Document:

exv10w16

Exhibit 10.16

August 11, 2010

Mr. Sean Sullivan

c/o Rainbow Media Holdings, LLC

11 Penn Plaza

New York, New York 10001

Dear Sean:

          Following up on our recent conversations, I am pleased to forward this letter setting forth
the details of the employment offer we have previously discussed. The prospect of your joining
Cablevision is exciting to all of us here, and I am gratified by your initial enthusiastic response
to our offer.

          As I indicated to you, this offer is conditioned upon your successful completion of our
pre-employment screening and testing process. Following the completion of that process, you will
join the Company as an at will employee with the title of Chief Corporate Officer within our
Rainbow business unit.

          Your initial base salary will be $575,000 annually, paid bi-weekly. Beginning with calendar
year 2010, you will be eligible to participate in our discretionary annual bonus program with an
annual target bonus opportunity equal to 60 percent of salary. Bonus payments are based on actual
salary dollars paid during the year and depend on a number of factors including Company, unit and
individual performance. However, the decision of whether or not to pay a bonus, and the amount of
that bonus, if any, is made by the Company in its sole discretion. Bonuses are typically paid
early in the subsequent calendar year. In order to receive a bonus, you must be employed by the
Company at the time bonuses are being paid. Your base salary and annual target bonus opportunity
will not be reduced during the term of this letter.

          In addition, you will be entitled to a special bonus of $150,000, payable within thirty (30)
days after your start date and $150,000 payable on the first anniversary of your start date,
provided that, in each case, your employment with the Company has not been terminated by the
Company for Cause and you have not voluntarily terminated your employment with the Company prior to
such date. If you voluntarily terminate your employment with the Company prior to the three month
anniversary of your start date, you agree to refund to the Company within thirty (30) days of such
termination any such special bonuses previously paid to you.

 

 

Mr. Sean Sullivan

August 11, 2010

Page 2

          You will also be eligible, subject to your continued employment by the Company and actual
grant by the Compensation Committee of the Board of Directors of Cablevision Systems Corporation
(the “Compensation Committee”), to participate in such equity and other long-term incentive
programs that are made available in the future to similarly situated executives at the Company. In
particular, as currently contemplated in our existing long-term incentive program (which is subject
to change), it is currently expected that an employee at your level would be recommended to the
Compensation Committee annually for a cash and equity award with an aggregate target value of
$500,000 (as determined by the Compensation Committee), subject to three year cliff vesting. Any
such awards would be subject to actual grant by the Compensation Committee, would be pursuant to
the applicable plan document and would be subject to terms and conditions established by the
Compensation Committee in its sole discretion that would be detailed in separate agreements you
will receive after any award is actually made. Provided that your actual start date is no later
than September 30, 2010, you are expected to be recommended to the Compensation Committee to
receive awards in 2010 with pro rated target values to reflect your mid-year hire (based on the
number of full months remaining in the year as of your start date divided by 12).

          You will also be eligible for our standard benefits program made available to similarly
situated executives at the Company. Participation in our benefits program is subject to meeting
the relevant eligibility requirements, payment of the required premiums, and the terms of the plans
themselves. We currently offer medical, dental, vision, life, and accidental death and
dismemberment insurance; short- and long-term disability insurance; a savings and retirement
program; and ten paid holidays. You will also be eligible for vacation in accordance with Company
policy.

          If, prior to the twenty four-month anniversary of your actual start date (the “Reference
Date”), your employment is involuntarily terminated by the Company for any reason other than
Cause, the Company will pay you, subject to the last sentence of this paragraph, an amount equal to
the greater of (a) your pro rated base salary from the effective date of the termination of your
employment through the Reference Date and (b) six months of your base salary (the “Severance
Amount”). Sixty percent (60%) of the Severance Amount will be payable to you on the six-month
anniversary of the date your employment so terminates (the “Termination Date”) and the remaining
forty percent (40%) of the Severance Amount will be payable to you on the twelve-month anniversary
of the Termination Date. Your entitlement to such payment, however, will be subject first to your
execution and the effectiveness of a severance agreement to the Company’s satisfaction, which
agreement will be substantially similar to the Company’s then standard form of severance agreement
(other than to the extent the Company believes specific circumstances should be addressed in such
agreement), if any, and will include, for example, non competition (limited to a period equal to
the greater of (x) the number of full months following the Termination Date through the Reference
Date and (y) six months), non-solicitation, non-disparagement, confidentiality and further
cooperation commitments by you as well as a general release by you of the Company and its
affiliates (and their respective directors, officers and employees).

