Exhibit 10.4

EMPLOYEE MATTERS AGREEMENT

BY AND BETWEEN

THE MADISON SQUARE GARDEN COMPANY

(TO BE RENAMED MADISON SQUARE GARDEN SPORTS CORP.)

AND

MSG ENTERTAINMENT SPINCO, INC.

(TO BE RENAMED MADISON SQUARE GARDEN ENTERTAINMENT CORP.)

Dated as of March 31, 2020

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TABLE OF CONTENTS

 

          Page   ARTICLE I

 

DEFINITIONS

 

Section 1.1

   Definitions      1  

Section 1.2

   General Interpretive Principles      8   ARTICLE II

 

GENERAL PRINCIPLES

 

Section 2.1

   Assumption and Retention of Liabilities; Related Assets      9  

Section 2.2

   MSGS Participation in Spinco Plans      10  

Section 2.3

   Service Recognition      10   ARTICLE III

 

U.S. QUALIFIED DEFINED BENEFIT PLAN

 

Section 3.1

   Cash Balance Pension Plan      12   ARTICLE IV

 

U.S. QUALIFIED DEFINED CONTRIBUTION PLANS

 

Section 4.1

   401(k) Plan      12  

Section 4.2

   Investment and Benefits Committee      12   ARTICLE V

 

NONQUALIFIED PLANS

 

Section 5.1

   Excess Cash Balance Pension Plan      12  

Section 5.2

   Excess Retirement Plan      13  

Section 5.3

   Excess Savings Plan      13  

Section 5.4

   Transferred Employees      14  

Section 5.5

   No Separation from Service      14   ARTICLE VI

 

U.S. HEALTH AND WELFARE PLANS

 

Section 6.1

   Health and Welfare Plans Maintained by Spinco Prior to the Distribution Date
     14  

Section 6.2

   Flexible Spending Accounts Plan      15  

Section 6.3

   Legal Plan      15  

Section 6.4

   COBRA and HIPAA      15  

Section 6.5

   Liabilities      16  

Section 6.6

   Time-Off Benefits      17  

Section 6.7

   Severance Pay Plans      18  

 

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ARTICLE VII

 

EQUITY COMPENSATION

 

Section 7.1

   Equity Compensation      18  

Section 7.2

   Taxes and Withholding      18  

Section 7.3

   Cooperation      20  

Section 7.4

   SEC Registration      20  

Section 7.5

   Savings Clause      20   ARTICLE VIII

 

ADDITIONAL COMPENSATION AND BENEFITS MATTERS

 

Section 8.1

   Cash Incentive Awards      20  

Section 8.2

   Individual Arrangements      21  

Section 8.3

   Non-Competition      22  

Section 8.4

   Collective Bargaining      22  

Section 8.5

   Union Dues; Severance and Fringe Benefits      22  

Section 8.6

   Director Programs      22  

Section 8.7

   Sections 162(m)/409A      23   ARTICLE IX

 

INDEMNIFICATION

 

Section 9.1

   Indemnification      23   ARTICLE X

 

GENERAL AND ADMINISTRATIVE

 

Section 10.1

   Sharing of Information      23  

Section 10.2

   Reasonable Efforts/Cooperation      24  

Section 10.3

   Non-Termination of Employment; No Third-Party Beneficiaries      24  

Section 10.4

   Consent of Third Parties      24  

Section 10.5

   Access to Employees      24  

Section 10.6

   Beneficiary Designation/Release of Information/Right to Reimbursement      25
 

Section 10.7

   Not a Change in Control      25   ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1

   Effect If Distribution Does Not Occur      25  

Section 11.2

   Complete Agreement; Construction      25  

Section 11.3

   Counterparts      25  

Section 11.4

   Survival of Agreements      25  

Section 11.5

   Notices      25  

Section 11.6

   Waivers      26  

Section 11.7

   Amendments      26  

Section 11.8

   Assignment      26  

Section 11.9

   Successors and Assigns      26  

 

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Section 11.10

  

Subsidiaries

     26  

Section 11.11

  

Title and Headings

     26  

Section 11.12

  

Governing Law

     26  

Section 11.13

  

Waiver of Jury Trial

     27  

Section 11.14

  

Specific Performance

     27  

Section 11.15

  

Severability

     27  

 

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Exhibits

 

Exhibit A

 

MSGS Retained Retirement Plans

Exhibit B

 

Spinco Retained Retirement Plans

Exhibit C

 

MSGS Retained Multi-Employer Benefit Plans

Exhibit D

 

Spinco Retained Multi-Employer Benefit Plans

Exhibit E

 

Spinco Health & Welfare Plans

Exhibit F

 

MSGS Union Relationships

Exhibit G

 

Spinco Union Relationships

Exhibit H

 

FY 2020 Annual Cash Incentive Awards

 

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EMPLOYEE MATTERS AGREEMENT

THIS EMPLOYEE MATTERS AGREEMENT (this “Agreement”), dated as of March 31, 2020,
is by and between The Madison Square Garden Company (to be renamed Madison
Square Garden Sports Corp. at the Distribution (as defined herein)), a Delaware
corporation (“MSGS”), and MSG Entertainment Spinco, Inc. (to be renamed Madison
Square Garden Entertainment Corp. at the Distribution), a Delaware corporation
and an indirect wholly-owned subsidiary of MSGS (“Spinco” and, together with
MSGS, each, a “Party” and collectively, the “Parties”).

RECITALS

WHEREAS, the Board of Directors of MSGS determined that it is in the best
interests of MSGS and its stockholders to separate the business of Spinco, as
more fully described in Spinco’s registration statement on Form 10
(collectively, the “Spinco Business”), from MSG’s other businesses, on the terms
and subject to the conditions set forth in the Distribution Agreement (as
defined below);

WHEREAS, in order to effectuate the foregoing, MSGS and Spinco have entered into
a Distribution Agreement, dated as of March 31, 2020 (the “Distribution
Agreement”), pursuant to which and subject to the terms and conditions set forth
therein, the Spinco Business shall be separated from the MSGS Business, and all
of the issued and outstanding shares of Spinco Common Stock beneficially owned
by MSGS shall be distributed (the “Distribution”) to the holders of the issued
and outstanding MSGS Common Stock; and

WHEREAS, MSGS and Spinco have agreed to enter into this Agreement for the
purpose of allocating Assets, Liabilities and responsibilities with respect to
certain employee compensation and benefit plans, programs and arrangements, and
certain employment matters between and among them.

NOW, THEREFORE, in consideration of the premises and of the respective
agreements and covenants contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound, agree as
follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:

“401(k) Plan” shall have the meaning ascribed thereto in Section 4.1 of this
Agreement.

“Action” means any claim, demand, complaint, charge, action, cause of action,
suit, countersuit, arbitration, litigation, inquiry, proceeding or investigation
by or before any Governmental Authority or any arbitration or mediation
tribunal.

 

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“Actual Benefit Cost” shall have the meaning set forth in Section 6.5(b).

“Agreement” shall have the meaning ascribed thereto in the preamble to this
Agreement, including all the exhibits hereto, and all amendments made hereto
from time to time.

“Asset” means any right, property or asset, whether real, personal or mixed,
tangible or intangible, of any kind, nature and description, whether accrued,
contingent or otherwise, and wherever situated and whether or not carried or
reflected, or required to be carried or reflected, on the books of any Person.

“Cash Balance Pension Plan” means the MSG Sports & Entertainment, LLC Cash
Balance Pension Plan or any successor thereto.

“COBRA” means the continuation coverage requirements for “group health plans”
under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and as codified in Section 4980B of the Code and Sections 601 through
608 of ERISA.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Control” means, as to any Person, the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or other
interests, by contract or otherwise.

“Distribution” shall have the meaning ascribed thereto in the recitals to this
Agreement, as the same is further described in the Distribution Agreement.

“Distribution Agreement” shall have the meaning ascribed thereto in the recitals
to this Agreement.

“Distribution Date” shall have the meaning ascribed thereto in the Distribution
Agreement.

“DOL” means the U.S. Department of Labor.

“Effective Date” shall have the meaning ascribed thereto in Section 6.1(a) of
this Agreement.

“Equity Compensation” means, collectively, the MSGS Options, MSGS RSUs, Spinco
Options, and Spinco RSUs.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Estimated Benefit Cost” shall have the meaning set forth in Section 6.5(b).

 

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“Former MSGS Employee” means:

 

  i.

with respect to an individual whose MSGS Group employment terminated prior to
the Distribution Date, any such individual (A) whose last position was in the
Corporate Division and who was expected to be employed by the MSGS Group
following the Distribution Date, or (B) whose last position was in the Sports
division (other than the Sports Properties Group); and

 

  ii.

with respect to an individual whose MSGS Group employment terminated on or after
the Distribution Date, any former employee of any member of the MSGS Group.

Any individual who is an employee of any member of the Spinco Group on the
Distribution Date or a Former Spinco Employee shall not be a Former MSGS
Employee.

