 with automatic renewals for successive one-year terms unless terminated by
either party at least three months prior to the end of the then existing term.
The agreement provides for annual compensation of not less than $400,000 per
year to Mr. Dolan. The agreement also provides for payment to Mr. Dolan's estate
in the event of his death during the term of such agreement, of an amount equal
to the greater of one year's base salary or one-half of the compensation that
would have been payable to Mr. Dolan during the remaining term of such
agreement.
Under the applicable award agreements, the vesting of the bonus award shares,
stock options and SARs granted to employees, including Messrs. James Dolan,
Bell, Lustgarten and Lemle, under the Company's Employee Stock Plan and its
predecessor plans, may be accelerated, in certain circumstances, upon a 'change
of control' of the Company. A 'change of control' is defined as the acquisition
by any person or group, other than Charles Dolan or members of his immediate
family (or trusts for the benefit of Charles Dolan or his immediate family) or
any employee benefit plan sponsored or maintained by the Company, of (1) the
power to direct the management of substantially all of the cable television
systems then owned by the Company in the New York City metropolitan area, or (2)
after any fiscal year of the Company in which the Company's cable television
systems in the New York City metropolitan area contributed in the aggregate less
than a majority of the net revenues of the Company and its consolidated
subsidiaries, the power to direct the management of the Company or substantially
all of its assets. Upon such a change in control, the bonus award shares, stock
options and SARs may be converted into either a right to receive an amount of
cash based upon the highest price per share of Common Stock paid in the
transaction resulting in the change of control, or into a corresponding award
with equivalent profit potential in the
7
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surviving entity, at the election of the Compensation Committee.
The Company adopted as of May 1, 1994, a severance pay plan pursuant to which an
employee whose employment is involuntarily terminated (other than for cause) or
who resigns with the approval of the Company, may receive a benefit in an amount
determined by the Company.
In March 1998, the Company entered into employment agreements with each of
Messrs. Bell, Lustgarten and Lemle, which agreements replaced previous
employment agreements. The agreements are each for a three year term ending
December 31, 2000 and may each be extended for additional one-year periods,
unless the Company or the executive notifies the other of its election not to
extend by the preceding October 31. In January 1999, the Company entered into an
employment agreement with James Dolan. This agreement is for a three year term
expiring December 31, 2001 and may be extended for additional one year periods
unless the Company or Mr. Dolan notifies the other of an election not to extend
by the preceding October 31. Under their respective agreements, these executives
are to receive annual salaries of not less than $950,000 in the case of Mr.
James Dolan, $700,000 in the case of Mr. Bell, $750,000 in the case of Mr.
Lustgarten, and $525,000 in the case of Mr. Lemle. Each agreement also provides
that in the event that the executive leaves the Company involuntarily (other
than for cause), following a change of control (as defined above), or because
such executive's compensation, title or responsibilities are reduced without his
consent, such executive shall be entitled to receive (1) a severance payment of
not less than the salary due for the remainder of the employment agreement or
one year's annual salary (or three times the sum of his annual salary plus his
prior year's annual bonus in the event of a change of control), whichever is
greater, (2) an annual bonus of not less than 100% of annual salary for Messrs.
James Dolan, Bell and Lustgarten and 65% of annual salary for Mr. Lemle, pro
rated for the months worked during such year, (3) the right to receive payment
of all bonus shares and deferred compensation awards, and to exercise all
stock option and conjunctive right awards for the remainder of the term of
the agreement, or a period of 180 days, if greater, whether or not such awards
are due or exercisable at the time, (4) the right to receive payment of all
outstanding long-term performance awards, at such time, if any, as such awards
shall be earned (as if such employee remained in the continuous employ of the
Company through the payment date), (5) three years payment of life insurance
premiums and (6) the right to participate in the Company's health plan for
retired executives.
