Cablevision Systems entered into employment agreements with president and CEO James Dolan, chief operating officer Tom Rutledge and vice chairman Hank Ratner through Dec. 31, 2014, while Madison Square Garden -- ahead of its expected spin-off from Cablevision in early 2010 -- established separate agreements with Dolan and Ratner.
Cablevision disclosed the employment agreements in an 8-K filing Thursday (Dec. 24) with the Securities and Exchange Commission.
Dolan, as president and CEO of Cablevision, will receive an annual base salary of $1.5 million plus an annual bonus of up to $6 million. In addition, in calendar year 2010, Dolan will be entitled to receive one or more long-term cash and/or equity awards with an aggregate target value of $7 million, according to the SEC filing. Cablevision expects long-term cash or equity awards of similar aggregate target values will be made to Dolan in subsequent years.
After the MSG spin-off, Dolan will be executive chairman of MSG and "will devote a portion of his business time to that role." The new MSG agreement provides for Dolan's employment through Dec. 31, 2014, at a minimum annual base salary of $500,000 plus an annual target bonus of up to $2 million. From MSG, Dolan will be entitled to receive one or more long-term cash and/or equity awards with an aggregate target value of $1.75 million in 2010, with similar awards in following years.
Rutledge's extended contract provides a minimum annual base salary of $1.638 million with an annual bonus up to $6.55 million, and he is entitled to long-term cash and/or equity awards with an aggregate target value of $6.8 million in calendar year 2010.
In addition, Rutledge will receive a one-time bonus $7.75 million; if his employment with Cablevision is terminated prior to Dec. 31, 2012, he will be required to repay a pro-rated amount of the cash award.
Cablevision also gave Rutledge a one-time grant of Class A Common Stock with a target value of $10.75 million to be made no later than March 31, 2010, with certain restrictions.
Dolan's 2008 salary was $1.8 million and his bonus $6.6 million, according to Cablevision's latest annual proxy. Rutledge's salary was $1.6 million in 2008 and he received a $5.3 million bonus.
Ratner, who will be president and CEO of MSG following the spin-off, will "devote a majority of his time to his role at MSG but he will also retain his position as Cablevision's vice chairman and will devote a portion of his time to that role," so he received two separate employment agreements that will become effective upon the consummation of the spin-off of MSG. Cablevision also agreed to extend the expiration date of his current employment agreement with Cablevision until March 31, 2010, or the date of the spin-off, whichever is sooner.
As vice chairman of Cablevision, Ratner will have a minimum annual base salary of $500,000 and an annual target bonus up to $2 million. In calendar year 2010, Ratner is entitled to long-term cash and/or equity awards with an aggregate target value of $1.4 million. In addition, Ratner will receive a one-time special award of shares of restricted Cablevision Class A Common Stock with a target value of $1.75 million to be made no later than March 31, 2010, subject to restrictions; Cablevision also will establish and credit $15 million to a retirement account for Ratner's benefit.
As president and CEO of MSG, Ratner will receive an annual base salary of $1.2 million and up to $4.8 million bonus, and long-term cash and/or equity awards with an aggregate target value of $5.4 million in 2010 (with similar awards expected in subsequent years). Ratner also will receive a one-time stock grant worth $4.75 million from MSG no later than March 31, 2010, subject to certain conditions.