“Former Spinco Employee” means:

 

  i.

with respect to an individual whose MSGS Group employment terminated prior to
the Distribution Date, any such individual (A) whose last position was in the
Corporate Division and who was not expected to be employed by the MSGS Group
following the Distribution Date, (B) whose last position was in the Sports
Properties Group or (C) whose last position was not in the Sports division
(except as provided in clauses (A) and (B) of this sentence); and

 

  ii.

with respect to an individual whose Spinco Group employment terminated on or
after the Distribution Date, any former employee of any member of the Spinco
Group.

Any individual who is an employee of any member of the MSGS Group on the
Distribution Date or a Former MSGS Employee shall not be a Former Spinco
Employee.

“Governmental Authority” means any federal, state, local, foreign or
international court, government, department, commission, board, bureau, agency,
official, the NYSE, NASDAQ or other regulatory, administrative or governmental
authority.

“Group” means the MSGS Group and/or the Spinco Group, as the context requires.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as amended.

“Information” shall mean all information, whether in written, oral, electronic
or other tangible or intangible form, stored in any medium, including non-public
financial information, studies, reports, records, books, accountants’ work
papers, contracts, instruments, flow charts, data, communications by or to
attorneys, memos and other materials prepared by attorneys and accountants or
under their direction (including attorney work product) and other financial,
legal, employee or business information or data.

“IRS” means the U.S. Internal Revenue Service.

“Law” means all laws, statutes and ordinances and all regulations, rules and
other pronouncements of Governmental Authorities having the effect of law of the
United States, any foreign country, or any domestic or foreign state, province,
commonwealth, city, country, municipality, territory, protectorate, possession
or similar instrumentality, or any Governmental Authority thereof.

 

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“Liabilities” means all debts, liabilities, obligations, responsibilities,
Losses, damages (whether compensatory, punitive, or treble), fines, penalties
and sanctions, absolute or contingent, matured or unmatured, liquidated or
unliquidated, foreseen or unforeseen, joint, several or individual, asserted or
unasserted, accrued or unaccrued, known or unknown, whenever arising, including
without limitation those arising under or in connection with any Law, Action,
threatened Action, order or consent decree of any Governmental Authority or any
award of any arbitration tribunal, and those arising under any contract,
guarantee, commitment or undertaking, whether sought to be imposed by a
Governmental Authority, private party, or a Party, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
or otherwise, and including any costs, expenses, interest, attorneys’ fees,
disbursements and expense of counsel, expert and consulting fees, fees of
third-party administrators and costs related thereto or to the investigation or
defense thereof.

“Loss” means any claim, demand, complaint, damages (whether compensatory,
punitive, consequential, treble or other), fines, penalties, loss, liability,
payment, cost or expense arising out of, relating to or in connection with any
Action.

“MSGS” shall have the meaning ascribed thereto in the preamble to this
Agreement.

“MSGS Business” means all businesses and operations conducted by the MSGS Group
from time to time, whether prior to, at or after the Distribution Date, other
than the Spinco Business.

“MSGS Common Stock” means the issued and outstanding Class A Common Stock, par
value $0.01 per share, of MSGS and Class B Common Stock, par value $0.01 per
share, of MSG.

“MSGS Compensation Committee” means the Compensation Committee of the Board of
Directors of MSG.

“MSGS Director” means any individual who is a current or former non-employee
director of MSGS as of the Distribution Date.

“MSGS Employee” means any individual who, immediately following the Distribution
Date, will be employed by MSGS or any member of the MSGS Group in a capacity
considered by MSGS to be common law employment, including active employees and
employees on vacation and approved leaves of absence (including maternity,
paternity, family, sick, short-term or long-term disability leave, qualified
military service under the Uniformed Services Employment and Reemployment Rights
Act of 1994, and leave under the Family Medical Leave Act and other approved
leaves).

“MSGS Excess Cash Balance Plan” shall have the meaning ascribed thereto in
Section 5.1(a) of this Agreement.

“MSGS Excess Savings Plan” shall have the meaning ascribed thereto in
Section 5.3(a).

 

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“MSGS Excess Retirement Plan” shall have the meaning ascribed thereto in
Section 5.2(a) of this Agreement.

“MSGS Flexible Spending Accounts Plan” shall have the meaning ascribed thereto
in Section 6.2 of this Agreement.

“MSGS Group” means, as of the Distribution Date, MSGS and each of its former and
current Subsidiaries (or any predecessor organization thereof), and any
corporation or entity that may become part of such Group from time to time
thereafter. The MSGS Group shall not include any member of the Spinco Group.

“MSGS Health & Welfare Plans” shall have the meaning ascribed thereto in
Section 6.1(a) of this Agreement.

“MSGS Liabilities” means all Liabilities assumed or retained by any member of
the MSGS Group pursuant to this Agreement.

“MSGS Option” means an option to buy MSGS Class A Common Stock granted pursuant
to an MSGS Share Plan (including the options adjusted for the Distribution) and
outstanding as of the Distribution Date (or shortly thereafter to the extent
necessary to determine any adjustments in connection with the Distribution).

“MSGS Participant” means any individual who, immediately following the
Distribution Date, is an MSGS Employee, a Former MSGS Employee or a beneficiary,
dependent or alternate payee of any of the foregoing.

“MSGS Plan” means any Plan sponsored, maintained or contributed to by MSGS or
any of its Subsidiaries, including the MSGS Retained Retirement Plans, MSGS
Share Plans, MSGS Flexible Spending Accounts Plan, MSGS Health & Welfare Plans
and MSGS Retained Multi-Employer Benefit Plans.

“MSGS Retained Multi-Employer Benefit Plans” means the multi-employer plans that
are listed on Exhibit C.

“MSGS Retained Retirement Plans” means the retirement plans that are listed on
Exhibit A.

“MSGS RSU” means a restricted stock unit (including, for the avoidance of doubt,
any restricted stock unit that is subject to performance vesting conditions)
representing an unfunded and unsecured promise to deliver a share of MSGS
Class A Common Stock, or cash or other property equal in value to the share of
MSGS Class A Common Stock, that is granted pursuant to an MSGS Share Plan and
outstanding as of the Distribution Date (or shortly thereafter to the extent
necessary to determine any adjustments in connection with the Distribution).

“MSGS Share Plans” means, collectively, any stock option or stock incentive
compensation plan or arrangement, including equity award agreements, maintained
before the Distribution Date for employees, officers or non-employee directors
of MSGS or its Subsidiaries or affiliates, as amended.

 

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“NASDAQ” means The NASDAQ Stock Market LLC.

“NYSE” means the New York Stock Exchange.

“Participating Company” means MSGS and any Person (other than a natural person)
participating in an MSGS Plan.

“Party” and “Parties” shall have the meanings ascribed thereto in the preamble
to this Agreement.

“Person” means any natural person, corporation, business trust, limited
liability company, joint venture, association, company, partnership or
governmental, or any agency or political subdivision thereof.

“Plan” means, with respect to an entity, each plan, program, arrangement,
agreement or commitment that is an employment, consulting, non-competition or
deferred compensation agreement, or an executive compensation, incentive bonus
or other bonus, employee pension, profit-sharing, savings, retirement,
supplemental retirement, stock option, stock purchase, stock appreciation
rights, restricted stock, other equity-based compensation, severance pay, salary
continuation, life, health, hospitalization, sick leave, vacation pay,
disability or accident insurance plan, corporate-owned or key-man life insurance
or other employee benefit plan, program, arrangement, agreement or commitment,
including any “employee benefit plan” (as defined in Section 3(3) of ERISA),
entered into, sponsored or maintained by such entity (or to which such entity
contributes or is required to contribute).

“Service Crediting Date” shall have the meaning ascribed thereto in
Section 2.3(b)(i) of this Agreement.

“Shared Executives” means those individuals who, as of the Distribution Date,
are employed in a senior executive capacity by both MSGS and Spinco.

“Spinco” shall have the meaning ascribed thereto in the preamble to this
Agreement.

“Spinco Business” means all businesses and operations conducted by the Spinco
Group from time to time, whether prior to, at or after the Distribution Date,
including (A) the businesses and operations of the Sports Properties Group and
(B) the other businesses and operations conducted by the Spinco Group as more
fully described in the Spinco Information Statement and excluding the MSGS
Business.

“Spinco Common Stock” means the outstanding Class A Common Stock, par value
$0.01 per share, of Spinco and Class B Common Stock, par value $0.01 per share,
of Spinco.

“Spinco Director” means any individual who is a current non-employee director of
Spinco as of the Distribution Date.

 

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“Spinco Employee” means any individual who, immediately following the
Distribution Date, will be employed by Spinco or any member of the Spinco Group
in a capacity considered by Spinco to be common law employment, including active
employees and employees on vacation and approved leaves of absence (including
maternity, paternity, family, sick, short-term or long-term disability leave,
qualified military service under the Uniformed Services Employment and
Reemployment Rights Act of 1994, and leave under the Family Medical Leave Act
and other approved leaves).

“Spinco Excess Cash Balance Plan” shall have the meaning ascribed thereto in
Section 5.1(a).

“Spinco Excess Savings Plan” shall have the meaning ascribed thereto in
Section 5.3(a).