In February 1996, the Compensation Committee adopted the Cablevision Systems
Corporation Supplemental Life Insurance Premium Payment Plan (the 'Supplemental
Life Insurance Premium Payment Plan'). Under the Supplemental Life Insurance
Premium Payment Plan, at all times following a change of control (as detailed
above) the Company would pay on behalf of certain executive officers of the
Company, including Messrs. James Dolan, Bell, Lustgarten and Lemle, all premiums
on life insurance policies purchased by the Company for such executive officers,
up to the aggregate amount of additional premiums, if any, necessary to fund
fully the face amount of such executive officer's policy as in effect
immediately prior to the change of control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As disclosed above, the Compensation Committee of the Board of Directors is
comprised of Messrs. Oristano, Tatta and Hochman. Mr. Tatta, the former
President of CSC Holdings is currently a consultant to the Company. Mr. Oristano
and Mr. Hochman are not employees of the Company. Certain relationships and
transactions between the Company and those individuals or their affiliates is
described under Item 13. Certain Relationships and Related Transactions.
8
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ITEM 12. -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
This table shows the number and percent of shares of Class A and Class B Common
Stock owned of record and beneficially as of March 1, 1999 by each director and
each executive officer of the Company named in the summary compensation table.
The table also shows the name, address and the number and percent of shares of
Class A and Class B Common Stock owned by persons beneficially owning more than
five (5%) percent of either class.
<TABLE>
<CAPTION>
COMBINED VOTING
POWER OF
CLASS A CLASS B CLASS A &
COMMON COMMON CLASS A & CLASS B CLASS B
STOCK STOCK COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OWNED(1) OWNED(1)(2) OWNED(1)(2) OWNED(1)(2)
- - ------------------------------------------- ------------------ ------------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles F. Dolan(3)(4)(5)
1111 Stewart Avenue
Bethpage, NY 11714......................... 945,477 * 18,603,100 43.1% 19,548,577 12.9% 34.6%
Charles F. Dolan
1997 Grantor Retained
Annuity Trust(5)........................... -- -- 4,534,024 10.5% 4,534,024 3.0% 8.4%
Capital Research and
Management Company(6)
333 South Hope Street
Los Angeles, CA 90071...................... 6,006,930 5.5% -- -- 6,006,930 4.0% 1.1%
Gabelli Funds, Inc.(7)
GAMCO Investors, Inc.(7)
One Corporate Center
Rye, NY 10580.............................. 10,359,171 9.5% -- -- 10,359,171 6.8% 1.9%
AT&T Corporation(8)
32 Avenue of the Americas
New York, NY 10013
Tele-Communications, Inc.(8)
Country Cable III, Inc.(8)
TCI CSC II, Inc.(8)
5619 DTC Parkway
Englewood, CO 80111........................ 49,982,572 46.1% -- -- 49,982,572 33.0% 2.3%
James L. Dolan
(11)(14)(22)(23)........................... 103,666 * 3,018,964 7.0% 3,122,630 2.1% 5.6%
Marc Lustgarten(10)(11).................... 265,052 * -- -- 265,052 * *
William J. Bell(10)(11).................... 255,526 * -- -- 255,526 * *
Robert S. Lemle(10)(11).................... 334,606 * -- -- 334,606 * *
Sheila A. Mahony(11)....................... 32,253 * -- -- 32,253 * *
Thomas C. Dolan
(11)(16)(21)(25)(26)....................... 33,600 * 2,574,744 6.0% 2,608,344 1.7% 4.8%
Patrick F. Dolan
(11)(15)(20)(24)........................... 35,416 * 3,269,640 7.6% 3,305,056 2.2% 6.1%
John Tatta(9).............................. 80,000 * -- -- 80,000 * *
Charles D. Ferris(10)(12).................. 37,000 * -- -- 37,000 * *
Richard H. Hochman(12)..................... 44,376 * -- -- 44,376 * *
Victor Oristano(12)(13).................... 40,000 * -- -- 40,000 * *
Vincent Tese(12)........................... 14,000 * -- -- 14,000 * *
Leo J. Hindery, Jr.(8)(12)................. 12,000 * -- -- 12,000 * *