 

Mr. Sean Sullivan

August 11, 2010

Page 3

          In addition to the foregoing, in the event your employment is involuntarily terminated by the
Company for any reason other than Cause, the Company will pay you the amount owed to you on account
of the special bonuses as set forth in the fourth paragraph of this letter, if any, to the extent
not previously paid.

          In connection with any termination of your employment, all of your outstanding equity and cash
incentive awards, if any, shall be treated in accordance with their terms.

          For purposes of this letter, “Cause” means your (i) commission of an act of fraud,
embezzlement, misappropriation, willful misconduct, gross negligence or breach of fiduciary duty
against the Company or an affiliate thereof, or (ii) commission of any act or omission that results
in a conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated
probation for any crime involving moral turpitude or any felony.

          The Company may withhold from any payment due to you any taxes required to be withheld under
any law, rule or regulation. If any payment otherwise due to you hereunder would result in the
imposition of the excise tax imposed by Section 4999 of the Internal Revenue Code, the Company will
instead pay you either (i) such amount or (ii) the maximum amount that could be paid to you without
the imposition of the excise tax, depending on whichever amount results in your receiving the
greater amount of after-tax proceeds. In the event that the payments and benefits payable to you
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 you 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 you until the reduction specified is achieved.

          If and to the extent that any payment or benefit under this letter, or any plan, award or
arrangement of the Company or its affiliates, is determined by the Company to constitute
“non-qualified deferred compensation” subject to Section 409A of the Internal Revenue Code
(“Section 409A”) and is payable to you by reason of your termination of employment, then (a) such
payment or benefit shall be made or provided to you only upon a “separation from service” as
defined for purposes of Section 409A under applicable regulations and (b) if you are a “specified
employee” (within the meaning of Section 409A as determined by the Company), such payment or
benefit shall not be made or provided before the date that is six months after the date of your
separation from service (or, if earlier than the expiration of such six-month period, the date of
death). Any amount not paid or benefit not provided in respect of the six-month period specified in
the preceding sentence will be paid to you in a lump sum or provided to you as soon as practicable
after the expiration of such six-month period. Any such payment or benefit shall be treated as a
separate payment for purposes of Section 409A to the extent Section 409A applies to such payment or
benefit.

          To the extent you are entitled to any expense reimbursement from the Company that is subject
to Section 409A, (i) 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), (ii) in no event shall any such
expense be reimbursed after the last day of the calendar year following the

 

Mr. Sean Sullivan

August 11, 2010

Page 4

calendar year in which you incurred such expense, and (iii) in no event shall any right to
reimbursement be subject to liquidation or exchange for another benefit.

          This letter does not constitute a guarantee of employment or benefits for any definite period.
You or the Company may terminate your employment at any time, with or without notice, liability or
cause. This letter shall inure to the benefit of and be binding upon the Company and its
successors and assigns. This letter reflects the entire understanding and agreement of you and the
Company with respect to the subject matter hereof and supersedes any prior understandings or
agreements.

          Unless the Company publicly discloses this letter, you agree to keep this letter and its terms
strictly confidential provided that you are authorized to disclose this letter and its terms to
your immediate family members and your legal, financial and tax advisers and, with prior notice to
the Company (to the extent legally permitted), as may be required by law or judicial proceedings.

          This letter 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 entirely within such State.

          This letter will automatically expire and be of no further force and effect on the earlier of
(i) August 19, 2010 if it is not acknowledged by you below prior to such date or (ii) the Reference
Date (other than with respect to any severance obligations owed to you in accordance with this
letter as of that date).

          Once again, we are all most enthusiastic about the prospect of your joining the Company and
having you join our team.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Joshua Sapan
 	 
	 	Joshua Sapan 	 
	 	Chief Executive Officer

Rainbow Media Holdings, LLC 	 
	 

	 	 	 

	Accepted and Agreed
	 	 
	 
	 	 
	/s/ Sean Sullivan
 

Sean Sullivan

	 	 
	Date: 8/17/10exv10w17

Exhibit 10.17

Form Option Agreement

Vested Option Grants Without 90 Day Expiration Provision1

 

			
	1	 	This form will be used for grants of Cablevision
options with a ten year term granted on the following dates: 6/25/03, 8/4/04,
10/1/04, 10/27/04 and 11/8/05.