“Spinco Excess Retirement Plan” shall have the meaning ascribed thereto in
Section 5.2(a).

“Spinco Flexible Spending Accounts Plan” shall have the meaning ascribed thereto
in Section 6.2 of this Agreement.

“Spinco Group” means, as of the Distribution Date, Spinco and each of its former
and current Subsidiaries (or any predecessor organization thereof), and any
corporation or entity that may become part of such Group from time to time
thereafter. The Spinco Group shall not include any member of the MSGS Group.

“Spinco Health & Welfare Plans” shall have the meaning ascribed thereto in
Section 6.1(a) of this Agreement.

“Spinco Information Statement” means the definitive information statement
distributed to holders of MSGS Common Stock in connection with the Distribution
and filed with the Securities and Exchange Commission (the “SEC”) as Exhibit
99.1 to the registration statement on Form 10 filed with the Commission to
effect the registration of the Spinco Class A Common Shares pursuant to the
Securities Exchange Act of 1934, as amended, or as an exhibit to a Form 8-K of
Spinco.

“Spinco Liabilities” means all Liabilities assumed or retained by any member of
the Spinco Group pursuant to this Agreement.

“Spinco Option” means an option to buy Spinco Class A Common Stock granted
pursuant to a Spinco Share Plan and granted in connection with the Distribution
(or shortly thereafter to the extent necessary to determine any adjustments in
connection with the Distribution).

“Spinco Participant” means any individual who, immediately following the
Distribution Date, is a Spinco Employee, a Former Spinco Employee or a
beneficiary, dependent or alternate payee of any of the foregoing.

“Spinco Plan” means any Plan sponsored, maintained or contributed to by any
member of the Spinco Group, including the Spinco Retained Retirement Plans,
Spinco Share Plans, Spinco Flexible Spending Accounts Plan, the Spinco Retiree
Medical Program, Spinco Health & Welfare Plans and Spinco Retained
Multi-Employer Benefit Plans.

 

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“Spinco Retained Multi-Employer Benefit Plans” means the multi-employer plans
that are listed on Exhibit D.

“Spinco Retained Retirement Plans” means the retirement plans that are listed on
Exhibit B.

“Spinco RSU” means a restricted stock unit (including, for the avoidance of
doubt, any restricted stock unit that is subject to performance vesting
conditions) representing an unfunded and unsecured promise to deliver a share of
Spinco Class A Common Stock, or cash or other property equal in value to the
share of Spinco Class A Common Stock, that is granted pursuant to a Spinco Share
Plan and granted in connection with the Distribution (or shortly thereafter to
the extent necessary to determine any adjustments in connection with the
Distribution).

“Spinco Share Plans” means the Spinco 2020 Employee Stock Plan, Spinco 2020
Stock Plan For Non-Employee Directors and any stock plan or stock incentive
arrangement, including equity award agreements, entered into by Spinco in
connection with the Distribution.

“Subsidiary” has the same meaning as provided in the Distribution Agreement.

“Transition Period” means, with respect to each MSGS Plan in which any Spinco
Group member is a Participating Company, the period of time beginning on the
Distribution Date and ending on the date Spinco establishes a corresponding Plan
and allows participation in such Plan, which shall be no later than the
Effective Date. The Transition Period may be extended beyond the Effective Date
if both Parties agree to the extension, and such agreement shall not be
unreasonably withheld.

“Transition Period End Date” means the last day of each applicable Transition
Period.

“U.S.” means the United States of America.

Section 1.2 General Interpretive Principles. Words in the singular shall include
the plural and vice versa, and words of one gender shall include the other
gender, in each case, as the context requires. The words “hereof,” “herein,”
“hereunder,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement and not to any particular
provision of this Agreement, and references to Article, Section, paragraph and
Exhibit are references to the Articles, Sections, paragraphs and Exhibits to
this Agreement unless otherwise specified. The word “including” and words of
similar import when used in this Agreement shall mean “including, without
limitation,” unless otherwise specified. Any reference to any federal, state,
local or non-U.S. statute or Law shall be deemed to also refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires.

 

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ARTICLE II

GENERAL PRINCIPLES

Section 2.1 Assumption and Retention of Liabilities; Related Assets.

(a) As of the Distribution Date, except as otherwise expressly provided for in
this Agreement, MSGS shall, or shall cause one or more members of the MSGS Group
to, assume or retain and MSGS hereby agrees to pay, perform, fulfill and
discharge, in due course in full (i) all Liabilities under all MSGS Plans
(provided that, as between MSGS and Spinco, Spinco shall be responsible for
certain of those Liabilities pursuant to Section 2.1(b) of this Agreement),
(ii) all Liabilities with respect to the employment, retirement, service,
termination of employment or termination of service of all MSGS Employees,
Former MSGS Employees, MSGS Directors, their dependents and beneficiaries and
other service providers (including any individual who is, or was, an independent
contractor, temporary employee, temporary service worker, consultant,
freelancer, agency employee, leased employee, on-call worker, incidental worker,
or non-payroll worker of any member of the MSGS Group or in any other
employment, non-employment, or retainer arrangement or relationship with any
member of the MSGS Group), in each case to the extent arising in connection with
or as a result of employment with or the performance of services for any member
of the MSGS Group, and (iii) any other Liabilities expressly assumed by or
retained by MSGS or any of its Subsidiaries under this Agreement, including
liabilities retained pursuant to Article V of this Agreement. For purposes of
clarification and the avoidance of doubt, (x) the Liabilities assumed or
retained by the MSGS Group as provided for in this Section 2.1(a) are intended
to be MSGS Liabilities as such term is defined in the Distribution Agreement,
and (y) the Parties intend that such Liabilities assumed or retained by the MSGS
Group include the retirement benefits and health and welfare plan benefits under
the MSGS Plans for all MSGS Employees, Former MSGS Employees, their dependents,
beneficiaries, alternate payees and surviving spouses.

(b) As of the Distribution Date, except as otherwise expressly provided for in
this Agreement, Spinco shall, or shall cause one or more members of the Spinco
Group to, assume or retain and Spinco hereby agrees to pay, perform, fulfill and
discharge, in due course in full (i) all Liabilities under all Spinco Plans,
(ii) all Liabilities with respect to the employment, service, retirement,
termination of employment or termination of service of all Spinco Employees,
Former Spinco Employees, their dependents and beneficiaries and other service
providers (including any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or non-payroll
worker of any member of the Spinco Group or in any other employment,
non-employment, or retainer arrangement or relationship with any member of the
Spinco Group), and (iii) any other Liabilities expressly assumed or retained by
Spinco or any of its Subsidiaries under this Agreement. For purposes of
clarification and the avoidance of doubt, the Liabilities assumed or retained by
the Spinco Group as provided for in this Section 2.1(b) are intended to be
Spinco Liabilities as such term is defined in the Distribution Agreement.

(c) From time to time after the Distribution, Spinco shall promptly reimburse
MSGS, upon MSG’s presentation of such substantiating documentation as Spinco
shall reasonably request, for the cost of any Liabilities satisfied by MSGS or
its Subsidiaries that are, or that have been made pursuant to this Agreement,
the responsibility of Spinco or any of its Subsidiaries.

(d) From time to time after the Distribution, MSGS shall promptly reimburse
Spinco, upon Spinco’s presentation of such substantiating documentation as MSGS
shall reasonably request, for the cost of any Liabilities satisfied by Spinco or
its Subsidiaries that are, or that have been made pursuant to this Agreement,
the responsibility of MSGS or any of its Subsidiaries.

 

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Section 2.2 MSGS Participation in Spinco Plans.

(a) During the Transition Period. Except for the Spinco Plans described in
Articles III, V, VII and VIII herein, until the Transition Period End Date, MSGS
and each member of the MSGS Group that presently participates in a particular
Spinco Plan may continue to be a Participating Company in such Spinco Plan, and
MSGS and Spinco shall take all necessary action to effectuate each such
continuation. MSGS and each member of the MSGS Group shall pay Spinco for any
MSGS Employee or Former MSGS Employee’s participation in the Spinco Plans.

(b) After the Transition Period. Except as otherwise expressly provided for in
this Agreement, effective as of the Transition Period End Date, MSGS and each
member of the MSGS Group shall cease to be a Participating Company in the
corresponding Spinco Plan, and MSGS and Spinco shall take all necessary action
to effectuate each such cessation.

Section 2.3 Service Recognition.

(a) Pre-Distribution Service Credit. MSGS shall give each MSGS Participant full
credit for purposes of eligibility, vesting, determination of level of benefits,
and, to the extent applicable, benefit accruals under any MSGS Plan for such
MSGS Participant’s service with any member of the Spinco Group prior to the
Distribution Date to the same extent such service was recognized by the
corresponding Spinco Plans immediately prior to the Distribution Date; provided,
however, that such service shall not be recognized to the extent that such
recognition would result in the duplication of benefits.