William Fitzgerald(8)...................... -- -- -- -- -- -- --
</TABLE>
9
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<PAGE>
<TABLE>
<CAPTION>
COMBINED VOTING
POWER OF
CLASS A CLASS B CLASS A &
COMMON COMMON CLASS A & CLASS B CLASS B
STOCK STOCK COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OWNED(1) OWNED(1)(2) OWNED(1)(2) OWNED(1)(2)
- - ------------------------------------------- ------------------ ------------------ ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
All executive officers
and directors as a group
(17 persons)
(3)(4)(5)(8)(9)(10)(11)
(12)(13)(14)(15)(16)(20)
(21)(22)(23)(24)(25)(26)................... 2,295,845 2.1% 32,000,472 74.2% 34,296,317 22.4% 59.6%
Paul J. Dolan(17)(22)(23)
(24)(25)(26)
100 Corporate Place
Suite 150
Chardon, OH 44024.......................... 14,800 * 7,496,208 17.4% 7,511,008 5.0% 13.6%
Kathleen M. Dolan(17)(23)(27)
1111 Stewart Avenue
Bethpage, NY 11714......................... 1,597,000 * 2,866,964 6.6% 4,463,964 2.9% 5.6%
Mary S. Dolan(18)(20)
300 So. Riverside Plaza
Suite 1480
Chicago, IL 60606.......................... 12,000 * 2,389,604 5.5% 2,401,604 1.6% 4.4%
Deborah A. Dolan(18)(24)(27)
1111 Stewart Avenue
Bethpage, NY 11714......................... 1,597,000 * 3,266,964 7.6% 4,863,964 3.2% 6.3%
Matthew J. Dolan(19)(21)
231 Main Street
Court House Annex
Chardon, OH 44024.......................... 6,000 * 2,389,604 5.5% 2,395,604 1.6% 4.4%
Marianne E. Weber(19)(25)(26)(27)
1111 Stewart Avenue
Bethpage, NY 11714......................... 1,597,000 * 2,539,420 5.9% 4,136,420 2.7% 5.0%
John MacPherson(28)
21 Old Town Lane
Halesite, NY 10019......................... 165,600 * 7,560,296 17.5% 7,725,896 5.1% 14.0%
</TABLE>
- - ------------
(1) Beneficial ownership of a security consists of sole or shared voting power
(including the power to vote or direct the vote) and/or sole or shared
investment power (including the power to dispose or direct the disposition)
with respect to the security through any contract, arrangement,
understanding, relationship or otherwise. Unless indicated, beneficial
ownership disclosed consists of sole voting and investment power.
Beneficial ownership of Class A Common Stock is exclusive of the shares of
Class A Common Stock that are issuable upon conversion of shares of Class B
Common Stock.
(2) Class B Common Stock is convertible into Class A Common Stock at the option
of the holder on a share for share basis. The holder of one share of Class
A Common Stock is entitled to one vote at a meeting of stockholders of the
Company, and the holder of one share of Class B Common Stock is entitled to
ten votes at a meeting of stockholders of the Company except in the
election of directors.
(3) Includes 780,205 shares of Class A Common Stock owned by the Dolan Family
Foundation, a New York not-for-profit corporation, the sole members of
which are Charles Dolan and his wife, Helen A. Dolan. Neither Mr. Dolan nor
Mrs. Dolan has an economic interest in such shares, but Mr. Dolan and his
wife share the ultimate power to vote and dispose of such shares. Under
certain rules of the Securities and Exchange Commission, so long as Mr.
Dolan and his wife retain such powers, each of Mr. Dolan and his wife is
deemed to have beneficial ownership thereof. Also includes 20,000 shares of
Class A Common Stock owned directly by Mrs. Dolan. The number of shares
held as indicated includes 123,072 shares resulting from the assumed
conversion of 83,000 shares of 8.5% Series I Convertible Exchangeable
Preferred Stock ('Series I Preferred Stock') (1.4828 shares of Common Stock
for each share of Series I Preferred Stock).
(4) Does not include an aggregate 9,917,856 shares of Class B Common Stock and
152,000 shares of Class A Common Stock held by trusts for the benefit of
Dolan family interests (the 'Dolan Family Trusts'). Mr. Dolan disclaims
beneficial ownership of the shares owned by the Dolan Family Trusts, in
that he has neither voting nor investment power with respect to such
shares.
