Exhibit 10.2
June 11, 2003
Xx. Xxxx Xxxxxx
Re: EMPLOYMENT AGREEMENT
Dear Xx. Xxxxxx:
This letter will confirm the terms of your employment by
Cablevision Systems Corporation (the "COMPANY").
You shall continue to be employed as Vice Chairman through
December 31, 2006, with possible one-year extensions as provided below. You
agree to devote substantially all of your business time and attention to the
business and affairs of the Company. Subject to such continuing rights as each
party may have hereunder, either you or the Company may terminate your
employment hereunder at any time. Your employment term will automatically be
extended for additional one-year periods effective as of December 31, 2004
(I.E., to December 31, 2007), 2005 (I.E., to December 31, 2008) and 2006 (I.E.,
to December 31, 2009) unless either party notifies the other in writing of its
election not to extend by the preceding October 31.
Your annual base salary will be a minimum of $1,200,000,
subject to annual review and increase by the Compensation Committee of the Board
of Directors (the "COMPENSATION COMMITTEE") in its discretion. Your base salary
shall not be reduced during the time of this Agreement.
Your annual bonus will have a target of 125% of your annual
base salary, and may range from 0% to 250% of your annual base salary, as the
Compensation Committee shall determine in its discretion.
You will receive, reasonably promptly after the execution of
this Agreement, an award of stock options with a 10 year term covering 150,000
shares of Class A Common Stock with an exercise price equal to fair market value
of the underlying stock on the date of grant and vesting in equal one-third
installments on each of the first three anniversaries of the grant. The options
will be issued under the Company's Employee Stock Plan.
You will receive, reasonably promptly after the execution of
this Agreement, an award of 150,000 shares of restricted Class A Common Stock
under the Company's Employee Stock Plan, the restrictions on which and other
provisions of which will be the same as those applying to comparable awards to
other senior executives of the Company and will expire on the fourth anniversary
of the grant.
You will receive a performance award covering a three-year
performance period beginning on January 1, 2004. The size and other terms of the
award will be determined by the Compensation Committee in its discretion.
You will continue to participate in all employee benefits and
future grants (including stock options, stock appreciation and conjunctive
rights, performance awards, deferred compensation, incentive plans and similar
programs) at the level available to senior management of the Company.
You and the Company agree to be bound by the additional
covenants applicable to each that are set forth in ANNEX B, which shall be
deemed to be part of this Agreement.
If your employment with the Company is terminated (1) for any
reason by you during the thirteenth calendar month following a "Change in
Control" of the Company, (2) by the Company, or (3) by you for "Good Reason,"
and at the time of such termination under clauses (1), (2) or (3) "Cause" does
not exist, then, subject to your execution and delivery of the Company's then
standard severance agreement (modified to reflect the terms of this Agreement)
which will include, without limitation, general releases, and non-competition,
non-solicitation, non-disparagement, confidentiality and conflict of interest
provisions substantially similar to those set forth in ANNEX B, the Company will
provide you with the following benefits and rights:
1. An upfront severance payment in an amount determined
at the discretion of the Compensation Committee, but
in no event less than 2.99 times the sum of your
annual base salary and your annual target bonus as in
effect at the time your employment terminates;
2. Continued payment of premiums on the existing whole
life insurance policies on your life with Mass Mutual
and New York Life until (i) they are paid in full or
(ii) the cash value of each such policy is sufficient
that all future premiums necessary to keep such
policy in force may be paid by borrowing within such
policy against such cash value without decreasing the
death benefit;
3. All of your outstanding incentive and/or performance
grants and awards (and similar plans and programs)
shall be deemed vested and/or earned (as applicable),
and all restrictions on any restricted stock granted
to you under plans of the Company shall be
eliminated;
4. The immediate vesting of all stock options and stock
appreciation and conjunctive rights awards (and
similar plans and programs) granted to you under
plans of the Company and the continuation of the
right to exercise those options and awards for the
remainder of the term of such options and awards,
irrespective of the termination of your employment;
and
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5. The right to enter into a consulting agreement with
the Company containing the following terms and other
customary terms:
a. The terms of such consulting agreement shall
be three years from the date your employment
ceases;
b. During such term you shall provide advice
and counsel to the Company as requested but
for no more than 80 hours in any calendar
month;
c. During the first year of such term your
compensation shall be $600,000 and your
compensation shall thereafter be reviewed
annually by the Compensation Committee and
shall be such amount as the Compensation
Committee shall determine, in its
discretion, but not less than $600,000; and
d. During such term you shall be provided with
an office and adequate support.