(b) Post-Distribution Service Crediting for the MSGS Retained Retirement Plans
and Spinco Retained Retirement Plans. Each of MSGS and Spinco (acting directly
or through their respective Subsidiaries) shall cause each of the MSGS Retained
Retirement Plans and the Spinco Retained Retirement Plans, respectively, to
provide the following service crediting rules effective as of the Distribution
Date:

(i) If an MSGS Employee who participates in, or is eligible to participate but
as of June 30, 2021 (the “Service Crediting Date”) is not participating in, any
of the MSGS Retained Retirement Plans becomes employed by a member of the Spinco
Group on or after the Distribution Date, but on or before the Service Crediting
Date, and such MSGS Employee has been continuously employed by the MSGS Group
from the Distribution Date through the date such MSGS Employee commences active
employment with a member of the Spinco Group, then such MSGS Employee’s service
with the MSGS Group following the Distribution Date shall be recognized for
purposes of eligibility, vesting and level of benefits under the corresponding
Spinco Retained Retirement Plans, in each case to the same extent as such MSGS
Employee’s service with the MSGS Group was recognized under the corresponding
MSGS Retained Retirement Plans, if any.

 

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(ii) If a Spinco Employee becomes employed by a member of the MSGS Group prior
to the Service Crediting Date and such Spinco Employee is continuously employed
by the Spinco Group from the Distribution Date through the date such Spinco
Employee commences active employment with a member of the MSGS Group, then such
Spinco Employee’s service with the Spinco Group following the Distribution Date
shall be recognized for purposes of eligibility, vesting and level of benefits
under the corresponding MSGS Retained Retirement Plans, in each case to the same
extent as such Spinco Employee’s service with the Spinco Group was recognized
under the corresponding Spinco Retained Retirement Plans, if any.

(iii) Notwithstanding anything in this Agreement to the contrary, for the period
commencing on the Distribution Date until the Service Crediting Date, the MSGS
Retained Retirement Plans and the Spinco Retained Retirement Plans (other than
the Cash Balance Pension Plan) shall provide that no break in service occurs
with respect to any MSGS Employee or Spinco Employee who is hired or rehired by
any member of the Spinco Group or the MSGS Group after the termination of such
MSGS Employee’s or Spinco Employee’s employment with either the MSGS Group or
the Spinco Group within such period.

(iv) Notwithstanding anything in this Agreement to the contrary, the employment
service with the MSGS Group or the Spinco Group shall not be double counted or
result in duplicative benefits or service crediting under any MSGS Retained
Retirement Plan or Spinco Retained Retirement Plan.

(c) Post-Distribution Service Crediting for the MSGS and Spinco Health & Welfare
Plans.

(i) If an MSGS Employee who participates in any of the MSGS Health & Welfare
Plans becomes employed by a member of the Spinco Group on or after the
Distribution Date, but on or before the Service Crediting Date, and such MSGS
Employee has been continuously employed by the MSGS Group from the Distribution
Date through the date such MSGS Employee commences active employment with a
member of the Spinco Group, then such MSGS Employee’s service with the MSGS
Group following the Distribution Date shall be recognized for purposes of
eligibility under the corresponding Spinco Health & Welfare Plans, in each case
to the same extent as such MSGS Employee’s service with the MSGS Group was
recognized under the corresponding MSGS Health & Welfare Plan.

(ii) If a Spinco Employee who participates in any of the Spinco Health & Welfare
Plans becomes employed by a member of the MSGS Group on or after the
Distribution Date, but on or before the Service Crediting Date, and such Spinco
Employee has been continuously employed by the Spinco Group from the
Distribution Date through the date such Spinco Employee commences active
employment with a member of the MSGS Group, then such Spinco Employee’s service
with the Spinco Group following the Distribution Date shall be recognized for
purposes of eligibility under the corresponding MSGS Health & Welfare Plans, in
each case to the same extent as such Spinco Employee’s service with the Spinco
Group was recognized under the corresponding Spinco Health & Welfare Plans.

 

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ARTICLE III

U.S. QUALIFIED DEFINED BENEFIT PLAN

Section 3.1 Cash Balance Pension Plan. As of the Distribution Date, a member of
the Spinco Group shall retain all of the assets in the trust underlying the Cash
Balance Pension Plan, and remain responsible for all Liabilities under the Cash
Balance Pension Plan.

ARTICLE IV

U.S. QUALIFIED DEFINED CONTRIBUTION PLANS

Section 4.1 401(k) Plan. On or prior to the Distribution Date, MSGS and Spinco
shall take all necessary actions to add MSGS as a contributing employer to the
Madison Square Garden 401(k) Savings Plan (the “401(k) Plan”). On and after the
Distribution Date, MSGS Participants who, immediately prior to the Distribution
Date were participants in, or entitled to, future benefits under the 401(k) Plan
shall continue to participate in the 401(k) Plan on the same terms and
conditions as applied prior to the Distribution Date, as may be modified from
time to time. On and after the Distribution Date, all contributions payable to
the 401(k) Plan with respect to MSGS Participants, determined in accordance with
the terms of the 401(k) Plan, ERISA and the Code, shall be paid by MSGS to the
401(k) Plan.

Section 4.2 Investment and Benefits Committee. Effective as of the Distribution
Date, MSGS shall establish an Investments and Benefits Committee, which, among
other things, shall oversee its participation in the 401(k) Plan.

ARTICLE V

NONQUALIFIED PLANS

Section 5.1 Excess Cash Balance Pension Plan.

(a) No later than the Distribution Date, MSGS shall establish and make payments
pursuant to a non-qualified defined benefit pension plan (the “MSGS Excess Cash
Balance Plan”) to provide non-qualified retirement benefits to MSGS Employees
(including Shared Executives) who, immediately prior to the effective date of
the MSGS Excess Cash Balance Plan, were entitled to future benefits under the
MSG Sports & Entertainment, LLC Excess Cash Balance Plan (the “Spinco Excess
Cash Balance Plan”) and shall assume the Liabilities as of the Distribution Date
of the Spinco Excess Cash Balance Plan relating to MSGS Employees, Former MSGS
Employees and Shared Executives.

(b) As of the effective date of the MSGS Excess Cash Balance Plan, MSGS (acting
directly or through its Subsidiaries) shall cause the MSGS Excess Cash Balance
Plan to recognize and maintain all existing beneficiary designations with
respect to MSGS Employees, Former MSGS Employees and Shared Executives under the
Spinco Excess Cash Balance Plan.

(c) The Parties agree that the Liabilities of the Spinco Excess Cash Balance
Plan relating to MSGS Employees, Former MSGS Employees and Shared Executives
shall be transferred to the MSGS Excess Cash Balance Plan effective as of the
Distribution Date.

 

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Section 5.2 Excess Retirement Plan.

(a) No later than the Distribution Date, MSGS shall establish and make payments
pursuant to a non-qualified defined benefit pension plan (the “MSGS Excess
Retirement Plan”) to provide non-qualified retirement benefits to eligible MSGS
Employees and shall assume the Liabilities as of the Distribution Date of the
MSG Sports & Entertainment, LLC Excess Retirement Plan (the “Spinco Excess
Retirement Plan”) relating to MSGS Employees and, subject to the following
sentence, Former MSGS Employees. For the avoidance of doubt, MSGS shall not
assume, and Spinco shall remain responsible for, any Liabilities of the Spinco
Excess Retirement Plan relating to any individual who is no longer employed by
the MSGS Group or the Spinco Group as of the Distribution Date and has already
commenced receipt of his or her benefit under such plan.

(b) As of the effective date of the MSGS Excess Retirement Plan, MSGS (acting
directly or through its Subsidiaries) shall cause the MSGS Excess Retirement
Plan to recognize and maintain all existing beneficiary designations with
respect to MSGS Employees and, as applicable pursuant to Section 5.2(a), Former
MSGS Employees, under the Spinco Excess Retirement Plan.

(c) The Parties agree that, effective as of the Distribution Date, the
Liabilities of the Spinco Excess Retirement Plan relating to MSGS Employees and,
as applicable pursuant to Section 5.2(a), Former MSGS Employees, shall be
transferred to the MSGS Excess Retirement Plan.

Section 5.3 Excess Savings Plan.

(a) Establishment of the MSGS Excess Savings Plan. No later than the
Distribution Date, MSGS shall establish a defined contribution plan for the
benefit of MSGS Employees (including Shared Executives) (the “MSGS Excess
Savings Plan”) who, immediately prior to the effective date of the MSGS Excess
Savings Plan, were participants in, or entitled to future benefits under, the
MSG Sports & Entertainment, LLC Excess Savings Plan (the “Spinco Excess Savings
Plan”).

(b) Transfer of Spinco Excess Savings Plan Accounts. No later than the
Distribution Date, Spinco shall cause the accounts in the Spinco Excess Savings
Plan attributable to MSGS Employees, Former MSGS Employees and Shared Executives
to be transferred to the MSGS Excess Savings Plan and MSGS shall cause the MSGS
Excess Savings Plan to accept such transfer of accounts in accordance with
current practice and to assume and to fully perform, pay and discharge all
Liabilities of the Spinco Excess Savings Plan relating to the accounts of MSGS
Employees, Former MSGS Employees and Shared Executives as of the effective date
of the MSGS Excess Savings Plan.