(5) Includes 4,534,024 shares of Class B Common Stock by the Charles F. Dolan
1997 Grantor Retained Annuity Trust (the 'GRAT'). The GRAT was established
on April 30, 1997 by Charles F. Dolan for estate planning purposes. The
GRAT, through its trustees, has the sole power to vote and dispose of such
shares. The two co-trustees of the trust are Charles F. Dolan and his wife,
Mrs. Dolan. For three years, the GRAT will pay to Charles F. Dolan, and in
the event of his death, to
(footnotes continued on next page)
10
<PAGE>
<PAGE>
(footnotes continued from previous page)
Mrs. Dolan, a certain percentage of the fair market value of the property
initially contributed to the GRAT (the 'Annuity'). If Mr. Dolan is living
at the expiration of the term of the GRAT, the remainder will pass into
another trust for the benefit of Mrs. Dolan and the descendants of Charles
F. Dolan. If Mr. Dolan is not living at the expiration of the term of the
GRAT, the then principal of the GRAT will pass to his estate or to Mrs.
Dolan.
(6) The Company has been informed that as of December 31, 1998, Capital
Research and Management Company, a registered investment adviser acted as
investment adviser with respect to 6,006,930 shares of Class A Common
Stock. The number of shares held as indicated includes 1,126,930 shares
resulting from the assumed conversion of 760,000 shares of Series I
Preferred Stock.
(7) The Company has been informed that certain operating subsidiaries of
Gabelli Funds, Inc. ('GFI') beneficially held, or exercise investment
discretion over various institutional accounts which beneficially held as
of January 21, 1999, an aggregate of 10,359,171 shares of Class A Common
Stock, including approximately 17,273 shares of Class A Common Stock that
may be obtained upon conversion of shares of Series I Preferred Stock held
by such entities on such date. The Company has been informed that GAMCO
Investors, Inc., an investment advisor registered under the Investment
Advisors Act of 1940 and a wholly-owned subsidiary of GFI, held sole
dispositive power over 7,555,775 of such shares and sole voting power over
7,343,275 of such shares.
(8) The Company has been informed that AT&T beneficially owned, through TCI and
its subsidiaries, an aggregate of 49,982,572 shares of Class A Common
Stock. These shares include 17,918,024 shares held directly by Country
Cable III, Inc. and 26,794,192 shares held directly by TCI CSC II, Inc.
Each of Country Cable III, Inc. and TCI CSC II, Inc. is an indirect wholly
owned subsidiary of AT&T. AT&T or its subsidiaries have sole voting and
investment power with respect to all such shares. AT&T is a party to a
Stockholders Agreement with the Company and holders of Class B Common
Stock, which agreement, among other things, requires the Class B
Stockholders to vote to elect for director, up to two persons nominated by
AT&T, and requires AT&T to vote its shares of Class A Common Stock in
proportion to the vote of the other, non-affiliated Class A Stockholders,
on certain matters. Each of Messrs. William Fitzgerald and Leo Hindery,
each a Director and Nominee for Director of the Company, is an officer and
a director of TCI. Each of Messrs. Fitzgerald and Hindery disclaim any
beneficial ownership interest in these shares.
(9) Includes 46,200 shares of Class A Common Stock by the John Tatta Charitable
Remainder Unitrust UAD 12/16/98 (the 'JTCRT'). The JTCRT was established on
December 16, 1998 by John Tatta for Charitable purposes. Mr. Tatta,
disclaims beneficial ownership of the stock beneficially owned by trusts
for the benefit of his family, in that he has neither voting nor investment
power with respect to such shares. Does not include 80,000 shares of Class
A Common Stock held by the Tatta Family Group L.P. The Tatta Family Group
L.P. is a New York limited partnership, the general partners of which are
six trusts for the benefit of Tatta family interests (the co-trustees of
each of which are Stephen A. Carb, Esq. and either Deborah T. DeCabia or
Lisa T. Crowley, each a daughter of John Tatta who has been a director
since 1985 and was the President of CSC Holdings from 1985 until 1991), and
the limited partners of which are trusts for the benefit of Mr. Tatta and
Tatta family interests (the trustee of each of which is Stephen A. Carb,
Esq.).
(10) Includes shares owned by children of the individuals listed, which shares
represent less than 1% of the outstanding Class A Common Stock.
