UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[x][X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section(S) 240.14a-11(c) or Section(S) 240.14a-12
COMCAST CORPORATIONComcast Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
[LOGO OF COMCAST]
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 22, 20006, 2001
----------------
The Annual Meeting of Shareholders of Comcast Corporation (the "Company")
will be held on Thursday,Wednesday, June 22, 20006, 2001 at 9:00 a.m. local time at the offices
of the Company, 1500 Market Street, West Tower, 9th Floor, Philadelphia,
Pennsylvania, for the following purposes:
1. To elect nineten directors to serve for the ensuing year and until their
respective successors shall have been duly elected and qualified.
2. To consider a proposal to approve an amendment to the Comcast
Corporation 1996 Stock Option Plan.
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 20002001 fiscal year.
3. To consider a proposal to approve the adoption of the 2001 Employee
Stock Purchase Plan.
4. To consider a proposal to approve an amendment to the 1996 Executive
Cash Bonus Plan.
5. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The close of business on May 3, 2000April 17, 2001 has been fixed as the record date
for the meeting. All shareholders of record at that time are entitled to
notice of, and all holders of Class A Common Stock and Class B Common Stock
are entitled to vote at, the meeting and any adjournment or postponement
thereof.
Because holders of Class A Special Common Stock are not generally entitled
to vote and no resolution is proposed for the meeting for which a vote of the
Class A Special Common Stock is required by law, holders of Class A Special
Common Stock are not entitled to vote at the meeting. The enclosed proxy
statement is being sent to holders of Class A Special Common Stock for
informational purposes only.
In the event that the meeting is adjourned for one or more periods
aggregating at least fifteen days due to the absence of a quorum, those
shareholders entitled to vote who attend the adjourned meeting, although
otherwise less than a quorum, shall constitute a quorum for the purpose of
acting upon any matter set forth in this notice.
All shareholders are cordially invited to attend the meeting. The Board of
Directors urges you to date, sign and return promptly the enclosed proxy with
respect to your shares of Class A Common Stock. The proxies are solicited by
the Board of Directors of the Company. The return of the proxy will not affect
your right to vote in person if you do attend the meeting. CopiesA copy of the
Company's Annual2000 Financial Report on Form 10-K and Summary Annual Report areis enclosed.
STANLEY WANG
Secretary
May 16, 20002, 2001
[LOGO OF COMCAST]
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
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PROXY STATEMENT
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The enclosed proxy is solicited by the Board of Directors of Comcast
Corporation (the "Company"), a Pennsylvania corporation, for use at the Annual
Meeting of Shareholders (the "meeting") to be held on Thursday,Wednesday, June 22, 20006, 2001
at 9:00 a.m. local time at the offices of the Company, 1500 Market Street,
West Tower, 9th Floor, Philadelphia, Pennsylvania, and any adjournment or
postponement thereof. This Proxy Statement, the foregoing notice and the
enclosed proxy are being mailed to shareholders on or about May 16, 2000.2, 2001.
The Board of Directors does not intend to bring any matters before the
meeting other than the matters specifically referred to in the notice of the
meeting, nor does the Board of Directors know of any matter which anyone else
proposes to present for action at the meeting. However, if any other matters
properly come before the meeting, the persons named in the accompanying proxy
or their duly constituted substitutes acting at the meeting will be deemed
authorized to vote or otherwise act thereon in accordance with their judgment
on such matters.
When your proxy card is returned properly signed, the shares represented
will be voted in accordance with your directions. In the absence of
instructions, the shares represented at the meeting by the enclosed proxy will
be voted "FOR" each of the nominees for the Board of Directors in the election
of directors and "FOR" each of the other proposals submitted to shareholders
in accordance with the foregoing notice of meeting and as set forth in this
Proxy Statement. Any proxy may be revoked at any time prior to its exercise by
notifying the Secretary in writing, by delivering a duly executed proxy
bearing a later date or by attending the meeting and voting in person.
Voting Electronically
Instead of submitting your vote by mail on the enclosed proxy card, the
Company's by-laws permit you to vote electronically via the Internet. Please
note that there are separate Internet voting arrangements depending on whether
shares registered in the Company's stock records are in your name or in the
name of a brokerage firm or bank.