(c) Continuation of Elections. As of the effective date of the MSGS Excess
Savings Plan, MSGS (acting directly or through its Subsidiaries) shall cause the
MSGS Excess Savings Plan to recognize and maintain all elections, including
deferral elections and beneficiary designations, as applicable, with respect to
MSGS Employees, Former MSGS Employees and Shared Executives under the Spinco
Excess Savings Plan for the remainder of the period or periods for which such
elections or designations are by their original terms applicable, to the extent
such election or designation is available under the MSGS Excess Savings Plan.

 

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Section 5.4 Transferred Employees. Employees who transfer from Spinco to MSGS
between the Distribution Date and June 30, 2021 will not be eligible for an
immediate distribution of their account balance from the Spinco Excess Cash
Balance Plan, Spinco Excess Retirement Plan or the Spinco Excess Savings Plan;
instead, subject to compliance with any applicable requirements of Section 409A
of the Code, any such account balance shall be transferred to the MSGS Excess
Cash Balance Plan, MSGS Excess Retirement Plan or the MSGS Excess Savings Plan
on the date of transfer, and Spinco shall pay MSGS an amount equal to the vested
account balance as of the transfer date within 30 days of such transfer date.
Employees who transfer from MSGS to Spinco between the Distribution Date and
June 30, 2021 will not be eligible for an immediate distribution of their
account balance from the MSGS Excess Cash Balance Plan, MSGS Excess Retirement
Plan or the MSGS Excess Savings Plan; instead, subject to compliance with any
applicable requirements of Section 409A of the Code, any such account balance
shall be transferred to the MSGS Excess Cash Balance Plan, Spinco Excess
Retirement Plan or the Spinco Excess Savings Plan on the date of transfer, and
MSGS shall pay Spinco an amount equal to the vested account balance as of the
transfer date within 30 days of such transfer date.

Section 5.5 No Separation from Service. The transactions provided for under this
Agreement shall not constitute a separation from service or a termination of
employment under the MSGS Excess Cash Balance Plan, Spinco Excess Cash Balance
Plan, MSGS Excess Retirement Plan, Spinco Excess Retirement Plan, MSGS Excess
Savings Plan or the Spinco Excess Savings Plan, each of which shall provide that
no distribution of retirement benefits shall be made to any MSGS Employee or
Spinco Employee on account of these transactions.

ARTICLE VI

U.S. HEALTH AND WELFARE PLANS

Section 6.1 Health and Welfare Plans Maintained by Spinco Prior to the
Distribution Date.

(a) Establishment of the MSGS Health & Welfare Plans. Spinco or one or more of
its Subsidiaries maintain each of the health and welfare plans set forth on
Exhibit E attached hereto (the “Spinco Health & Welfare Plans”) for the benefit
of eligible MSGS Participants and Spinco Participants. Effective as of
January 1, 2021 (the “Effective Date”), MSGS shall, or shall cause one of its
Subsidiaries to, adopt health and welfare plans (other than a retiree medical
program) for the benefit of eligible MSGS Participants (collectively, the “MSGS
Health & Welfare Plans”).

(b) Terms of Participation in MSGS Health & Welfare Plans. MSGS (acting directly
or through its Subsidiaries) shall cause all MSGS Health & Welfare Plans, if
applicable, to (i) waive all limitations as to preexisting conditions,
exclusions, and service conditions with respect to participation and coverage
requirements applicable to MSGS Participants, other than limitations that were
in effect with respect to MSGS Participants immediately prior to the Effective
Date, (ii) waive any waiting period limitation or evidence of insurability
requirement that would otherwise be applicable to an MSGS Participant
immediately prior to the Effective Date to the extent such MSGS Participant had
satisfied any similar limitation under the analogous Spinco Health & Welfare
Plan, and (iii) in the case of self-insured MSGS Health &

 

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Welfare Plans, provide credit for all benefits paid to MSGS Participants under
the Spinco Health & Welfare Plans for purposes of determining when such persons
have reached their lifetime maximums (if any) under the MSGS Health & Welfare
Plan. Notwithstanding the foregoing, in the event that any MSGS Participant,
Former MSGS Employee, or dependent thereof is confined to a facility for
treatment as of the Effective Date, such persons nevertheless shall become
covered under MSGS Health & Welfare Plans as of such date, and shall cease being
covered under Spinco Health & Welfare Plans as of such date.

Section 6.2 Flexible Spending Accounts Plan. As of the Effective Date, MSGS
(acting directly or through its Subsidiaries) shall establish a flexible
spending accounts plan (the “MSGS Flexible Spending Accounts Plan”) with
features that are comparable to those contained in the flexible spending
accounts plan maintained by Spinco for the benefit of MSGS Participants
immediately prior to the Effective Date (the “Spinco Flexible Spending Accounts
Plan”). Following the Effective Date, MSGS Participants that presently
participate in the Spinco Flexible Spending Accounts Plan may submit, for
reimbursement in accordance with the Spinco Flexible Spending Accounts Plan,
claims for health costs incurred during the 2020 plan year and any applicable
grace period thereafter, and Spinco shall be responsible for the payment of such
claims. MSGS shall be entitled to retain the net positive balance, if any, of
the MSGS Participants’ flexible spending accounts from the 2020 plan year. MSGS
shall pay to Spinco the net negative balance, if any, of the MSGS Participants’
flexible spending accounts from the 2020 plan year. As of the Effective Date,
MSGS shall be responsible for administering all reimbursement claims of MSGS
Participants under the MSGS Flexible Spending Accounts Plan with respect to
calendar year 2020 under the MSGS Flexible Spending Accounts Plan.

Section 6.3 Legal Plan. Any case initiated by an MSGS Participant under the
Spinco Group Legal Plan prior to the Effective Date will continue under such
plan until its completion regardless of whether the MSGS Participant enrolls in
the MSGS Group Legal Plan after the Effective Date.

Section 6.4 COBRA and HIPAA. As of the Effective Date, MSGS (acting directly or
through its Subsidiaries) shall assume, or shall have caused the MSGS Health &
Welfare Plans to assume, responsibility for compliance with the health care
continuation coverage requirements of COBRA with respect to MSGS Participants
who, as of the day prior to the Effective Date, were covered under a Spinco
Health & Welfare Plan pursuant to COBRA or were eligible for COBRA under a
Spinco Health & Welfare Plan and incur any COBRA claims after the Effective
Date. Spinco shall be responsible for the claims incurred by MSGS Participants
prior to the Effective Date, regardless of whether payments for such claims are
made or due after the Effective Date. Spinco (acting directly or through its
Subsidiaries) shall be responsible for administering compliance with the
certificate of creditable coverage requirements of HIPAA applicable to the
Spinco Health & Welfare Plans with respect to MSGS Participants for the period
ending on the Effective Date. The Parties hereto agree that neither the
Distribution nor any transfers of employment directly from the MSGS Group to the
Spinco Group or directly from the Spinco Group to the MSGS Group that occur
before the Effective Date shall constitute a COBRA “qualifying event” for
purposes of COBRA.

 

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Section 6.5 Liabilities.

(a) Insured Benefits. With respect to employee welfare and fringe benefits that
are provided through the purchase of insurance, Spinco shall cause the Spinco
Health & Welfare Plans to fully perform, pay and discharge all claims of MSGS
Participants that are incurred prior to the Effective Date (whether reported or
unreported by the Effective Date) for the Spinco Health & Welfare Plans, and
MSGS shall pay Spinco for premiums incurred by Spinco in respect of MSGS
Participants from the Distribution Date through the Effective Date. MSGS shall
cause the MSGS Health & Welfare Plans to fully perform, pay and discharge all
claims of MSGS Participants that are incurred on or after the Effective Date.
With respect to claims of MSGS Participants that are incurred under such Spinco
Health & Welfare Plans prior to the Effective Date (whether reported or
unreported by the Effective Date), but after the Distribution Date, and paid by
the Spinco Health & Welfare Plans, MSGS, as a Participating Company, shall
promptly reimburse Spinco for any administrative or other expenses.

(i) Long-Term Disability. Any MSGS Participant who is on long-term disability
leave and receiving long-term disability benefits under the MSG Sports &
Entertainment, LLC Long Term Disability Plan as of the Effective Date shall
continue to receive benefits under the MSG Sports & Entertainment, LLC Long Term
Disability Plan in accordance with the provisions of such Plan following the
Effective Date.