(11) Includes shares of Class A Common Stock issuable upon the exercise of
options granted pursuant to the Company's Employee Stock Plan which on
March 1, 1999 were unexercised but were exercisable within a period of 60
days from that date. These amounts include the following number of shares
for the following individuals: Mr. James Dolan 99,666; Mr. Bell 254,332;
Mr. Lemle 289,736; Mr. Lustgarten 261,000; Ms. Mahony 31,668; Mr. Patrick
Dolan 22,150 and Mr. Thomas Dolan 22,150; all executive officers and
directors as a group 1,039,539.
(12) Includes shares of Class A Common Stock issuable upon the exercise of
options granted pursuant to the Company's Stock Option Plan for
Non-Employee Directors, which on March 1, 1998 were unexercised but were
exercisable within a period of 60 days from that date. These amounts
include the following number of shares for the following individuals: Mr.
Ferris 36,000; Mr. Hochman 36,000; Mr. Oristano 36,000; Mr. Tese 14,000 and
Mr. Hindery 12,000 .
(13) The shares listed are owned by the Oristano Foundation, a charitable trust
the trustees of which are members of the Oristano family.
(14) Includes 152,000 shares of Class B Common Stock owned by trusts for minor
children as to which James L. Dolan disclaims beneficial ownership. Also
includes 3,018,964 shares of Class B Common Stock held by two family trusts
of which James L. Dolan is a contingent beneficiary and a co-trustee, as to
which James L. Dolan disclaims beneficial ownership, which shares are also
described in footnotes (22) and (23).
(15) Includes 38,000 shares of Class B Common Stock owned by trust for a minor
child as to which Patrick F. Dolan disclaims beneficial ownership. Also
includes 3,269,640 shares of Class B Common Stock held by two family trusts
of which Patrick F. Dolan is a contingent beneficiary and a co-trustee, as
to which Patrick F. Dolan disclaims beneficial ownership, which shares are
also described in footnotes (20) and (24).
(16) Includes 2,574,744 shares of Class B Common Stock held by three family
trusts of which Thomas C. Dolan is a contingent beneficiary and a
co-trustee, as to which Thomas C. Dolan disclaims beneficial ownership,
which shares are also described in footnotes (21) (25) and (26).
(17) Includes 1,212,464 shares of Class B Common Stock held by the DC Kathleen
Trust, the co-trustees of which are Kathleen Dolan and Paul Dolan.
(18) Includes 1,212,464 shares of Class B Common Stock held by the DC Deborah
Trust, the co-trustees of which are Deborah Dolan and Mary Dolan.
(footnotes continued on next page)
11
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<PAGE>
(footnotes continued from previous page)
(19) Includes 1,177,140 shares of Class B Common Stock held by the DC Marianne
Trust, the co-trustees of which are Marianne E. Weber and Matthew Dolan.
(20) Includes 1,177,140 shares of Class B Common Stock held by the DC Patrick
Trust, the co-trustees of which are Patrick Dolan and Mary Dolan.
(21) Includes 1,212,464 shares of Class B Common Stock held by the DC Thomas
Trust, the co-trustees of which are Thomas Dolan and Matthew Dolan.
(22) Includes 1,212,464 shares of Class B Common Stock held by the DC James
Trust, the co-trustees of which are James Dolan and Paul Dolan.
(23) Includes 1,654,500 shares of Class B Common Stock held by the Dolan
Descendants Trust, the co-trustees of which are James Dolan, Kathleen Dolan
and Paul Dolan.
(24) Includes 2,054,500 shares of Class B Common Stock held by the Dolan Progeny
Trust, the co-trustees of which are Patrick Dolan, Deborah Dolan and Paul
Dolan.
(25) Includes 1,190,500 shares of Class B Common Stock held by the Dolan
Grandchildren Trust, the co-trustees of which are Thomas Dolan, Marianne E.
Weber and Paul Dolan.
(26) Includes 171,780 shares of Class B Common Stock held by the Dolan Spouse
Trust, the co-trustees of which are Thomas Dolan, Marianne E. Weber and
Paul Dolan.