 

 

Exhibit 10.17

OPTION AGREEMENT

[Date]

Dear [Full Name]:

          Pursuant to the applicable Cablevision Systems Corporation Employee Stock Plan, on [•] (the
“Grant Date”), you were granted options to purchase shares of Cablevision Systems
Corporation (“Cablevision”). In conjunction with the spin-off of AMC Networks Inc. (the
“Company”) from Cablevision on [•] (the “Distribution Date”), and pursuant to the
Company’s 2011 Employee Stock Plan (the “Plan”), you are receiving the award described in
this Option Agreement (the “Agreement”) of nonqualified stock options (the
“Options”) to purchase [•] shares of AMC Networks Inc. Class A common stock (the “Class
A Common Stock”) at a price of $____ per share.

          Capitalized terms used but not defined in this Agreement have the meanings given to them in
the Plan. The Options are granted subject to the terms and conditions set forth below:

          1. Vesting. The Options are immediately exercisable.

          2. Exercise. You may exercise the Options by giving written notice to the Secretary of the
Company, or by following such procedures as established by the Company, specifying the number of
shares of Class A Common Stock as to which the Options are being exercised (the “Exercise
Notice”), together with a copy of this Agreement. Unless the Company chooses to settle such
exercise in cash, shares of Class A Common Stock, or a combination thereof pursuant to Paragraph 3,
you will be required to deliver to the Company, or such person as the Company may designate, within
such time period as the Company may require, payment in full of the exercise price due on account
of such exercise. You may pay the exercise price by cash, by certified check, by surrendering
shares of Class A Common Stock or by any combination thereof. Class A Common Stock used to pay the
exercise price pursuant to this Paragraph 2 will be valued at the Fair Market Value as of the day
preceding the date of exercise.

          3. Option Spread. Upon receipt of the Exercise Notice, the Company may elect, in lieu of
issuing shares of Class A Common Stock, to settle the exercise covered by such notice by paying you
an amount equal to the product obtained by multiplying (i) the excess of the Fair Market Value of
one (1) share of Class A Common Stock on the date of exercise over the per share exercise price of
the Options (the “Option Spread”) by (ii) the number of shares of Class A Common Stock
specified in the Exercise Notice. The amount payable to you in these circumstances may be paid by
the Company either in cash or in shares of Class A Common Stock having a Fair Market Value equal to
the Option Spread, or a combination thereof, as the Company shall determine. Class A Common Stock
used to pay the Option Spread pursuant to this Paragraph 3 will be valued at the Fair Market Value
as of the day the Exercise Notice is received by the Company.

 

 

          4. Expiration. The Options will terminate automatically and without further notice on the
tenth (10th) anniversary of the Grant Date, or at any of the following dates, if
earlier:

	 	(A)	 	one hundred and eighty (180) days following the date upon which
you are no longer employed by either the AMC Group, the MSG Group or the
Cablevision Group (each as defined below), unless you cease to be an employee
by reason of (x) death, Disability (as defined below) or Retirement (as defined
below) with your Employer’s consent or (y) termination from your Employer for
Cause (as defined below); provided, that for purposes of this Section
4(A), you shall be deemed to cease to be an employee of the AMC Group, the MSG
Group or the Cablevision Group if you transfer from the AMC Group, MSG Group or
Cablevision Group (each a “Member Company”) to any Member Company which is not
an Affiliate of the Member Company from which you have transferred;
	 
	 	(B)	 	three (3) years following the date upon which you are no longer
employed by either the AMC Group, the MSG Group or the Cablevision Group, if
such cessation is the result of death, Disability or Retirement; or
	 
	 	(C)	 	the date upon which your employment with your Employer is
terminated for Cause.

          Notwithstanding the first sentence of this Paragraph 4, in the event of your death during the
period that your Options are exercisable, whether death occurs before or after you cease
employment, the Options that are exercisable at the time of your death shall remain exercisable by
your estate or beneficiary until the earlier of the third (3rd) anniversary of your death and the
eleventh (11th) anniversary of the Grant Date.

          For purposes of this Agreement, the “Cablevision Group” means Cablevision Systems
Corporation and any of its subsidiaries and Affiliates, other than AMC Networks Inc. and The
Madison Square Garden Company and their respective subsidiaries. The “AMC Group” means AMC
Networks Inc. and any of its subsidiaries and Affiliates, other than Cablevision Systems
Corporation and The Madison Square Garden Company and their respective subsidiaries. The “MSG
Group” means The Madison Square Garden Company and any of its subsidiaries and Affiliates,
other than Cablevision Systems Corporation and AMC Networks Inc. and their respective subsidiaries.