The Internet voting procedures are designed to authenticate shareholders'
identities, to allow shareholders to vote their shares and to confirm that
their instructions have been properly recorded. Shareholders voting via the
Internet should understand that there may be costs associated with electronic
access, such as usage charges from Internet access providers and telephone
companies, that will be borne by the shareholder.
For Shares Registered Directly in the Name of the Shareholder
Shareholders with shares registered directly in their name in the Company's
stock records maintained by its transfer agent, EquiServe Trust Company, N.A.
("EquiServe"), may vote their shares (1) via the Internet at the following
address on the World Wide Web: http://www.eproxyvote.com/cmcsa, (2) by mailing
their signed proxy card, or (3) by attending the meeting and voting in person.
Specific instructions to be followed by registered shareholders are set forth
on the enclosed proxy card. Votes submitted via the Internet through EquiServe
as described herein must be received by 5:00 p.m. eastern time on June 21,
2000.5,
2001.
1
For Shares Registered in the Name of a Brokerage Firm or Bank
A number of brokerage firms and banks are participating in separate programs
that offer Internet voting options. Such programs are different from the
program provided by EquiServe for shares registered directly in the name of
the shareholder. If your shares are held in an account at a brokerage firm or
bank participating in any such program, you may vote those shares via the
Internet in accordance with instructions set forth on the voting form provided
to you by the brokerage firm or bank that holds your shares.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Outstanding Shares and Voting Rights
At the close of business on May 3, 2000,April 17, 2001, the record date, the Company had
outstanding [24,939,080]21,832,250 shares of Class A Common Stock, par value $1.00 per
share, [9,444,375]9,444,375 shares of Class B Common Stock, par value $1.00 per share,
and [840,221,601]913,785,165 shares of Class A Special Common Stock, par value $1.00 per
share. All share amounts in this Proxy Statement reflect the stock split in
the form of a dividend of one share of Class A Special Common Stock for each
share of Class A Common Stock, Class A Special Common Stock and Class B Common
Stock paid on May 5, 1999 to shareholders of record as of the close of
business on April 20, 1999.
On each matter voted upon at the meeting and any adjournment or postponement
thereof, the Class A Common Stock and Class B Common Stock will vote together.
Each record holder of Class A Common Stock will be entitled to one vote per
share and each record holder of Class B Common Stock will be entitled to
fifteen votes per share. Holders of Class A Special Common Stock shall not be
entitled to vote at the meeting. References to voting classes of the Company's
Common Stock herein shall not include the Class A Special Common Stock. In the
election of directors, holders of Class A Common Stock and Class B Common
Stock
shareholders shall not have cumulative voting rights.
The presence, in person or by proxy, of shareholders entitled to cast a
majority of the votes which shareholders are entitled to cast on each matter
to be voted upon at the meeting will constitute a quorum for the meeting. In
the event that the meeting is adjourned for one or more periods aggregating at
least fifteen days due to the absence of a quorum, those shareholders entitled
to vote who attend the adjourned meeting, although otherwise less than a
quorum as described in the preceding sentence, shall constitute a quorum for
the purpose of acting upon any matter set forth in the foregoing notice of the
meeting.
In the election of directors, the nineten nominees receiving a plurality of the
votes cast at the meeting shall be elected. Approval of all other proposals to
be submitted to shareholders in accordance with the foregoing notice of the
meeting and as set forth in this Proxy Statement requires the affirmative vote
of a majority of the votes cast at the meeting. For purposes of determining
the number of votes cast with respect to any voting matter, only those cast
"FOR," "AGAINST" or, in the case of the election of directors, "WITHHELD," are
included. Abstentions and broker non-votes are counted only for purposes of
determining whether a quorum is present at the meeting.
The holder of all of the Class B Common Stock has indicated that it will
vote all of its shares "FOR" each of the nominees for director listed below
and "FOR" each of the other proposals submitted to shareholders in accordance
with the foregoing notice of the meeting and as set forth in this Proxy
Statement. Consequently, the election of each of the nominees for director
listed below and the approval of each of the other proposals submitted to
shareholders in accordance with the foregoing notice of the meeting and as set
forth in this Proxy Statement are assured.
2
Principal Shareholders
The following table sets forth certain information regarding the holdings of
each shareholder who was known to the Company to be the beneficial owner, as
defined in Rule 13d-3 of the Securities Exchange Act of 1934 (the "Exchange
Act"), of more than 5% of any voting class of the Company's Common Stock
(Class A and Class B) as of February 29, 2000.28, 2001. So far as is known to the
Company, the persons named in the table below as beneficially owning the
shares set forth therein have sole voting power and sole investment power with
respect to such shares, unless otherwise indicated.