If you cease to be an employee of the Company as a result of
your death or physical or mental disability, you (or your estate or beneficiary)
will receive payment of all your outstanding bonus and restricted share and
deferred compensation awards; the right to receive payment of all outstanding
performance awards, at such time, if any, as such awards shall be earned (as if
you remained in the continuous employ of the Company through the payment date);
and the right to exercise all your stock option and stock appreciation and
conjunctive rights awards for the remainder of the term of this Agreement or for
a period of one year, if greater, whether or not such awards shall be due and
exercisable at the time and all restrictions on any restricted stock shall be
eliminated.
If your employment with the Company is terminated (other than
for Cause) prior to December 31 of any year, you shall receive a prorated bonus
for the portion of the year you worked for the Company.
If you cease to be employed by the Company for any reason
other than your being terminated for Cause, you shall be deemed to have retired
and you shall have three years to exercise outstanding stock options and
conjunctive rights, unless you are afforded a longer period for exercise
pursuant to another provision of this Agreement.
If the Company requires that your principal office be located
in Manhattan, the Company shall provide you with use of a driver and a car
appropriate to your status and responsibilities.
The Company may withhold from any payment due hereunder any
taxes that are required to be withheld under any law, rule or regulation.
This Agreement is personal to you and without the prior
written consent of the Company shall not be assignable by you otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of
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and be enforceable by your legal representatives. This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.
TO THE EXTENT PERMITTED BY LAW, YOU AND THE COMPANY WAIVE ANY
AND ALL RIGHTS TO THE JURY TRIAL WITH RESPECT TO ANY EMPLOYMENT MATTER.
THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN THAT STATE.
Both the Company and you hereby irrevocably submit to the
jurisdiction of the courts of the State of New York and the federal courts of
the United States of America located in the State of New York solely in respect
of the interpretation and enforcement of the provisions of this Agreement, and
each of us hereby waives, and agrees not to assert, as a defense that either of
us, as appropriate, is not subject thereto or that the venue thereof may not be
appropriate. We each hereby agree that mailing of process or other papers in
connection with any such action or proceeding in any manner as may be permitted
by law shall be valid and sufficient service thereof.
This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto or their respective
successors and legal representatives. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. It is the parties' intention that this
Agreement not be construed more strictly with regard to you or the Company. From
and after the Effective Date, this Agreement shall supersede any other
employment or severance agreement or arrangements between the parties (and you
shall not be eligible for severance benefits under any plan, program or policy
of the Company).
Certain capitalized terms used herein have the meanings set
forth in ANNEX A hereto.
CABLEVISION SYSTEMS CORPORATION
/s/ Xxxxx X. Xxxxx
----------------------------
By: Xxxxx X. Xxxxx
Title: President and Chief Executive
Officer
Accepted and Agreed:
/s/ Xxxx Xxxxxx
------------------------
Xxxx Xxxxxx
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ANNEX A
DEFINITIONS ANNEX
(This Annex constitutes part of the Agreement)
"CAUSE" means your (i) commission of an act of fraud,
embezzlement, misappropriation, willful misconduct, gross negligence or breach
of fiduciary duty against the Company or an affiliate thereof, or (ii)
commission of any act or omission that results in, or may reasonably be expected
to result in, a conviction, plea of no contest, plea of NOLO CONTENDERE, or
imposition of unadjudicated probation for any felony or crime involving moral
turpitude.
Termination for "GOOD REASON" means that (i) you and the
Company have not extended this Agreement and you elect to terminate your full
time employment with the Company at the end of the term of your employment or
(ii) (1) without your consent, (A) your base salary or bonus target is reduced,
(B) the Company requires that your principal office be located outside of Nassau
County or Manhattan, (C) the Company materially breaches its obligations to you
under this Agreement, (D) you are no longer the vice chairman of the Company,
(E) you report directly to someone other than the Chairman of the Board of
Directors of the Company or the Chief Executive Officer of the Company, or (F)
your responsibilities are materially diminished, (2) you have given the Company
written notice, referring specifically to this definition, that you do not
consent to such action, (3) the Company has not corrected such action within 15
days of receiving such notice, and (4) you voluntarily terminate your employment
within 90 days following the happening of the action described in subsection (1)
above.