          For purposes of this Agreement, “Cause” means, as determined by the compensation
committee of your Employer, your (i) commission of an act of fraud, embezzlement, misappropriation,
willful misconduct, gross negligence or breach of fiduciary duty against your Employer or any of
its Affiliates, or (ii) commission of any act or omission that results in a conviction, plea of no
contest, plea of nolo contendere, or imposition of unadjudicated probation for any crime involving
moral turpitude or any felony.

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          For purposes of this Agreement, “Disability” means your inability to perform for six
(6) continuous months substantially all the essential duties of your occupation, as determined by
the compensation committee of your Employer.

          For purposes of this Agreement, if you are employed by the Cablevision Group, your
“Employer” means Cablevision Systems Corporation; if you are employed by the AMC Group,
your “Employer” means AMC Networks Inc.; if you are employed by the MSG Group, your
“Employer” means Madison Square Garden Inc.; and if you are employed by both the
Cablevision Group and the MSG Group or the Cablevision Group and the AMC Group, as the case may be,
your “Employer” in either case shall mean Cablevision Systems Corporation.

          For purposes of this Agreement, “Retirement” means the voluntary termination by you of
your employment with your Employer at such time as (i) you have attained at least the age of
fifty-five (55) and (ii) you have been employed by the AMC Group, the MSG Group or the Cablevision
Group for at least five (5) years in the aggregate, provided that your Employer, may
nevertheless decide, in its sole discretion, not to treat your termination of employment as a
“Retirement” hereunder. Treatment of your termination of employment as a “Retirement” hereunder
shall be further subject to your execution (and the effectiveness) of a retirement agreement to
your Employer’s satisfaction, including, without limitation (to the extent desired by your
Employer), non-compete, non-disparagement, non-solicitation, confidentiality and further
cooperation obligations/restrictions on you as well as a general release by you of your Employer.
The above definition of “Retirement” is solely for purposes of this Agreement and shall not, in any
way, create or imply any obligations of the AMC Group, the MSG Group or the Cablevision Group
(under any other agreement or otherwise) with respect to any such termination of your employment.

          5.
Change of Control/Going Private Transaction. As set forth in Appendix 1 attached
hereto, the Options may be affected in the event of a Change of Control or a going private
transaction (each as defined in Appendix 1 attached hereto).

          6. Tax Representations and Tax Withholding. You hereby acknowledge that you have reviewed
with your own tax advisors the federal, state and local tax consequences of exercising the Options
and receiving shares of Class A Common Stock and cash. You hereby represent to the AMC Group, the
MSG Group and the Cablevision Group that you are relying solely on such advisors and not on any
statements or representations of the Company, The Madison Square Garden Company and Cablevision or
any of their respective Affiliates or agents.

          If, in connection with the exercise of the Options, your Employer is required to withhold any
amounts by reason of any federal, state or local tax, such withholding shall be effected in
accordance with Section 16 of the Plan.

          7. Section 409A. It is the intent that payments under this Agreement are exempt from Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”), and that the Agreement
be administered and interpreted accordingly. To the extent necessary to give effect to this
intent, in the case of any conflict or potential inconsistency between the provisions of the Plan
and this Section 7 of the Agreement, the provisions of Section 7 of this Agreement shall govern.
Notwithstanding anything to the contrary contained in this Agreement, if and to

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the extent that any payment or benefit under this Agreement is determined by your Employer to
constitute “non-qualified deferred compensation” subject to Section 409A of the Code (“Section
409A”) and is payable to you by reason of your termination of employment, then (a) such payment
or benefit shall be made or provided to you only upon a “separation from service” as defined for
purposes of Section 409A under applicable regulations and (b) if you are a “specified employee”
(within the meaning of Section 409A and as determined by your Employer), such payment or benefit
shall not be made or provided before the date that is six months after the date of your separation
from service (or your earlier death). Any amount not paid in respect of the six month period
specified in the preceding sentence will be paid to you in a lump sum after the expiration of such
six month period. Any such payment or benefit shall be treated as a separate payment for purposes
of Section 409A to the extent Section 409A applies to such payments.