Amount Percent
Beneficially of
Title of Voting Beneficially of
Class Name and Address of Beneficial Owner Owned Class
------------------------------------ ------------------------------------ ------------ -------
Class A Common Stock Brian L. Roberts 138,269 0.6%(1)
1500 Market Street
Philadelphia, PA 19102-2148
Class B Common Stock Brian L. Roberts 9,444,375 100%(1)
1500 Market Street
Philadelphia, PA 19102-2148
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(1) As of February 29, 2000,28, 2001, Sural Corporation ("Sural"), a Delaware
corporation, was the sole owner of the Company's outstanding Class B
Common Stock and owned 136,913 shares of the Company's outstanding Class
A Common Stock. Mr. Brian L. Roberts, President of the Company, owns
stock representing substantially all of the voting power of all classes
of voting securities of Sural. Pursuant to Rule 13d-3 under the Exchange
Act, Mr. Brian L. Roberts is deemed to be the beneficial owner of the
shares of Class B Common Stock and Class A Common Stock owned by Sural,
and he is deemed to be the beneficial owner of 1,356 shares of Class A
Common Stock owned by his wife, as to which he disclaims beneficial
ownership. Since each share of Class B Common Stock is entitled to
fifteen votes, the shares of Class A Common Stock and Class B Common
Stock owned by Sural and Mr. Brian L. Roberts constituted as of February
29, 200028, 2001 approximately 85%87% of the voting power of the two classes of the
Company's voting Common Stock combined. The Class B Common Stock is
convertible on a share-for-
shareshare-for-share basis into Class A Common Stock or Class
A Special Common Stock. If Sural and Mr. Brian L. Roberts were to convert
the Class B Common Stock that they are deemed to beneficially own into
Class A Common Stock, Mr. Roberts would beneficially own 9,582,644 shares
of Class A Common Stock (approximately 27.9%30.6% of the Class A Common
Stock).
3
Security Ownership of Management
The following table sets forth certain information regarding the Class A
Common Stock (one vote per share) and the Class A Special Common Stock
(generally non-voting) beneficially owned by each director of the Company and
the nominee for election as a director at the meeting, by Mr. Ralph J. Roberts
(the "Chief Executive Officer," see note (12) below), by each of the Company's
other four most highly compensated executive officers during 19992000 and by all
the current directors, the director nominee, Mr. Decker Anstrom, and the
executive officers of the Company as a group, as of February 29, 2000.28, 2001. Each of
the persons named in the table below as beneficially owning the shares set
forth therein has sole voting power and sole investment power with respect to
such shares, unless otherwise indicated.
Amount Beneficially Percent Beneficiallyof
Owned(1) of Class(1)
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Class A Class A
Name of Beneficial Owner Class A Special Class A Special
- ------------------------ ------- ---------------- ------------- ------- -------
John R. Alchin(3)................... -- 585,587(4)858,203(4) (2) (2)
Gustave G. Amsterdam.... 25,269 185,369Decker Anstrom............... -- -- (2) (2)
Sheldon M. Bonovitz..... 16,523(5) 228,316(6)Bonovitz.......... 12,080(5) 212,334(6) (2) (2)
Julian A. Brodsky(3)............. 234,146(7) 3,267,338(8) (2)3,137,366(8) 1.1% (2)
Joseph L. Castle, II....II......... 375 33,56932,369 (2) (2)
Brian L. Roberts(3)(9)......... 138,269(10) 10,486,597(11)12,390,861(11) (2) 1.2%1.4%
Ralph J. Roberts(12).... 872,866(13) 6,480,647(14) 3.5%......... 809,120(13) 5,762,802(14) 3.7% (2)
Felix G. Rohatyn............. -- -- (2) (2)
Lawrence S. Smith(3)............. -- 256,328(15)350,915(15) (2) (2)
Bernard C. Watson.......Watson............ -- 54,00037,800 (2) (2)
Irving A. Wechsler...... 110,607 618,711Wechsler........... 98,581 592,427 (2) (2)
Anne Wexler.............Wexler.................. -- 44,70039,300 (2) (2)
All directors, the director
nominee and executive
officers as a group (12(15
persons)(3).. 1,438,946 22,630,857(4) 5.8%................. 1,333,132(5) 24,550,883(4)(6) 6.1% 2.7%
(5)(7)(10)(13) (6)(8)(11)(14)(15)(16)
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(1) With respect to each beneficial owner, the shares issuable upon exercise
of his or her currently exercisable options and options exercisable
within 60 days of February 29, 200028, 2001 are deemed to be outstanding for the
purpose of computing the percentage of the class of Common Stock owned.