"CHANGE IN CONTROL" means the acquisition, in a transaction or
a series of related transactions, by any person or group, other than Xxxxxxx X.
Xxxxx or members of the immediate family of Xxxxxxx X. Xxxxx or trusts for the
benefit of Xxxxxxx X. Xxxxx or his immediate family (or an entity or entities
controlled by any of them) or any employee benefit plan sponsored or maintained
by the Company, of (1) the power to direct the management of substantially all
the cable television systems then owned by the Company in the New York City
Metropolitan Area (as hereinafter defined) or (2) after any fiscal year of the
Company in which all the systems referred to in clause (1) above shall have
contributed in the aggregate less than a majority of the net revenues of the
Company and its consolidated subsidiaries, the power to direct the management of
the Company or substantially all its assets. Net revenues shall be determined by
independent accountants of the Company in accordance with generally accepted
accounting principles consistently applied and certified by such accountants.
"NEW YORK CITY METROPOLITAN AREA" means all locations within the following
counties (A) Manhattan (New York County), Richmond, Kings, Queens, Bronx,
Nassau, Suffolk, Westchester, Rockland, Orange, Putnam, Sullivan, Dutchess, and
Ulster in New York State; (B) Xxxxxx, Bergen Passaic, Sussex, Xxxxxx, Hunterdon,
Somerset, Union, Xxxxxx, Middlesex, Xxxxxx, Monmouth, Essex and Ocean in New
Jersey; (C) Pike in Pennsylvania; and (D) Fairfield and New Haven in
Connecticut.
ANNEX B
ADDITIONAL COVENANTS
(This Annex constitutes part of the Agreement)
You agree to comply with the following covenants in addition
to those set forth in the Agreement.
1. CONFIDENTIALITY
You agree to keep confidential and otherwise refrain from
accessing, discussing, copying, disclosing or otherwise using Confidential
Information (as hereinafter defined) or any information (personal, proprietary
or otherwise) you may have learned about the Covered Individuals (as hereinafter
defined) directly or indirectly as a result of your relationship with Xxxxxxx
Xxxxx, Xxxxx Xxxxx, any member of the extended Xxxxx family or any member of the
Company's senior management team or, to the extent applicable, any of their
Board of Directors (collectively the "COVERED INDIVIDUALS"), whether prior to
your employment by the Company or subsequent to such employment ("OTHER
INFORMATION").
As used in this Agreement, "CONFIDENTIAL INFORMATION" is
information of a commercially sensitive, proprietary or personal nature and
includes, but is not limited to, information and documents that the Company has
designated or treated as confidential. It also includes, but is not limited to,
financial data; customer, guest, vendor or shareholder lists or data;
advertising, business, sales or marketing plans, tactics and strategies;
projects; technical or strategic information about the Company's on-line data,
telephone, internet service provider, cable television, programming (including
sports programming), advertising, retail electronics, PCS, DBS, theatrical,
motion picture exhibition, entertainment or other businesses; plans or
strategies to market or distribute the services or products of such businesses;
economic or commercially sensitive information, policies, practices, procedures
or techniques; trade secrets; merchandising, advertising, marketing or sales
strategies or plans; litigation theories or strategies; terms of agreement with
third parties and third party trade secrets; information about the Company's
employees, players, coaches, agents, teams or rights, compensation (including,
without limitation, bonuses, incentives and commissions), or other human
resources policies, plans and procedures, or any other non-public material or
information relating to the Company's business activities, communications,
ventures or operations.
If disclosed, Confidential Information or Other Information
could have an adverse effect on the Company's standing in the community, its
business reputation, operations or competitive position or the standing,
reputation, operations or competitive position of any of its affiliates,
subsidiaries, officers, directors, employees, teams, players, coaches,
consultants or agents or any of the Covered Individuals.
Notwithstanding the foregoing, the obligations of this
section, other than with respect to subscriber information, shall not apply to
Confidential Information which is:
a) already in the public domain;
b) disclosed to you by a third party with the right to disclose
it in good faith; or
c) specifically exempted in writing by the Company from the
applicability of this Agreement.
Notwithstanding anything elsewhere in this Agreement, you are
authorized to make any disclosure required of you by any federal, state and
local laws or judicial, arbitral or governmental agency proceedings, after
providing the Company with prior written notice and an opportunity to respond
prior to such disclosure. In addition, this Agreement in no way restricts or
prevents you from providing truthful testimony concerning the Company to
judicial, administrative, regulatory or other governmental authorities.