(b) Self-Insured Benefits. With respect to employee welfare and fringe benefits
that are provided on a self-insured basis, except as otherwise provided herein,
MSGS (i) shall pay Spinco the Estimated Benefit Cost (defined below) for each
month from the Distribution Date through the Effective Date for each MSGS
Participant participating in such benefits (prorated for any partial month based
on the number of days in such month) and (ii) acting directly or through its
Subsidiaries, shall cause the MSGS Health & Welfare Plans to fully perform, pay
and discharge all claims of MSGS Participants that are incurred on or after the
Effective Date. The “Estimated Benefit Cost” shall equal the aggregate monthly
cost of such self-insured benefits on a per-employee basis, as set forth in
Spinco’s applicable annual budget (as may be adjusted quarterly), taking into
account relevant claims experience. As soon as administratively practicable
after the Effective Date, Spinco and MSGS shall determine the actual cost of
providing such self-insured benefits to the MSGS Participants for the period
from the Distribution Date through the Effective Date (the “Actual Benefit
Cost”), which shall be determined based on the number, and claims experience, of
MSGS Participants and Spinco Participants during that period. If the Actual
Benefit Cost is greater than the aggregate Estimated Benefit Cost paid by MSGS,
then MSGS shall promptly pay Spinco such shortfall, or if the aggregate
Estimated Benefit Cost paid by MSGS is greater than the Actual Benefit Cost,
then Spinco shall promptly reimburse such excess amount to MSGS. Except as
provided otherwise herein, MSGS shall promptly reimburse Spinco for the
administrative and other expenses related to self-insured benefit claims of MSGS
Participants paid by the Spinco Health & Welfare Plans or Spinco that were
incurred prior to the Effective Date (whether reported or unreported by the
Effective Date).

 

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(i) Short-Term Disability.

(A) Any MSGS Participant who is on short-term disability leave and receiving
short-term disability benefits under the Sports & Entertainment, LLC Short Term
Disability Plan as of the Effective Date shall continue to receive short-term
disability benefits under the MSG Sports & Entertainment, LLC Short Term
Disability Plan. MSGS, as a Participating Company, shall reimburse Spinco for
all administrative and other expenses paid by the MSG Sports & Entertainment,
LLC Short Term Disability Plan or Spinco after the Effective Date. MSGS shall
continue to pay any short-term disability benefits owed to an MSGS Participant
under the MSG Sports & Entertainment, LLC Short Term Disability Plan.

(B) Any MSGS Participant who is on a short-term disability leave as of the
Effective Date, and who but for the transactions contemplated under the
Distribution Agreement would have become eligible for long-term disability
benefits in accordance with the provisions of the MSG Sports & Entertainment,
LLC Long Term Disability Plan, will continue to be eligible for long-term
disability benefits under the MSG Sports & Entertainment, LLC Long Term
Disability Plan.

(c) Incurred Claim Definition. For purposes of this Section 6.5, a claim or
Liability is deemed to be incurred (i) with respect to medical, dental, vision
and/or prescription drug benefits, upon the rendering of health services or
provision of supplies giving rise to such claim or Liability; (ii) with respect
to life insurance, accidental death and dismemberment and business travel
accident insurance, upon the occurrence of the event giving rise to such claim
or Liability; (iii) with respect to disability benefits, upon the date of an
individual’s disability, as determined by the disability benefit insurance
carrier or claim administrator, giving rise to such claim or Liability; and
(iv) with respect to a period of continuous hospitalization (or any medical or
other service or supply performed or provided during the period of continuous
hospitalization), upon the date of admission to the hospital.

(d) Retiree Medical Program. Notwithstanding the foregoing, Spinco shall retain
all Liabilities under the Spinco Retiree Medical Program, whether incurred
before, on or after the Distribution Date, with respect to qualifying MSGS
Participants and Spinco Participants.

Section 6.6 Time-Off Benefits. MSGS shall credit each MSGS Participant with the
amount of accrued but unused vacation time, sick time and other time-off
benefits as such MSGS Participant had with the Spinco Group as of the
Distribution Date or as of an employee’s transfer date for a Spinco Employee who
becomes an MSGS Employee prior to the Service Crediting Date. Spinco shall
credit each Spinco Participant with the amount of accrued but unused vacation
time, sick time and other time-off benefits as of an employee’s transfer date
for an MSGS Employee who becomes a Spinco Employee prior to the Service
Crediting Date. Notwithstanding the above, MSGS shall not be required to credit
any MSGS Participant and Spinco shall not be required to credit any Spinco
Participant with any accrual to the extent that a benefit attributable to such
vacation time, sick time and other time-off benefits is paid by the Spinco Group
or MSGS Group, respectively.

 

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Section 6.7 Severance Pay Plans. The Parties acknowledge and agree that the
transactions contemplated by the Distribution Agreement will not constitute a
termination of employment of any Spinco Participant or MSGS Participant for
purposes of any policy, plan, program or agreement of MSGS or Spinco or any
member of the MSGS Group or Spinco Group that provides for the payment of
severance, separation pay, salary continuation or similar benefits in the event
of a termination of employment.

ARTICLE VII

EQUITY COMPENSATION

Section 7.1 Equity Compensation. The Parties, including through instructions
with their respective administrators and recordkeepers, shall use commercially
reasonable efforts and shall cooperate in good faith to take all actions
reasonably necessary or appropriate for the adjustment of the Equity
Compensation under the MSGS Share Plans, for the issuance of the Equity
Compensation under the Spinco Share Plans, and to coordinate the tax treatment
of such Equity Compensation as set forth in this Article VII, all in a manner
consistent with the resolutions adopted by the MSGS Compensation Committee in
connection with the Distribution and the provisions of this Article VII.

Section 7.2 Taxes and Withholding.

(a) Options.

(i) Exercise Price.

(A) Upon the exercise of an MSGS Option, whether by an MSGS Employee, Former
MSGS Employee, MSGS Director, Spinco Employee, Former Spinco Employee or Spinco
Director, the Parties shall take steps to ensure that the exercise price is
delivered to MSG.

(B) Upon the exercise of a Spinco Option, whether by an MSGS Employee, Former
MSGS Employee, MSGS Director, Spinco Employee, Former Spinco Employee or Spinco
Director, the Parties shall take steps to ensure that the exercise price is
delivered to Spinco.

(ii) Taxes.

(A) Upon exercise of an MSGS Option or Spinco Option, the employer or, in the
case of a Former MSGS Employee or Former Spinco Employee, the former employer of
such holder shall fund any employer taxes.

(B) Upon exercise of an MSGS Option or Spinco Option, the Parties shall take
steps to ensure that the applicable withholding amount is remitted in cash to
the employer or, in the case of a Former MSGS Employee or Former Spinco
Employee, the former employer of such holder.

 

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(b) [Intentionally Omitted.]

(c) Restricted Stock Units.

(i) Settlement.

(A) After the Distribution Date, MSGS shall be responsible for all Liabilities
under MSGS RSUs, whether such MSGS RSUs are held by MSGS Employees, Former MSGS
Employees, Spinco Employees, Former Spinco Employees and individuals who
received such MSGS RSUs in their capacity as MSGS Directors. MSGS shall settle,
and satisfy any dividend obligations with respect to, such MSGS RSUs in
accordance with the terms of its 2015 Employee Stock Plan and its 2015 Stock
Plan for Non-Employee Directors.

(B) After the Distribution Date, Spinco shall be responsible for all Liabilities
under Spinco RSUs, whether such Spinco RSUs are held by MSGS Employees, Former
MSGS Employees, Spinco Employees or Former Spinco Employees. Spinco shall
settle, and satisfy any dividend obligations with respect to, such Spinco RSUs
in accordance with the terms of its 2020 Employee Stock Plan.

(ii) Taxes.

(A) Upon settlement of any MSGS RSU or Spinco RSU, other than an MSGS RSU that
is held by an individual who received such MSGS RSU in his capacity as an MSGS
Director, the employer, or, in the case of a Former MSGS Employee or Former
Spinco Employee, the former employer, of such holder shall fund any employer
taxes.

(B) Upon settlement of any MSGS RSU or Spinco RSU, other than an MSGS RSU that
is held by an individual who received such MSGS RSU in his capacity as an MSGS
Director, the Parties shall take steps to ensure that the applicable withholding
amount is remitted in cash to the employer, or, in the case of a Former MSGS
Employee or Former Spinco Employee, the former employer of such holder.

(C) MSGS will be responsible for any tax reporting obligations associated with
any MSGS RSUs that are held by an individual who received such MSGS RSU in his
capacity as an MSGS Director.

(d) Tax Deductions. With respect to the Equity Compensation held by individuals
who are MSGS Employees or MSGS Directors at the time the Equity Compensation
becomes taxable and individuals who are Former MSGS Employees at such time, MSGS
shall claim any federal, state and/or local tax deductions after the
Distribution Date, and Spinco shall not claim such deductions. With respect to
the Equity Compensation held by individuals who are employees of the Spinco
Group at the time the Equity Compensation becomes taxable and individuals who
are Former Spinco Employees at such time, Spinco shall claim any federal, state

 

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and/or local tax deductions after the Distribution Date, and MSGS shall not
claim such deductions. If either MSGS or Spinco determines in its reasonable
judgment that there is a substantial likelihood that a tax deduction that was
assigned to MSGS or Spinco pursuant to this Section 7.2 will instead be
available only to the other party (whether as a result of a determination by the
IRS, a change in the Code or the regulations or guidance thereunder, or
otherwise), it will notify the other party and both Parties will negotiate in
good faith to resolve the issue in accordance with the following principle: the
party entitled to the deduction shall pay to the other party an amount that
places the other party in a financial position equivalent to the financial
position the party would have been in had the party received the deduction as
intended under this Section 7.2. Such amount shall be paid within 90 days of
filing the last tax return necessary to make the determination described in the
preceding sentence.