Includes the following shares of Class A Special Common Stock for which
the named individuals, and all directors, the director nominee and
executive officers as a group, hold currently exercisable options or
options exercisable within 60 days of February 29, 2000:28, 2001: Mr. Alchin,
389,150 shares; Mr. Amsterdam,
10,800663,752 shares; Mr. Bonovitz, 43,20037,800 shares; Mr. Brodsky, 2,089,3011,988,834
shares; Mr. Castle, 28,20027,000 shares; Mr. Brian L. Roberts, 781,0962,695,045
shares; Mr. Ralph J. Roberts, 4,417,4973,754,147 shares; Mr. Smith, 138,230217,300
shares; Mr. Watson, 43,20037,800 shares; Mr. Wechsler, 43,20037,800 shares; Ms.
Wexler, 43,20037,800 shares; and all directors, the director nominee and
executive officers as a group, 8,340,52810,529,968 shares. Does not include the
following shares which were issuable under options exercised prior to
February 29, 2000,28, 2001, but the receipt of which was irrevocably deferred
pursuant to the Company's 1997 Deferred Stock Option Plan: Mr. Amsterdam, 39,006 shares; Mr. Bonovitz,
18,32926,537 shares; Mr. Brodsky, 789,3261,678,293 shares; Mr. Ralph J. Roberts,
2,921,5183,731,488 shares; and Mr. Wechsler, 13,39321,601 shares.
(2) Less than one percent of the applicable class.
(3) The following named executive officers also beneficially own shares of the
common stock of QVC, Inc., a 57%-owned subsidiary of the Company,
including shares issuable under options to purchase shares exercisable
within 60 days of February 29, 2000:28, 2001: Mr. Alchin, 2,0402,280 shares; Mr.
Brodsky, 2,7203,040 shares; Mr. Brian L. Roberts, 4,1606,240 shares; Mr. Smith,
2,1202,600 shares; and all directors, the director nominee and executive
officers as a group, 11,04014,160 shares. The number of shares of common stock
of QVC, Inc. beneficially owned by each of them, and by all directors,
the director
4
nominee and executive officers as a group, represents less than one
percent of the outstanding common stock of QVC, Inc.
4
(4) Includes 30 shares of Class A Special Common Stock owned in the Comcast
Corporation Retirement--Investment Plan, as to which shares he disclaims
beneficial ownership.
(5) Includes 4,4436,425 shares of Class A Common Stock held in trust or as a
custodian for his children, 6,425 shares owned by his wife and
2,636 shares held by him as trustee for a testamentary trust, as to all
of which shares he disclaims beneficial ownership.
(6) Includes 8,5684,498 shares of Class A Special Common Stock held in trust or as
a custodian for his children, 6,513 shares owned by his wife,
152,528112,528 shares held by him as trustee for a testamentary trust, 40,000
shares held by him as a trustee of grantor retained annuity trusts for
his mother-in-law, and 10,476 shares owned by a charitable foundation of
which his wife is a trustee, as to all of which shares he disclaims
beneficial ownership.
(7) Includes 15,000 shares of Class A Common Stock owned by a charitable
foundation of which he and members of his family are directors and
officers, and 88,178 shares owned by Swallow Drive Fund, L.P., a limited
partnership the general partner of which is controlled by Mr. Brodskyhim and his
wife, as to all of which shares he disclaims beneficial ownership.
(8) Includes 289,562 shares of Class A Special Common Stock owned by Swallow
Drive Fund, L.P., and 240,170 shares owned in a grantor retained annuity
trust, as to all of which shares he disclaims beneficial ownership. See
note (7) above.
(9) Pursuant to Rule 13d-3 of the Exchange Act, Mr. Brian L. Roberts is also
deemed to be the beneficial owner of all of the outstanding shares of
the Company's Class B Common Stock owned by Sural. See note (1) to the
table under the caption "Principal Shareholders."
