EMPLOYMENT AGREEMENT
Exhibit 10.13
EMPLOYMENT
AGREEMENT, dated as of June _______, 2011, between AMC Networks Inc., a Delaware corporation
(“AMC”), and Xxxxxxx X. Xxxxx (“Xxxxxxx Xxxxx”).
W I T N E S S E T H :
WHEREAS, AMC was incorporated as an indirect, wholly-owned subsidiary of Cablevision Systems
Corporation (“Cablevision”);
WHEREAS, Cablevision intends to spin-off AMC and its subsidiaries;
WHEREAS, effective upon the consummation of the spin-off, AMC wishes to secure the services of
Xxxxxxx Xxxxx as its Executive Chairman;
WHEREAS, Xxxxxxx Xxxxx has indicated his willingness to execute this Agreement with respect to
such employment on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises, the mutual covenants and agreements
hereinafter set forth, and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Term of Employment. This Agreement shall be effective for a one year term commencing
on the date on which the spin-off of AMC from Cablevision is consummated (the “Effective Date”) and
will be extended automatically for successive one year terms unless terminated by either party by
written notice to the other party at least three months prior to the end of the then existing term
of this Agreement. If the spin-off of AMC does not occur by June 30, 2012, this Agreement shall be
null and void and of no force or effect.
2. Duties. During the period of this Agreement, Xxxxxxx Xxxxx initially will be employed
as Executive Chairman. As such, Xxxxxxx Xxxxx will have such duties consistent with his position
as may be assigned to him, from time to time, by the Board of Directors of AMC.
Xxxxxxx Xxxxx agrees that he will faithfully perform the duties assigned to him hereunder and
that he will devote such business time and attention to the business and affairs of AMC as
described herein.
Xxxxxxx Xxxxx represents that his employment hereunder and compliance by him with the terms
and conditions of this Agreement will not conflict with or result in the breach of any agreement to
which he is a party or by which he may be bound.
AMC acknowledges that, in addition to Xxxxxxx Xxxxx’x services pursuant to this Agreement, he
will simultaneously serve, and is expected to devote most of his business time and attention to
serving, as Chairman of Cablevision. AMC understands that Xxxxxxx Xxxxx is entering into an
amendment to his Employment Agreement with Cablevision contemporaneous with the execution of this
Agreement and recognizes and agrees that Xxxxxxx Xxxxx’x
responsibilities to Cablevision will preclude him from devoting a substantial portion of his
time and attention to AMC’s affairs. In addition, as recognized in AMC’s Certificate of
Incorporation, there may be certain potential conflicts of interest and fiduciary duty issues
associated with Xxxxxxx Xxxxx’x dual roles at AMC and Cablevision. AMC recognizes and agrees that
none of (i) Xxxxxxx Xxxxx’x dual responsibilities at AMC and Cablevision, (ii) Xxxxxxx Xxxxx’x
inability to devote a substantial portion of his time and attention to AMC’s affairs, (iii) the
actual or potential conflicts of interest and fiduciary duty issues that are waived in AMC’s
Certificate of Incorporation, or (iv) any actions taken, or omitted to be taken, by Xxxxxxx Xxxxx
in good faith to comply with his duties and responsibilities to AMC or Cablevision in light of his
dual responsibilities to AMC and Cablevision, shall be deemed to be a breach by Xxxxxxx Xxxxx of
his obligations under this Agreement.
3. Compensation; Benefits. During the term of this Agreement, as compensation for the
services to be performed by Xxxxxxx Xxxxx under section 2 of this Agreement, AMC will pay Xxxxxxx
Xxxxx a minimum annual base salary of $400,000, payable in accordance with the reasonable salary
payment policies of AMC and subject to annual review during the term of this Agreement in
accordance with AMC’s practices, and to increases determined in the discretion of AMC. Xxxxxxx
Xxxxx will be eligible for an annual bonus, with a target bonus amount of 175% of his annual base
salary, as the Compensation Committee of the Board of Directors of AMC (the “Compensation
Committee”) shall determine in its discretion in accordance with applicable plans or programs of
AMC. Any such annual bonus for 2011 shall be prorated to reflect the period of Xxxxxxx Xxxxx’x
employment with AMC following the Effective Date. Xxxxxxx Xxxxx will also be eligible to
participate in long-term cash or equity programs and arrangements of AMC at the level determined by
the Compensation Committee, in its discretion consistent with Xxxxxxx Xxxxx’x role and
responsibilities as Executive Chairman. In calendar year 2012, for example, Xxxxxxx Xxxxx will be
entitled to receive one or more long-term cash and/or equity awards with an aggregate target value
of $900,000, all as determined by the Compensation Committee in its discretion in accordance with
applicable plans or programs of AMC. Although there is no guarantee, it is currently expected that
long-term cash or equity awards of similar aggregate target values will be made to Xxxxxxx Xxxxx
annually.