Section 7.3 Cooperation. In addition to any cooperation principles governed by
Article X, if, after the Distribution Date, MSGS or Spinco identify an
administrative error in the individuals identified as holding Equity
Compensation, the amount of Equity Compensation so held, the vesting level of
such Equity Compensation, or any other similar error, MSGS and Spinco shall
mutually cooperate in taking such actions as are necessary or appropriate to
place, as nearly as reasonably practicable, the individual and MSGS and Spinco
in the position in which they would have been had the error not occurred. Each
of the Parties shall establish an appropriate administration system in order to
handle in an orderly manner exercises of MSGS Options and Spinco Options and the
settlement of MSGS RSUs and Spinco RSUs. Each of the Parties will work together
to unify and consolidate all indicative data and payroll and employment
information on regular timetables and make certain that each applicable entity’s
data and records with respect to Equity Compensation are correct and updated on
a timely basis. The foregoing shall include employment status and information
required for tax withholding/remittance, compliance with trading windows and
compliance with the requirements of the Securities Exchange Act of 1934 and
other applicable Laws.

Section 7.4 SEC Registration. The Parties mutually agree to use commercially
reasonable efforts to maintain effective registration statements with the
Securities and Exchange Commission with respect to the long-term incentive
awards to the extent any such registration statement is required by applicable
Law.

Section 7.5 Savings Clause. The Parties hereby acknowledge that the provisions
of this Article VII are intended to achieve certain tax, legal and accounting
objectives and, in the event such objectives are not achieved, the Parties agree
to negotiate in good faith regarding such other actions that may be necessary or
appropriate to achieve such objectives.

ARTICLE VIII

ADDITIONAL COMPENSATION AND BENEFITS MATTERS

Section 8.1 Cash Incentive Awards.

(a) Cooperation. The Parties shall use commercially reasonable efforts and shall
cooperate in good faith to take all actions reasonably necessary or appropriate
to achieve the treatment of annual cash incentive awards established under MSG’s
2015 Cash Incentive Plan (or the comparable non-executive annual incentive plan
maintained by MSG) as approved by the MSGS Compensation Committee prior to the
Distribution in accordance with the terms of such Plans and the award agreements
issued thereunder, including as set forth in this Section 8.1.

 

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(b) Liability.

(i) Effective as of the Distribution Date, Spinco shall assume or retain, as
applicable, responsibilities for all Liabilities, and fully perform, pay and
discharge all Liabilities when such Liabilities become due, relating to any
annual cash incentive awards, or portion of any such incentive awards, including
awards established under MSG’s 2015 Cash Incentive Plan (or the comparable
non-executive annual incentive plan maintained by MSG), that any Spinco
Participant is eligible to receive with respect to any performance period that
ends after the Distribution Date and, effective as of the Distribution Date,
MSGS shall have no obligations with respect to any such incentive awards. As
soon as reasonably practicable, but in any event within 30 days, following the
date that MSGS or Spinco pays an annual cash incentive award established with
respect to the fiscal year ending June 30, 2020 to a MSGS Participant or Spinco
Participant who, immediately prior to the Distribution, was a “corporate”
employee of MSGS (including Shared Executives), the Parties shall cooperate to
ensure that each Party is responsible for (and reimburses as applicable) the
portion of the Liability with respect to such award accrued as of the
Distribution Date (after giving effect to the portion of such Liability
allocated to MSG Networks Inc.) reflected on Exhibit H, except as otherwise
agreed between the Parties.

(ii) MSGS acknowledges and agrees that, except as otherwise provided herein, it
shall have full responsibility with respect to any Liabilities and the payment
or performance of any obligations arising out of or relating to any incentive,
commission or other similar compensatory arrangement previously provided by any
member of the MSGS Group or Spinco Group to any MSGS Participant.

(iii) Spinco acknowledges and agrees that, except as otherwise provided herein,
it shall have full responsibility with respect to any Liabilities and the
payment or performance of any obligations arising out of or relating to any
incentive, commission or other similar compensatory arrangement previously
provided by any member of the MSGS Group or Spinco Group to any Spinco
Participant.

Section 8.2 Individual Arrangements.

(a) MSGS Individual Arrangements. MSGS acknowledges and agrees that, except as
otherwise provided herein, it shall have full responsibility with respect to any
Liabilities and the payment or performance of any obligations arising out of or
relating to any employment, separation, severance, consulting, non-competition,
retention or other compensatory arrangement previously provided by any member of
the MSGS Group or Spinco Group to any MSGS Participant.

(b) Spinco Individual Arrangements. Spinco acknowledges and agrees that, except
as otherwise provided herein, it shall have full responsibility with respect to
any Liabilities and the payment or performance of any obligations arising out of
or relating to any employment, separation, severance, consulting,
non-competition, retention or other compensatory arrangement previously provided
by any member of the MSGS Group or Spinco Group to any Spinco Participant.

 

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(c) [Intentionally Omitted].

(d) Effect of the Distribution on Severance. The Parties acknowledge and agree
that the transactions contemplated by the Distribution Agreement will not
constitute a termination of employment of any Spinco Participant for purposes of
any policy, plan, program or agreement of MSGS or Spinco or any member of the
MSGS Group or Spinco Group that provides for the payment of severance,
separation pay, salary continuation or similar benefits in the event of a
termination of employment.

(e) Rangers and Knicks Arrangements. As of the Distribution Date, MSGS shall
assume the compensation and/or salary arrangements, and any agreements and
assets related thereto, in respect of Glen Sather, Kevin Stevens, Bradley
Richards, Daniel Girardi, Kevin Shattenkirk, Scott Arniel and Darryl Williams.
As of the Distribution Date, MSGS shall assume the compensation and/or salary
arrangements, and any agreements and assets related thereto, in respect of
Joakim Noah, Zach Randolph, David Fizzdale, Steve Mills and Keith Smart.

Section 8.3 Non-Competition. For the purpose of any non-compete provision in any
MSGS Plan or any award thereunder, Spinco shall not be regarded as a
“competitive entity.” For the purpose of any non-compete provision in any Spinco
Plan or any award thereunder, MSGS shall not be regarded as a “competitive
entity.” This Section 8.3 shall apply only so long as MSGS and Spinco remain
under common Control.

Section 8.4 Collective Bargaining. To the extent any provision of this Agreement
is contrary to the provisions of any collective bargaining agreement to which
MSGS or Spinco or any of their respective Subsidiaries is a party, the terms of
such collective bargaining agreement shall prevail. Should any provisions of
this Agreement be deemed to relate to a topic determined by an appropriate
authority to be a mandatory subject of collective bargaining, MSGS or Spinco may
be obligated to bargain with the union representing affected employees
concerning those subjects.

Section 8.5 Union Dues; Severance and Fringe Benefits. MSGS and its Subsidiaries
shall retain responsibility for the payment of dues and severance and fringe
benefit payments on behalf of MSGS Employees with respect to the unions set
forth on Exhibit F. Spinco and its Subsidiaries shall retain responsibility for
the payment of dues and severance and fringe benefit payments on behalf of
Spinco Employees with respect to the unions set forth on Exhibit G.

Section 8.6 Director Programs. MSGS shall retain responsibility for the payment
of any fees and MSGS RSUs payable in respect of service on the MSGS Board of
Directors that are payable but not yet paid as of the Distribution Date, and
Spinco shall have no responsibility for any such payments (to an individual who
is a member of the Spinco Board of Directors as of the Distribution Date or
otherwise).

 

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Section 8.7 Sections 162(m)/409A. Notwithstanding anything in this Agreement to
the contrary (including the treatment of supplemental and deferred compensation
plans, outstanding long-term incentive awards and annual incentive awards as
described herein), the Parties agree to negotiate in good faith regarding the
need for any treatment different from that otherwise provided herein to ensure
that (i) a federal income tax deduction for the payment of such supplemental or
deferred compensation or long-term incentive award, annual incentive award or
other compensation is not limited by reason of Section 162(m) of the Code, if
applicable, and (ii) the treatment of such supplemental or deferred compensation
or long-term incentive award, annual incentive award or other compensation does
not cause the imposition of a tax under Section 409A of the Code.

ARTICLE IX

INDEMNIFICATION

Section 9.1 Indemnification. All Liabilities retained or assumed by or allocated
to MSGS or the MSGS Group pursuant to this Agreement shall be deemed to be “MSGS
Liabilities” (as defined in the Distribution Agreement) for purposes of
Article III of the Distribution Agreement, and all Liabilities retained or
assumed by or allocated to Spinco or the Spinco Group pursuant to this Agreement
shall be deemed to be “Spinco Liabilities” (as defined in the Distribution
Agreement) for purposes of Article III of the Distribution Agreement.