(10) Includes 1,356 shares of Class A Common Stock owned by his wife, as to
which shares he disclaims beneficial ownership, and 136,913 shares of
Class A Common Stock owned
by Sural. See note (1) to the table under the caption "Principal
Shareholders."
(11) Includes 2,712 shares of Class A Special Common Stock owned by his wife
40,206and 40,621 shares owned in the Comcast Corporation Retirement--InvestmentRetirement--
Investment Plan, and 10,000 shares owned by a charitable foundation of which he and
his wife are directors and officers, as to all of which shares he disclaims beneficial
ownership. Also includes 9,581,288 shares owned by Sural, but does not
include additional shares of Class A Special Common Stock issuable upon
conversion of Class B Common Stock beneficially owned by Mr. Brian L.
Roberts. See note (1) to the table under the caption "Principal
Shareholders." If Sural and Mr. Brian L. Roberts were to convert the
Class B Common Stock that they are deemed to beneficially own into Class
A Special Common Stock, Mr. Brian L. Roberts would beneficially own
19,930,97221,835,236 shares of Class A Special Common Stock (approximately 2.3%2.4% of
the Class A Special Common Stock).
(12) The Company's by-laws do not provide for the position of "Chief
Executive Officer." For purposes of application of the proxy rules of
the Securities and Exchange Commission to this Proxy Statement, the
Company has determined that Mr. Ralph J. Roberts should be deemed to be
the Company's chief executive officer.
(13) Includes 570,813 shares of Class A Common Stock owned by a limited
partnership, the general partner of which is controlled by Mr. Ralph J.
Roberts.
(14) Includes 267,033192,033 shares of Class A Special Common Stock owned by a
charitable foundation of which he and his wife are trustees, as to which
shares he disclaims beneficial ownership, and 570,813 shares owned by a
limited partnership, the general partner of which is controlled by Mr.
Ralph J. Roberts.
(15) Includes 58,00036,355 shares of Class A Special Common Stock owned in a
grantor retained annuity trust, as to which shares he disclaims
beneficial ownership.
(16) Includes 3058 shares of Class A Special Common Stock owned by an executive
officer,officers, other than those named above, in the Comcast Corporation
Retirement--Investment Plan, as to which shares beneficial ownership is
disclaimed.
5
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than ten percent of a registered class
of the Company's equity securities (collectively, the "reporting persons") to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with copies of these reports.
Based on the Company's review of the copies of these reports received by it,
and written representations received from reporting persons, the Company
believes that all filings required to be made by the reporting persons for the
period January 1, 19992000 through December 31, 19992000 were made on a timely basis,
except for: one reportinformation regarding a disposition of shares of stock by Mr.
Bonovitz, a director of the Company, in connection with the exercisesales of shares of
stock options,by a trust for the benefit of his children, which sales should have been
reported on a Form 4 was inadvertentlyby February 10, 2000 but were reported on a Form 5 filed
late;on February 13, 2001; one report regarding a disposition of shares of stock by
Mr. Wechsler,Watson, a director of the Company, in connection with the exercise of stock options, for which a Form 4 was
inadvertently filed late; one report regarding a dispositionsale of shares
of stock, by Mr. Amsterdam, a director of the Company, in connection with the
exercise of stock options, for which a Form 4 was inadvertently filed late; and two reportsone report
regarding dispositionsthe holdings of Lawrence J. Salva, Senior Vice President and Chief
Accounting Officer of the Company, for which a Form 3 was inadvertently filed
late.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the meeting, the shareholders will elect ten directors to hold office for
the ensuing year and until their respective successors have been duly elected
and qualified. Should any one or more of these nominees become unavailable to
accept nomination or election as a director, the persons named in the enclosed
proxy will vote the shares which they represent for the election of stock bysuch other
persons as the Board of Directors may recommend, unless the Board of Directors
reduces the number of directors. Each of the nominees other than Mr. Smith,
ExecutiveAnstrom
currently is serving as a director of the Company.
The following sets forth certain information about each nominee:
Ralph J. Roberts, 81, has served as a director and Chairman of the Board of
Directors of the Company for more than five years. He is the President and a
director of Sural. Mr. Roberts devotes the major portion of his time to the
business and affairs of the Company. He is the father of Mr. Brian L. Roberts.