Xxxxxxx Xxxxx will be eligible to participate in the AMC Networks Inc. Excess Savings Plan
(the “Excess Savings Plan”), when established, and AMC will provide Xxxxxxx Xxxxx with life,
accidental death and dismemberment and business travel accident insurance. Prior to the time the
Excess Savings Plan is established, Xxxxxxx Xxxxx will be eligible to participate in the
Cablevision Excess Savings Plan with respect to his compensation from AMC on the same terms on
which other employees of AMC are eligible to participate in such plan. Any such life, accidental
death and dismemberment and business travel accident insurance will be based on Xxxxxxx Xxxxx’x AMC
base salary (provided that, to the extent AMC and Cablevision continue to use the same
insurance carriers, coverage under AMC’s plans will be aggregated with coverage under the
Cablevision plan with respect to any applicable maximum coverage provisions.) Xxxxxxx Xxxxx
acknowledges that he will not participate in any other employee health and welfare or retirement
plan of AMC.
Xxxxxxx Xxxxx acknowledges that any continuing service requirements with respect to any AMC
stock options or AMC restricted stock issued in respect of the spin-off of AMC shall be based
solely on service to Cablevision and its affiliates (other than AMC and its
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subsidiaries). AMC has no liability to Xxxxxxx Xxxxx with respect to any cash payable
pursuant to the outstanding long-term cash and equity awards that were granted to him under the
plans of Cablevision prior to the Effective Date, and Xxxxxxx Xxxxx agrees that he will not assert
any such liability against AMC.
4. Expenses. Xxxxxxx Xxxxx shall be authorized, in carrying out his responsibilities and
duties hereunder, to make expenditures from time to time on behalf of AMC for the performance,
furtherance and maintenance of AMC’s business, including travel relating to the business of AMC,
entertainment and similar items, and AMC shall promptly reimburse Xxxxxxx Xxxxx for such
expenditures upon the submission of statements therefore by Xxxxxxx Xxxxx; provided,
however, that when such expenses may be reasonably anticipated, AMC shall advance the
amount thereof to Xxxxxxx Xxxxx.
5. Termination Rights of AMC. AMC shall have the right to terminate Xxxxxxx Xxxxx’x
employment at its option in the event of Xxxxxxx Xxxxx’x repeated willful and material failure to
perform the services required of him hereunder, or Xxxxxxx Xxxxx’x willful wrongdoing in the
performance of his duties hereunder. Termination under the preceding sentence shall cause all
obligations of AMC hereunder to cease.
AMC may, if it so elects, declare Xxxxxxx Xxxxx’x employment hereunder terminated by reason of
his incapacity extending beyond six consecutive months’ disability at any time prior to Xxxxxxx
Xxxxx’x return to employment and the discharge of his duties hereunder. If such termination occurs,
Xxxxxxx Xxxxx will be entitled to continue to receive all of his compensation and benefits pursuant
to section 3 until the end of the then remaining term of this Agreement. In the event of Xxxxxxx
Xxxxx’x death, all obligations of AMC hereunder shall cease, except that AMC will make a lump sum
death benefit payment to Xxxxxxx Xxxxx’x estate equal to the greater of one year’s salary or 50% of
the compensation that would have been payable to Xxxxxxx Xxxxx during the then remaining term of
this Agreement.
6. Section 409A. To the extent Xxxxxxx Xxxxx would otherwise be entitled to any payment that under this
Agreement, or any plan or arrangement of AMC or its affiliates, constitutes “deferred compensation”
subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and that
if paid during the six months beginning on the date of termination of Xxxxxxx Xxxxx’x employment
would be subject to the Section 409A additional tax because Xxxxxxx Xxxxx is a “specified employee”
(within the meaning of Section 409A and as determined by AMC), (i) the payment will not be made to
Xxxxxxx Xxxxx and instead will be made to a trust in compliance with Rev. Proc. 92-64 (the “Rabbi
Trust”), and (ii) the payment, together with any earnings on it, will be paid to Xxxxxxx Xxxxx on
the earlier of the six-month anniversary of his “separation from service” as defined in Treas. Reg.
§ 1.409A-1(h) or his death; provided, however, that no payment will be made to the
Rabbi Trust if it would be contrary to law or cause Xxxxxxx Xxxxx to incur additional tax under
Section 409A. Similarly, to the extent Xxxxxxx Xxxxx would otherwise be entitled to any benefit
(other than a payment) during the six months beginning on termination of his employment that would
be subject to the Section 409A additional tax, the benefit will be delayed and will begin being
provided (together, if applicable, with an adjustment to compensate Xxxxxxx Xxxxx for the delay) on
the earlier of the six-month
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anniversary of his separation from service or his death. Any such payments or benefit subject
to Section 409A shall be treated as separate payments for purposes of Section 409A. Furthermore, to
the extent any other payments of money or other benefits due to Xxxxxxx Xxxxx could cause the
application of an additional tax under Section 409A, such payments or other benefits shall be
deferred if deferral will make such payment or other benefits compliant under Section 409A.