(27) Includes 1,593,000 shares of Class A Common Stock owned by the Dolan
Children's Foundation, a New York not-for-profit corporation, the sole
members of which are Marianne Dolan Weber, Kathleen M. Dolan and Deborah
Dolan Sweeney. Each of which do not have an economic interest in such
shares, but each share the ultimate power to vote and dispose of such
shares.
(28) Includes an aggregate of 7,560,296 shares of Class B Common Stock and an
aggregate of 152,000 shares of Class A Common Stock each held by various
trusts for the benefit of family members of Charles F. Dolan's family for
which Mr. John MacPherson serves as Trustee and, in such capacity,
exercises sole voting power and dispositive power with respect to such
shares.
------------------------------------------
The Dolan family interests (other than Charles Dolan) have agreed with the
Company that in the case of any sale or disposition by Dolan family interests
(other than Charles Dolan) of shares of Class B Common Stock to a holder other
than Charles Dolan or Dolan family interests, the Class B Common Stock will be
converted on the basis of one share of Class A Common Stock for each share of
Class B Common Stock.
Charles Dolan and trusts for the benefit of members of his family, by virtue of
their ownership of Class B Common Stock, are able collectively to control
stockholder decisions on matters in which holders of Class A and Class B common
Stock vote together as a class, and to elect up to 75% of the Company's Board of
Directors.
Registration Rights. The Company has granted to each of Charles Dolan, certain
Dolan family interests and the Dolan Family Foundation the right to require the
Company to register, at any time prior to the death of both Mr. Dolan and his
wife, the shares of Class A Common Stock held by them provided that the shares
requested to be registered shall have an aggregate market value of at least
$3,000,000. There is no limitation on the number or frequency of the
registrations that such parties can demand pursuant to the preceding sentence.
After the death of both Mr. Dolan and his wife, such parties will be
permitted one additional registration. In addition, the company has granted such
parties 'piggyback' rights pursuant to which they may require the Company to
register their holdings of Class A Common Stock on any registration statement
under the Act with respect to an offering by the Company or any security holder
thereof (other than a registration statement on Form S-8 and S-4 or any
successor form thereto).
The Company has granted Mr. Tatta and certain Tata family interests the right to
require the Company, on any date, with the consent of Charles Dolan, his widow
or the representative of the estate of Mr. Dolan or his wife, to register the
shares of Class A Common Stock held by them provided that the shares requested
to be registered have an aggregate market value of at least $3,000,000. After
the death of both Charles Dolan and his wife, such parties will be permitted to
demand only one registration. Such parties have also been granted piggyback
registration rights identical to those described above, provided that in certain
instances they receive written consent of Mr. Dolan, his widow or the
representative of the estate of Mr. Dolan or his wife.
Pursuant to the Stockholders Agreement, dated as of March 4, 1998, among the
Company, AT&T and certain holders of Class B Common Stock, the Company granted
to AT&T certain registra-
12
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<PAGE>
tion rights with respect to shares of Class A Common Stock held by AT&T or
certain of its affiliates. AT&T is permitted to request that the Company file a
registration statement registering not less than 2,000,000 shares, on a demand
basis, not more than once each year. In additon, AT&T was granted 'piggy-back'
registration rights on any registration of at least $100,000,000 of shares of
Class A Common Stock (based on the market value thereof on the date of filing)
by the Company, subject to certain limitations.
The demand and piggyback registration rights described above are subject to
certain limitations which are intended to prevent undue interference with the
Company's ability to distribute securities.
ITEM 13. -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has made investments in and advances to certain affiliates of which
Mr. Dolan or Dolan family interests had or have ownership interests.
On August 23, 1996, the Company entered into an agreement with Northcoast
Operating Co., Inc. ('Northcoast') and certain of its affiliates, to form a
limited liability company (the 'LLC') to participate in the auctions conducted
by the Federal Communications Commission ('FCC') for certain licenses to conduct
a personal communications service ('PCS') business. The Company has contributed
an aggregate of approximately $31 million to the LLC (either directly or through
a loan to Northcoast) and holds a 49.9% interest in the LLC and certain
preferential distribution rights. Northcoast is a Delaware corporation
controlled by John Dolan. John Dolan is a nephew of Charles F. Dolan and cousin
of James Dolan.