Mr. Roberts is also a director of Comcast Cable Communications, Inc.
Julian A. Brodsky, 67, has served as a director and Vice Chairman of the
Board of Directors of the Company for more than five years. He serves as
Treasurer and a director of Sural. Mr. Brodsky devotes a substantial portion
of his time to the business and affairs of the Company. He is also a director
of RBB Fund, Inc. and NDS Group plc.
Brian L. Roberts, 41, has served as President of the Company one reportand a director
for more than five years. He is a Vice President and a director of Sural. Mr.
Roberts devotes the major portion of his time to the business and affairs of
the Company. He is a son of Mr. Ralph J. Roberts. Mr. Roberts is also a
director of Comcast Cable Communications, Inc. and The Bank of New York
Company.
Decker Anstrom, 50, is a nominee for election as a director of the Company
at the meeting. Mr. Anstrom has been President and Chief Executive Officer of
The Weather Channel since 1999. Prior to 1999, Mr. Anstrom was President and
Chief Executive Officer of the National Cable Television Association ("NCTA")
in connectionWashington, D.C. for five years. He is currently a director of the NCTA and
the Cable TV Advertising Bureau.
6
Sheldon M. Bonovitz, 64, has been a director of the Company for more than
five years. Mr. Bonovitz has been a partner specializing in tax matters with
the exerciselaw firm of Duane, Morris & Heckscher LLP for more than five years and is
currently Chairman and Chief Executive Officer of that firm. Mr. Bonovitz is
also a director of Surgical Laser Technologies, Inc. and Premier Research
Worldwide, Ltd.
Joseph L. Castle, II, 68, has been a director of the Company for more than
five years. Mr. Castle has been, for more than five years, a financial
consultant and is the Chairman and Chief Executive Officer and a director of
Castle Energy Corporation, an independent oil and gas exploration and
production company. Mr. Castle is also a director of Charming Shoppes, Inc.
Felix G. Rohatyn, 72, was the United States Ambassador to France from
September 1997 to December 2000. Prior to 1997, Mr. Rohatyn was Managing
Director of Lazard Freres & Co. LLC, Investment Bankers, in New York, New York
for at least five years. Mr. Rohatyn is also a director of Fiat SpA.
Bernard C. Watson, 73, has been a director of the Company for more than five
years. From 1993 until his retirement in 1997, Dr. Watson was Chairman of the
Board of Directors of Health Management Alternatives Foundation. Prior to
1993, he had been President and Chief Executive Officer of the William Penn
Foundation for more than five years.
Irving A. Wechsler, 80, has been a director of the Company for more than
five years. Mr. Wechsler is currently of counsel in the firm of Wechsler,
Wolsh and Associates, Certified Public Accountants, in Pittsburgh,
Pennsylvania, where he had previously been a partner for more than five years.
Anne Wexler, 71, has been a director of the Company for more than five years
and has been for more than five years Chairman of the Wexler Group, a
consulting firm specializing in government relations and public affairs, which
is an operating unit of Hill and Knowlton Public Affairs Worldwide. Ms. Wexler
is also a director of seventeen individual funds of The Dreyfus Corporation
complex of mutual funds, and a director of National Grid USA, Wilshire Mutual
Funds, Inc. and Methanex Corporation.
Committees and Meetings of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee. The Compensation Committee
has a Subcommittee on Performance-Based Compensation.
Messrs. Bonovitz, Castle, Brian L. Roberts and Ralph J. Roberts (Chair)
serve as members of the Executive Committee. The Executive Committee held five
meetings during 2000. The Executive Committee acts for the directors in the
intervals between meetings of the Board of Directors.
Messrs. Bonovitz, Castle and Wechsler (Chair) serve as members of the Audit
Committee. The Audit Committee held eight meetings during 2000. The Audit
Committee meets with the Company's independent public accountants, counsel,
internal audit department and management to discuss the scope and results of
the annual audit, internal accounting procedures and certain other questions
of accounting policy, as more fully described in the Audit Committee Charter
attached as Annex A to this Proxy Statement and set forth in the Report of the
Audit Committee presented under Proposal Two below.