In addition, any payment or benefit that is due or commences upon a termination of Xxxxxxx
Xxxxx’x employment that represents a “deferral of compensation” within the meaning of Section 409A
shall be paid, commenced to be paid or provided to Xxxxxxx Xxxxx only upon a “separation from
service” as defined in Treas. Reg. § 1.409A-1(h).
To the extent any expense reimbursement is determined to be subject to Section 409A, the
amount of any such expenses eligible for reimbursement in one calendar year shall not affect the
expenses eligible for reimbursement in any other taxable year (except under any lifetime limit
applicable to expenses for medical care), in no event shall any expenses be reimbursed after the
last day of the calendar year following the calendar year in which Xxxxxxx Xxxxx incurred such
expenses, and in no event shall any right to reimbursement be subject to liquidation or exchange
for another benefit.
If the Rabbi Trust has not been established at the time of the termination of Xxxxxxx Xxxxx’x
employment, Xxxxxxx Xxxxx may select an institution to serve as the trustee of the Rabbi Trust (so
long as the institution is reasonably acceptable to AMC). Xxxxxxx Xxxxx may negotiate such terms
with the trustee as are customary for such arrangements and reasonably acceptable to AMC. AMC will
bear all costs related to the establishment and operation of the Rabbi Trust, including Xxxxxxx
Xxxxx’x attorney’s fees.
If any payment otherwise due to Xxxxxxx Xxxxx hereunder would result in the imposition of the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, AMC will
instead pay Xxxxxxx Xxxxx either (i) such amount or (ii) the maximum amount that could be paid to
Xxxxxxx Xxxxx without the imposition of the excise tax, depending on whichever amount results in
Xxxxxxx Xxxxx receiving the greater amount of after-tax proceeds. In the event that the payments
and benefits payable to Xxxxxxx Xxxxx would be reduced as provided in the previous sentence, then
such reduction will be determined in a manner which has the least economic cost to Xxxxxxx Xxxxx
and, to the extent the economic cost is equivalent, such payments or benefits will be reduced in
the inverse order of when the payments or benefits would have been made to Xxxxxxx Xxxxx (i.e.,
later payments will be reduced first) until the reduction specified is achieved.
AMC will not take any action that would expose any payment or benefit to Xxxxxxx Xxxxx to the
additional tax of Section 409A, unless (i) AMC is obligated to take the action under an agreement,
plan or arrangement to which Xxxxxxx Xxxxx is a party, (ii) Xxxxxxx Xxxxx requests the action,
(iii) AMC advises Xxxxxxx Xxxxx in writing that the action may result in the imposition of the
additional tax and (iv) Xxxxxxx Xxxxx subsequently requests the action in a writing that
acknowledges he will be responsible for any effect of the action under Section 409A. AMC will hold
Xxxxxxx Xxxxx harmless for any action it may take in violation of this paragraph, including any
attorney’s fees Xxxxxxx Xxxxx may incur in enforcing his rights.
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It is AMC’s intention that the benefits and rights to which Xxxxxxx Xxxxx could become
entitled in connection with termination of employment comply with Section 409A. If Xxxxxxx Xxxxx or
AMC believes, at any time, that any of such benefit or right does not comply, it will promptly
advise the other and will negotiate reasonably and in good faith to amend the terms of such
arrangement such that it complies (with the most limited possible economic effect on Xxxxxxx Xxxxx
and on AMC).
7. Assignment. The rights and obligations of AMC under this Agreement shall inure to the
benefit of, and shall be binding upon, its successors and assigns. AMC may not assign this
Agreement without the consent of Xxxxxxx Xxxxx.
8. Notices. All notices and requests hereunder shall be in writing and shall be
delivered in person or by certified or registered mail, postage prepaid,
if to Xxxxxxx Xxxxx, addressed to:
Xx. Xxxxxxx X. Xxxxx
c/o Cablevision Systems Corporation,
0000 Xxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000
c/o Cablevision Systems Corporation,
0000 Xxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000
with copy to:
Xxxxx Family Xxxxxx
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
if to AMC, addressed to:
Such notices and requests shall be deemed delivered on the day on which personally delivered, or if
delivered by mail, on the third business day after its delivery at the post office, as evidenced by
a post office receipt furnished to the sender. Either party may change his or its address for
receipt of notices and requests hereunder by notice duly given to the other party in accordance
with the provision of this section.
9. Governing Law. The laws of the State of New York shall govern all questions relative
to the interpretation and construction of this Agreement, and to the performance hereof.
10. Waiver. No waiver by either party of any default hereunder by the other shall in any
way prejudice the waiving party with respect to any subsequent default hereunder (whether or not
similar) by the other party.
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11. Headings of No Effect. The headings and captions hereof have been inserted solely for
convenience of reference, and shall in no way define, limit or describe any of the provisions of
this Agreement.
12. Entire Agreement. This instrument contains the entire agreement of the parties. It
may not be changed orally, but only by an agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is sought.
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the date first above
written.
| AMC Networks Inc. | ||||||
| By: |
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| Title: | ||||||
| Xxxxxxx X. Xxxxx | ||||||
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