Cablevision 2011 Annual Report Download - page 35

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will be liable to the Company or its stockholders for breach of any fiduciary duty that would otherwise
exist by reason of the fact that any such individual directs a corporate opportunity (other than certain
limited types of opportunities set forth in the policy) to Madison Square Garden or AMC Networks or any
of their respective subsidiaries instead of the Company, or does not refer or communicate information
regarding such corporate opportunities to the Company. The policy expressly validates certain contracts,
agreements, assignments and transactions (and amendments, modifications or terminations thereof)
between the Company and Madison Square Garden or AMC Networks and/or any of their respective
subsidiaries and, to the fullest extent permitted by law, provides that the actions of the overlapping
directors or officers in connection therewith are not breaches of fiduciary duties owed to the Company,
any of its subsidiaries or their respective stockholders.
We are controlled by the Dolan family. As a result of their control of us, the Dolan family has the
ability to prevent or cause a change in control or approve, prevent or influence certain actions by us.
Cablevision has two classes of common stock:
• Class B common stock, which is generally entitled to ten votes per share and is entitled
collectively to elect 75% of the Cablevision Board of Directors, and
• Class A common stock, which is entitled to one vote per share and is entitled collectively to
elect the remaining 25% of the Cablevision Board of Directors.
As of February 14, 2012, the Dolan family, including trusts for the benefit of members of the Dolan
family, collectively beneficially owned all of Cablevision's Class B common stock, less than 2% of
Cablevision's outstanding Class A common stock and approximately 72% of the total voting power of all
the outstanding Cablevision common stock. Of this amount, our Chairman, Charles F. Dolan,
beneficially owned approximately 59% of Cablevision's outstanding Class B common stock, less than 1%
of Cablevision's outstanding Class A common stock and approximately 42% of the total voting power of
all the outstanding Cablevision common stock. The members of the Dolan family holding Class B
common stock have executed a voting agreement that has the effect of causing the voting power of the
Class B stockholders to be cast as a block with respect to the election of the directors elected by the
Class B stockholders and any change of control transaction. The Dolan family is able to prevent a change
in control of Cablevision and no person interested in acquiring Cablevision will be able to do so without
obtaining the consent of the Dolan family. In the past, the Dolan family has made proposals to take
Cablevision private, including a 2007 transaction that was submitted to a vote of Cablevision's
stockholders but that did not receive shareholder approval. In each such case, the Dolan family stated that
they were only interested in pursuing their proposed transaction and would not sell their stake in
Cablevision. There can be no assurances that the Dolan family will not propose, undertake or
consummate a similar transaction in the future.
As a result of the Dolan family's ownership of all of the Class B common stock, the Dolan family has the
power to elect all the directors of Cablevision subject to election by holders of Class B common stock.
Those directors constitute a majority of Cablevision's Board of Directors. In addition, Dolan family
members may control stockholder decisions on matters in which holders of all classes of Cablevision
common stock vote together as a single class. These matters could include the amendment of some
provisions of Cablevision's certificate of incorporation and the approval of fundamental corporate
transactions. In addition, the affirmative vote or consent of the holders of at least 66-2⁄3% of the
outstanding shares of the Class B common stock, voting separately as a class, is required to approve the
authorization or issuance of any additional shares of Class B common stock. Furthermore, the Dolan
family members also have the power to prevent any amendment, alteration or repeal of any of the
provisions of Cablevision's certificate of incorporation that adversely affects the powers, preferences or
rights of the Class B common stock.