          8. Transfer Restrictions. You may not transfer, assign, pledge or otherwise encumber the
Options, other than to the extent provided in the Plan.

          9. Non-Qualification as ISO. The Options are not intended to qualify as “incentive stock
options” within the meaning of Section 422A of the Code.

          10. Securities Law Acknowledgments. You hereby acknowledge and confirm to the AMC Group, MSG
Group and the Cablevision Group that (i) you are aware that the shares of Class A Common Stock are
publicly-traded securities and (ii) the shares of Class A Common Stock issuable upon exercise of
the Options may not be sold or otherwise transferred unless such sale or transfer is registered
under the Securities Act of 1933, as amended, and the securities laws of any applicable state or
other jurisdiction, or is exempt from such registration.

          11. Governing Law. This Agreement shall be deemed to be made under, and in all respects shall
be interpreted, construed and governed by and in accordance with, the laws of the State of New
York.

          12. Jurisdiction and Venue. You hereby irrevocably submit to the jurisdiction of the courts
of the State of New York and the Federal courts of the United States of America located in the
Southern District and Eastern District of the State of New York in respect of the interpretation
and enforcement of the provisions of this Agreement, and hereby waive, and agree not to assert, as
a defense that you are not subject thereto or that the venue thereof may not be appropriate. You
hereby agree that mailing of process or other papers in connection with any such action or
proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.

          13. Right of Offset. You hereby agree that the Company shall have the right to offset against
its obligation to deliver shares of Class A Common Stock, cash or other property under this
Agreement to the extent that it does not constitute “non-qualified deferred compensation” pursuant
to Section 409A, any outstanding amounts of whatever nature that you then owe to the Company or a
subsidiary of the Company.

          14. The Committee. For purposes of this Agreement, the term “Committee” means the
Compensation Committee of the Board of Directors of the Company or any replacement committee
established under, and as more fully defined in, the Plan.

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          15. Committee Discretion. The Committee has full discretion with respect to any actions to be
taken or determinations to be made in connection with this Agreement, and its determinations shall
be final, binding and conclusive.

          16. Amendment. The Committee reserves the right at any time to amend the terms and conditions
set forth in this Agreement, except that the Committee shall not make any amendment or revision in
a manner unfavorable to you (other than if immaterial), without your consent. No consent shall be
required for amendments made pursuant to Section 12 of the Plan, except that, for purposes of
Section 19 of the Plan, Section 5 and Appendix 1 of this Agreement are deemed to be “terms of an
Award Agreement expressly referring to an Adjustment Event.” Any amendment of this Agreement shall
be in writing and signed by an authorized member of the Committee or a person or persons designated
by the Committee.

          17. Options Subject to the Plan. The Options granted by this Agreement are subject to the
Plan.

          18. Entire Agreement. Except for any employment agreement between you and the AMC Group, the
MSG Group or the Cablevision Group in effect as of the Distribution Date (as such employment
agreement may be modified, renewed or replaced, provided that such modification, renewal or
replacement shall not extend the time any Options may be exercised or accelerate the vesting of any
Options beyond the time provided herein or in such original employment agreement), this Agreement
and the Plan constitute the entire understanding and agreement of you and the Company with respect
to the Options covered hereby and supersede all prior understandings and agreements. Except as
provided in this Agreement, in the event of a conflict among the documents with respect to the
terms and conditions of the Options covered hereby, the documents will be accorded the following
order of authority: the terms and conditions of the Plan will have highest authority followed by
the terms and conditions of your employment agreement, if any, followed by the terms and conditions
of this Agreement.

          19. Successors and Assigns. The terms and conditions of this Agreement shall be binding upon,
and shall inure to the benefit of, the Company and its successors and assigns.

          20. Waiver. No waiver by the Company at any time of any breach by you of, or compliance with,
any term or condition of this Agreement or the Plan to be performed by you shall be deemed a waiver
of the same, any similar or any dissimilar term or condition at the same or at any prior or
subsequent time.

          21. Severability. The terms or conditions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any term or condition hereof shall not affect the validity or
enforceability of the other terms and conditions set forth herein.

          22. Exclusion from Compensation Calculation. By acceptance of this Agreement, you shall be
considered in agreement that all shares of Class A Common Stock and cash received upon each
exercise of the Options shall be considered special incentive compensation and will be exempt from
inclusion as “wages” or “salary” in pension, retirement, life insurance and other employee benefits
arrangements of your Employer, except as determined otherwise by your Employer. In addition, each
of your beneficiaries shall be deemed to be in

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agreement that all such shares of Class A Common Stock and cash be exempt from inclusion in
“wages” or “salary” for purposes of calculating benefits of any life insurance coverage sponsored
by your Employer.