2. NON-COMPETE
You acknowledge that due to your executive position in the
Company and your knowledge of the Company's confidential and proprietary
information, your employment or affiliation with certain entities would be
detrimental to the Company. You agree that, without the prior written consent of
the Cablevision, you will not represent, become employed by, consult to, advise
in any manner or have any material interest in any business directly or
indirectly in any Competitive Entity (as defined below). A "COMPETITIVE ENTITY"
shall mean (1) any company that competes with any of the Company's or its
affiliates' professional sports teams in the New York metropolitan area; (2) any
company that competes with any of the Company's cable television, telephone or
on-line data businesses in the New York greater metropolitan area or that
competes with any of the Company's programming businesses, nationally or
regionally; or (3) any trade or professional association representing any of the
companies covered by this paragraph, other than the National Cable Television
Association and any state cable television association. Ownership of not more
than 1% of the outstanding stock of any publicly traded company shall not be a
violation of this paragraph. This agreement not to compete will become effective
on the date of the Agreement and will expire upon the first anniversary of the
date of your termination of employment with the Company.
3. ADDITIONAL UNDERSTANDINGS
You agree, for yourself and others acting on your behalf, that
you (and they) have not disparaged and will not disparage, make negative
statements about or act in any manner which is intended to or does damage to the
good will of, or the business or personal reputations of the Company or any of
its incumbent or former officers, directors, agents, consultants, employees,
successors and assigns or any of the Covered Individuals.
In addition, you agree that the Company is the owner of all
rights, title and interest in and to all documents, tapes, videos, designs,
plans, formulas, models, processes, computer programs, inventions (whether
patentable or not), schematics, music, lyrics and other technical, business,
financial, advertising, sales, marketing, customer or product development plans,
forecasts, strategies,
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information and materials (in any medium whatsoever) developed or prepared by
you or with your cooperation during the course of your employment by the Company
(the "MATERIALS"). The Company will have the sole and exclusive authority to use
the Materials in any manner that it deems appropriate, in perpetuity, without
additional payment to you.
4. FURTHER COOPERATION
Subject to the terms of any consulting agreement entered into
pursuant to this Agreement, following the date of termination of your employment
with the Company (the "EXPIRATION Date"), you will no longer provide any regular
services to the Company or represent yourself as a Company agent. If, however,
the Company so requests, you agree to cooperate fully with the Company in
connection with any matter with which you were involved prior to the Expiration
Date, or in any litigation or administrative proceedings or appeals (including
any preparation therefore) where the Company believes that your personal
knowledge, attendance and participation could be beneficial to the Company. This
cooperation includes, without limitation, participation on behalf of the Company
in any litigation or administrative proceeding brought by any former or existing
Company employees, teams, players, coaches, guests, representatives, agents or
vendors. The Company will pay you for your services rendered under this
provision at the rate of $5,000 per day for each day or part thereof, within 30
days of approved invoice therefore.
Unless the Company determines in good faith that you have
committed any malfeasance during your employment by the Company, the Company
agrees that its corporate officers and directors, employees in its public
relations department or third party public relations representatives retained by
the Company will not disparage you or make negative statements in the press or
other media which are damaging to your business or personal reputation. In the
event that the Company so disparages you or makes such negative statements, then
notwithstanding the "Additional Understandings" provision to the contrary, you
may make a proportional response thereto.
The Company will provide you with reasonable notice in
connection with any cooperation it requires in accordance with this section and
will take reasonable steps to schedule your cooperation in any such matters so
as not to materially interfere with your other professional and personal
commitments. The Company will reimburse you for any reasonable out-of-pocket
expenses you reasonably incur in connection with the cooperation you provide
hereunder as soon as practicable after you present appropriate documentation
evidencing such expenses. You agree to provide the Company with an estimate of
such expense before you incur the same.
5. NON-HIRE OR SOLICIT
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You agree not to hire, seek to hire, or cause any person or
entity to hire or seek to hire (without the prior written consent of the
Company), directly or indirectly (whether for your own interest or any other
person or entity's interest) any current employee of the Company, or any of its
subsidiaries or affiliates, for the term of the Agreement and until one year
after the termination of your employment. This restriction does not apply to any
employee who was discharged by the Company. In addition, this restriction will
not prevent you from providing references.
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