Richard H. Hochman, a director and a nominee for director, was, until April,
1995, a Managing Director of PaineWebber Incorporated. PaineWebber Incorporated
has performed investment banking services for entities affiliated with Charles
Dolan.
Charles D. Ferris, a director and a nominee for director, is a partner in the
law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. which provides
legal services to the Company and certain of its subsidiaries.
Vincent Tese, a director and a nominee for director, is a director of The Bear
Stearns Companies, Inc. Bear Stearns has performed investment banking services
for the Company.
Each of Leo J. Hindery, Jr. and William R. Fitzgerald, each a director and a
nominee for director, is an officer of AT&T. As described above, AT&T holds
approximately 33% of the Company's common stock and has certain contractual
rights under the Stockholders Agreement, including rights of consultation
concerning certain transactions including transfers of stock by Class B
stockholders and transfers of assets by the Company. AT&T also owns, or holds
ownership interests in, various companies that transact business with the
Company on a regular basis.
CONFLICTS OF INTEREST
Charles Dolan and certain other principal officers of the Company and various
affiliates of the Company are subject to certain conflicts of interest. These
conflicts include, but are not limited to, the following:
Business Opportunities. Charles Dolan may from time to time be presented with
business opportunities which would be suitable for the Company and affiliates of
the Company in which Mr. Dolan and his family have varying interests. Mr. Dolan
has agreed that he will own and operate cable television systems only through
the Company, except for cable television systems which the company elects not to
acquire under its right of first refusal. Mr. Dolan will offer to the Company
the opportunity to acquire or invest in any cable television system or franchise
therefor or interest therein that is offered or available to him or his family
interests. If a majority of the members of the Board of Directors, who are not
employees of the Company or any of its affiliates (the 'Independent Directors')
rejects such offer, Mr. Dolan or such family interests may acquire or invest in
such cable television system or franchise therefor or interest therein
individually or with others on terms no more favorable to Mr. Dolan than those
offered to the Company. Mr. Dolan's interests in companies other than the
Company, may conflict with his interest in the Company.
Except for the limitations on the ownership and operation of cable television
systems as
13
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<PAGE>
described above, Mr. Dolan is not subject to any contractual limitations with
respect to his other business activities and may engage in programming and other
businesses related to cable television. A significant portion of Mr. Dolan's
time may be spent, from time to time, in the management of such affiliates. Mr.
Dolan will devote as much of his time to the business of the Company as is
reasonably required to fulfill the duties of his office. During 1998,
substantially all of Mr. Dolan's professional time was devoted to the business
of the Company.
In the event that Charles Dolan or any Dolan family interest decides to offer
(other than to any Dolan family interest or an entity affiliated with Mr. Dolan)
for sale for his, her or its account any of his, her or its ownership interest
in any cable television system or franchise therefor, he, she or it will
(subject to the rights of third parties existing at such time) offer such
interest to the Company. Mr. Dolan or such Dolan family interest may elect to
require that, if the Company accepts such offer, up to one-half of the
consideration for such interest would consist of shares of Class B Common Stock,
which shares will be valued at the prevailing market price of the Class A Common
Stock and the remainder would consist of shares of Class A Common Stock and/or
cash. If a majority of the Independent Directors rejects such offer, Mr. Dolan
or such Dolan family interest may sell such interest to third parties on terms
no more favorable to such third parties than those offered to the Company.
The Company's by-laws provide that the Company shall make any investment in or
advance, other than any investment or advance that constitutes compensation for
services rendered to the Company, to Charles Dolan and affiliates of Charles
Dolan (as defined therein) only if such investment or advance is approved by a
Special Committee of the Board of Directors comprised of two non-employee
directors and, subject to the provisions of the AT&T Stockholders Agreement, two
directors nominated by AT&T.
14
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized on the
30th day of April, 1999.
CABLEVISION SYSTEMS CORPORATION
CSC HOLDINGS, INC.
By: /s/ ROBERT S. LEMLE
.................................
Name: Robert S. Lemle
Title: Executive Vice President,
General Counsel and Secretary
By: /s/ ANDREW B. ROSENGARD
.................................
Name: Andrew B. Rosengard
Title: Executive Vice President,
Finance and Controller
15