ARTICLE X

GENERAL AND ADMINISTRATIVE

Section 10.1 Sharing of Information. MSGS and Spinco (acting directly or through
their respective Subsidiaries) shall provide to the other and their respective
agents and vendors all Information as the other may reasonably request to enable
the requesting Party to administer efficiently and accurately each of its Plans,
to assist Spinco in obtaining its own insurance policies to provide benefits
under Spinco Plans, and to determine the scope of, as well as fulfill, its
obligations under this Agreement; provided, however, that, in the event that any
Party reasonably determines that any such provision of Information could be
commercially detrimental to such Party or any member of its Group, violate any
Law or agreement to which such Party or member of its Group is a party, or waive
any attorney-client privilege applicable to such Party or member of its Group,
the Parties shall provide any such Information and the Parties shall take all
reasonable measures to comply with the obligations pursuant to this Section 10.1
in a manner that mitigates any such harm or consequence to the extent
practicable, and the Parties agree to cooperate with each other and take such
commercially reasonable steps as may be practicable to preserve the
attorney-client privilege with respect to the disclosure of any such
Information. Such Information shall, to the extent reasonably practicable, be
provided in the format and at the times and places requested, but in no event
shall the Party providing such Information be obligated to incur any
out-of-pocket expenses not reimbursed by the Party making such request or make
such Information available outside of its normal business hours and premises.
Any Information shared or exchanged pursuant to this Agreement shall be subject
to the same confidentiality requirements set forth in Section 4.4 of the
Distribution Agreement.

 

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Section 10.2 Reasonable Efforts/Cooperation. Each of the Parties hereto will use
its commercially reasonable efforts to promptly take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Laws and regulations to consummate the transactions
contemplated by this Agreement, including adopting plans or plan amendments.
Each of the Parties hereto shall cooperate fully on any issue relating to the
transactions contemplated by this Agreement for which the other Party seeks a
determination letter or private letter ruling from the IRS, an advisory opinion
from the DOL or any other filing, consent or approval with respect to or by a
Governmental Authority.

Section 10.3 Non-Termination of Employment; No Third-Party Beneficiaries. No
provision of this Agreement or the Distribution Agreement shall be construed to
create any right, or accelerate entitlement, to any compensation or benefit
whatsoever on the part of any MSGS Employee or Spinco Employee or other future,
present, or former employee of any member of the MSGS Group or Spinco Group
under any MSGS Plan or Spinco Plan or otherwise. This Agreement is solely for
the benefit of the Parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person or persons (including any employee or former
employee of MSGS or Spinco or either of their respective Subsidiaries or any
beneficiary or dependent thereof) any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement. No provision in this Agreement
shall modify or amend any other agreement, plan, program, or document unless
this Agreement explicitly states that the provision “amends” that other
agreement, plan, program, or document. This shall not prevent the Parties
entitled to enforce this Agreement from enforcing any provision in this
Agreement, but no other person shall be entitled to enforce any provision in
this Agreement on the grounds that it is an amendment to another agreement,
plan, program, or document unless the provision is explicitly designated as such
in this Agreement, and the person is otherwise entitled to enforce the other
agreement, plan, program, or document. If a person not entitled to enforce this
Agreement brings a lawsuit or other action to enforce any provision in this
Agreement as an amendment to another agreement, plan, program, or document, and
that provision is construed to be such an amendment despite not being explicitly
designated as one in this Agreement, that provision in this Agreement shall be
void ab initio, thereby precluding it from having any amendatory effect.
Furthermore, nothing in this Agreement is intended to confer upon any employee
or former employee of MSGS, Spinco or either of their respective Subsidiaries
any right to continued employment, or any recall or similar rights to an
individual on layoff or any type of approved leave.

Section 10.4 Consent of Third Parties. If any provision of this Agreement is
dependent on the consent of any third party and such consent is withheld, the
Parties hereto shall use their reasonable best efforts to implement the
applicable provisions of this Agreement to the fullest extent practicable. If
any provision of this Agreement cannot be implemented due to the failure of such
third party to consent, the Parties hereto shall negotiate in good faith to
implement the provision in a mutually satisfactory manner.

Section 10.5 Access to Employees. Following the Distribution Date, MSGS and
Spinco shall, or shall cause each of their respective Subsidiaries to, make
available to each other those of their employees who may reasonably be needed in
order to defend or prosecute any legal or administrative action (other than a
legal action between any member of the MSGS Group and any member of the Spinco
Group) to which any employee, director or Plan of the MSGS Group or Spinco Group
is a party and which relates to their respective Plans prior to the Distribution
Date.

 

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Section 10.6 Beneficiary Designation/Release of Information/Right to
Reimbursement. To the extent permitted by applicable Law and except as otherwise
provided for in this Agreement, all beneficiary designations, authorizations for
the release of information and rights to reimbursement made by or relating to
Spinco Participants under MSGS Plans shall be transferred to and be in full
force and effect under the corresponding Spinco Plans until such beneficiary
designations, authorizations or rights are replaced or revoked by, or no longer
apply to, the relevant Spinco Participant.

Section 10.7 Not a Change in Control. The Parties hereto acknowledge and agree
that the transactions contemplated by the Distribution Agreement and this
Agreement do not constitute a “change in control” for purposes of any MSGS Plan
or Spinco Plan.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Effect If Distribution Does Not Occur. Notwithstanding anything in
this Agreement to the contrary, if the Distribution Agreement is terminated
prior to the Distribution Date, then all actions and events that are, under this
Agreement, to be taken or occur effective immediately prior to or as of the
Distribution Date, or otherwise in connection with the Distribution, shall not
be taken or occur except to the extent specifically agreed to in writing by MSGS
and Spinco and neither Party shall have any Liability to the other Party under
this Agreement.

Section 11.2 Complete Agreement; Construction. This Agreement, including the
Exhibits, shall constitute the entire agreement between the Parties with respect
to the subject matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter.

Section 11.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the Parties and delivered to the other Party.

Section 11.4 Survival of Agreements. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the Parties contained in this
Agreement shall survive the Distribution Date.

Section 11.5 Notices. All notices and other communications hereunder shall be in
writing, shall reference this Agreement and shall be hand delivered or mailed by
registered or certified mail (return receipt requested) to the Parties at the
following addresses (or at such other addresses for a Party as shall be
specified by like notice) and will be deemed given on the date on which such
notice is received:

To MSG:

The Madison Square Garden Company (or, after the applicable name change, Madison
Square Garden Sports Corp.)

Two Penn Plaza

New York, New York 10121

Attention: General Counsel

 

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To Spinco:

MSG Entertainment Spinco, Inc. (or, after the applicable name change, Madison
Square Garden Entertainment Corp.)

Two Penn Plaza

New York, New York 10121

Attention: General Counsel

Section 11.6 Waivers. The failure of any Party to require strict performance by
any other Party of any provision in this Agreement will not waive or diminish
that Party’s right to demand strict performance thereafter of that or any other
provision hereof.

Section 11.7 Amendments. Subject to the terms of Sections 11.8 and 11.10 hereof,
this Agreement may not be modified or amended except by an agreement in writing
signed by each of the Parties.

Section 11.8 Assignment. This Agreement shall not be assignable, in whole or in
part, directly or indirectly, by any Party without the prior written consent of
the other Party, and any attempt to assign any rights or obligations arising
under this Agreement without such consent shall be void; provided that either
Party may assign this Agreement to a purchaser (by merger, sale of assets or
otherwise) of all or substantially all of the properties and assets of such
Party so long as such purchaser expressly assumes, in a written instrument in
form reasonably satisfactory to the non-assigning Party, the due and punctual
performance or observance of every agreement and covenant of this Agreement on
the part of the assigning Party to be performed or observed. Any arrangement in
violation of the provisions of this Section 11.8 shall be void.

Section 11.9 Successors and Assigns. The provisions to this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and permitted assigns.

Section 11.10 Subsidiaries. Each of the Parties shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth herein to be performed by any entity that is contemplated to be a
Subsidiary of such Party after the Distribution Date.

Section 11.11 Title and Headings. Titles and headings to Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.

Section 11.12 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

 

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Section 11.13 Waiver of Jury Trial. The Parties hereby irrevocably waive any and
all right to trial by jury in any legal proceeding arising out of or related to
this Agreement.

Section 11.14 Specific Performance. From and after the Distribution, in the
event of any actual or threatened default in, or breach of, any of the terms,
conditions and provisions of this Agreement, the Parties agree that the Party to
this Agreement who is or is to be thereby aggrieved shall have the right to
specific performance and injunctive or other equitable relief of its rights
under this Agreement, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies shall be cumulative. The
Parties agree that, from and after the Distribution, the remedies at law for any
breach or threatened breach of this Agreement, including monetary damages, are
inadequate compensation for any Loss, that any defense in any action for
specific performance that a remedy at law would be adequate is hereby waived,
and that any requirements for the securing or posting of any bond with such
remedy are hereby waived.

Section 11.15 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The Parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

[signature page follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written.

 

THE MADISON SQUARE GARDEN COMPANY

(to be renamed Madison Square Garden Sports Corp.)

By:  

/s/ Andrew Lustgarten

  Name:   Andrew Lustgarten   Title:   President

MSG ENTERTAINMENT SPINCO, INC.

(to be renamed Madison Square Garden Entertainment Corp.)

By:  

/s/ James L. Dolan

  Name:   James L. Dolan   Title:   Executive Chairman and Chief Executive
Officer

[Signature Page to Employee Matters Agreement]