          23. No Right to Continued Employment. Nothing contained in this Agreement or the Plan shall
be construed to confer on you any right to continue in the employ of the AMC Group, the MSG Group
or the Cablevision Group, as applicable, or derogate from the right of the AMC Group, the MSG Group
or the Cablevision Group, as applicable, to retire, request the resignation of, or discharge you,
at any time, with or without cause.

          24. Headings. The headings in this Agreement are for purposes of convenience only and are not
intended to define or limit the construction of the terms and conditions of this Agreement.

          25. Effective Date. Upon execution by you, this Agreement shall be effective from and as of
the Distribution Date.

          26. Signatures. Execution of this Agreement by the Company may be in the form of an
electronic or similar signature and such signature shall be treated as an original signature for
all purposes.

	 	 	 	 	 
	 	AMC NETWORKS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

          By your electronic signature, you (i) acknowledge that a complete copy of the Plan and an
executed original of this Agreement have been made available to you and (ii) agree to all of the
terms and conditions set forth in the Plan and this Agreement.

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APPENDIX 1

TO

STOCK OPTION AWARD AGREEMENT

     1. In the event of a “Change of Control” or a “going private transaction” with
respect to the Company, as defined below, your entitlement to exercise the Options shall be as
follows:

          a. If the Company or the “Surviving Entity,” as defined below, has shares of common
stock (or partnership units) traded on a national stock exchange or on the over-the-counter market
as reported on NASDAQ, the Committee shall, to the extent that the Options have not been exercised
and have not expired (the “Outstanding Options”), no later than the effective date of the
transaction which results in a Change of Control or going private transaction with respect to the
Company either (A) convert your rights in the Outstanding Options into a right to receive an amount
of cash equal to (i) the number of common shares subject or relating to the Outstanding Options
multiplied by (ii) the excess of (x) the “offer price per share,” the “acquisition
price per share” or the “merger price per share,” each as defined below, whichever of
such amounts is applicable, over (y) the exercise price of the shares subject or relating to the
Outstanding Options, or (B) arrange to have the Surviving Entity grant to you in substitution for
your Outstanding Options an award of options for shares of common stock (or partnership units) of
the Surviving Entity on the same terms with a value equivalent to the Outstanding Options and which
will, in the good faith determination of the Committee, provide you with an equivalent profit
potential.

          b. If the Company or the Surviving Entity does not have shares of common stock (or partnership
units) traded on a national stock exchange or on the over-the-counter market as reported on NASDAQ,
the Committee shall convert your rights in the Outstanding Options into a right to receive an
amount of cash equal to the amount calculated as per Section 1(A) above.

          c. The cash award provided in Section 1(a) or 1(b) shall become payable to you, and the
substitute options of the Surviving Entity provided in Section 1(a) will become exercisable (1)
with respect to the Outstanding Options that were not exercisable on the effective date of the
Change of Control or going private transaction with respect to the Company, as the case may be, at
the earlier of (a) the date on which the Outstanding Options would otherwise have become
exercisable hereunder had they continued in effect, or (b) if immediately prior to termination you
were an AMC Employee, the date on which (i) your employment with the AMC Group or the Surviving
Entity is terminated by the AMC Group or the Surviving Entity other than for Cause, if such
termination occurs within three (3) years of the Change of Control or going private transaction
with respect to the Company, (ii) your employment with the AMC Group or the Surviving Entity is
terminated by you for “good reason,” as defined below, if such termination occurs within three (3)
years of the Change of Control or going private transaction with respect to the Company or (iii)
your employment with the AMC Group or one of its subsidiaries or the Surviving Entity is terminated
by you for any reason at least six (6) months, but not more than

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nine (9) months after the effective date of the Change of Control or going private transaction
with respect to the Company; provided that clause (iii) herein shall not apply in the event
that your rights in the Outstanding Options are converted into a right to receive an amount of cash
in accordance with Section 1(a), or (2) with respect to the Outstanding Options that were
exercisable on the effective date of the Change of Control or going private transaction with
respect to the Company, as the case may be, the substitute options shall become exercisable
immediately and the cash awards shall become payable promptly. The amount payable in cash shall be
payable together with interest from the effective date of the Change of Control or going private
transaction with respect to the Company until the date of payment at (a) the weighted average cost
of capital of the Company immediately prior to the effectiveness of the Change of Control or going
private transaction with respect to the Company, or (b) if the Company (or the Surviving Entity)
sets aside the funds in a trust or other funding arrangement, the actual earnings of such trust or
other funding arrangement.

     2. As used herein,

     “Acquisition price per share” shall mean the greater of (i) the highest price per
share stated on the Schedule 13D or any amendment thereto filed by the holder of twenty percent
(20%) or more of the Company’s voting power which gives rise to the Change of Control or going
private transaction with respect to the Company, and (ii) the highest fair market value per share
of common stock during the ninety-day period ending on the date of such Change of Control or going
private transaction with respect to the Company.

     “AMC Employee” means any individual who is employed by the AMC Group.

     “Change of Control” means the acquisition, in a transaction or a series of related
transactions, by any person or group, other than Charles F. Dolan or members of the immediate
family of Charles F. Dolan or trusts for the benefit of Charles F. Dolan or his immediate family
(or an entity or entities controlled by any of them) or any employee benefit plan sponsored or
maintained by the Company, of the power to direct the management of the Company or substantially
all its assets (as constituted immediately prior to such transaction or transactions).

     “Going private transaction” means a transaction involving the purchase of Company
securities described in Rule 13e-3 to the Securities and Exchange Act of 1934.

     “Good reason” means

     (i) without your express written consent any reduction in your base salary or bonus potential,
or any material impairment or material adverse change in your working conditions (as the same may
from time to time have been improved or, with your written consent, otherwise altered, in each
case, after the Distribution Date) at any time after or within ninety (90) days prior to the Change
of Control, including, without limitation, any material reduction of your other compensation,
executive perquisites or other employee benefits (measured, where applicable, by level or
participation or percentage of award under any plans of the Company), or material impairment or
material adverse change of your level of responsibility, authority, autonomy or title, or to your
scope of duties;

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     (ii) any failure by your Employer to comply with any of the provisions of this Agreement,
other than an insubstantial or inadvertent failure remedied by your Employer promptly after receipt
of notice thereof given by you;

     (iii) your Employer’s requiring you to be based at any office or location more than
thirty-five (35) miles from your location immediately prior to such event except for travel
reasonably required in the performance of your responsibilities; or

     (iv) any failure by the Company to obtain the assumption and agreement to perform this
Agreement by a successor as contemplated by Section 1.

     “Merger price per share” shall mean, in the case of a merger, consolidation, sale,
exchange or other disposition of assets that results in a Change of Control or going private
transaction with respect to the Company (a “Merger”), the greater of (i) the fixed or
formula price for the acquisition of shares of common stock occurring pursuant to the Merger, and
(ii) the highest fair market value per share of common stock during the ninety-day period ending on
the date of such Change of Control or going private transaction with respect to the Company. Any
securities or property which are part or all of the consideration paid for shares of common stock
pursuant to the Merger shall be valued in determining the merger price per share at the higher of
(A) the valuation placed on such securities or property by the Company, person or other entity
which is a party with the Company to the Merger, or (B) the valuation placed on such securities or
property by the Committee.

     “Offer price per share” shall mean, in the case of a tender offer or exchange offer
which results in a Change of Control or going private transaction with respect to the Company (an
“Offer”), the greater of (i) the highest price per share of common stock paid pursuant to
the Offer, or (ii) the highest fair market value per share of common stock during the ninety-day
period ending on the date of a Change of Control or going private transaction with respect to the
Company. Any securities or property which are part or all of the consideration paid for shares of
common stock in the Offer shall be valued in determining the Offer Price per share at the higher of
(A) the valuation placed on such securities or property by the Company, person or other entity
making such offer or (B) the valuation placed on such securities or property by the Committee.

     “Surviving Entity” means the entity that owns, directly or indirectly, after
consummation of any transaction, substantially all of the Company’s assets (as constituted
immediately prior to such transaction). If any such entity is at least majority-owned, directly or
indirectly, by any entity (a “parent entity”) which has shares of common stock (or partnership
units) traded on a national stock exchange or the over-the-counter market, as reported on NASDAQ,
then such parent entity shall be deemed to be the Surviving Entity provided that it there shall be
more than one such parent entity, the parent entity closest to ownership of the Company’s assets
shall be deemed to be the Surviving Entity.

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