Messrs. Castle and Watson serve as members of the Subcommittee on
Performance-Based Compensation of the Compensation Committee (the
"Compensation Subcommittee"). The Compensation Subcommittee held four meetings
during 2000. The Compensation Subcommittee's functions include responsibility
for the Company's stock optionsoption, restricted stock and bonus plans,
7
establishing performance-based criteria and goals for compensation to senior
executive officers, and approving certain agreements with the Chief Executive
Officer and Mr. Brian L. Roberts. Messrs. Bonovitz, Castle and Watson serve as
members of the Compensation Committee, which considers and determines all
other compensation matters relating to the Company's executive officers. The
Compensation Committee held four meetings during 2000, in conjunction with
meetings of the Compensation Subcommittee.
Ms. Wexler (Chair) and Messrs. Castle and Watson serve as members of the
Nominating Committee. The Nominating Committee held two meetings during 2000.
The Nominating Committee reviews the size and composition of the Board of
Directors and is responsible for recommending nominees to serve on the Board
of Directors. In carrying out its responsibilities, the Nominating Committee
will consider candidates recommended by other directors, employees and
shareholders. Written suggestions for candidates to serve as directors if
nominated and elected should be sent to the President of the Company at
Comcast Corporation, 1500 Market Street, Philadelphia, Pennsylvania 19102-
2148. The Company's by-laws require that written notice of the intent to make
a nomination at a meeting of shareholders must be received by the President of
the Company (a) with respect to an election to be held at an annual meeting,
not less than 90 days in advance of the date which is the one reportyear anniversary
of the prior year's annual meeting of shareholders, and (b) with respect to an
election to be held at a special meeting, the close of business on the seventh
day following the day on which notice of a special meeting of shareholders for
the election of directors is given to shareholders. The notice must contain:
(a) the name and address of the shareholder who intends to make the nomination
and of the person or persons to be nominated; (b) a representation that the
shareholder is a holder of record of the Company's stock entitled to vote at
the meeting and intends to appear in connectionperson or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the shareholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the shareholder; (d)
such other information regarding each nominee proposed by such shareholder as
would have been required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission had each nominee
been nominated, or intended to be nominated, by the Board of Directors; and
(e) the consent of each nominee to serve as a director of the Company if so
elected.
The Board of Directors held five meetings in 2000. No member of the Board of
Directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by
all committees of the Board of Directors on which such director served.
Compensation of Directors
Each member of the Board of Directors who is not an employee of the Company
(a "non-employee director") receives an annual fee of $35,000, plus $2,000 for
each meeting of the Board of Directors attended and $1,000 for each meeting of
any committee of the Board of Directors attended which is not held in
conjunction with a giftmeeting of the Board of Directors. In addition, any non-
employee director who serves as the chair of a committee of the Board of
Directors receives an annual fee of $1,000. Each director is also reimbursed
for incidental travel expenses for meetings attended.
The Comcast Corporation 1996 Stock Option Plan (the "1996 Stock Option
Plan") provides that each non-employee director will be granted annually, on
each February 1, an option to purchase 5,400 shares of Class A Special Common
Stock (except that the first such grant to a new non-employee director will be
an option to purchase 9,000 shares) at an exercise price per share equal to
the fair market value of a share of Class A Special Common Stock on the date
of grant. Each such option becomes exercisable six months after the date of
grant and generally expires five years from the date
8
of grant. Effective January 1, 1999, a non-employee director of the Company
may not sell shares of the Company's common stock unless, subsequent thereto,
such director owns shares of the Company's common stock with a value at least
equal to five times their base annual compensation from the Company. See
"Report on Executive Compensation--Equity Ownership Policy."
Certain Related Party Transactions
Mr. Bonovitz, a director of the Company, is Chairman and Chief Executive
Officer of the law firm of Duane, Morris & Heckscher LLP, which provides
services to the Company from time to time. In 2000, total fees paid to Duane,
Morris & Heckscher LLP by the Company were $362,170.
Compensation Committee Interlocks and Insider Participation
Mr. Bonovitz, a member of the Compensation Committee, is Chairman and Chief
Executive Officer of the law firm of Duane, Morris & Heckscher LLP, which
provides services to the Company from time to time. Mr. Bonovitz is not a
member of the Compensation Subcommittee, which, during 2000, performed
substantially all functions of the Compensation Committee with respect to
senior executives of the Company, including administration of the Company's
stock option and restricted stock plans, the bonus plans applicable to senior
executives of the Company, and approval of all agreements with the Chief
Executive Officer, Mr. Brian L. Roberts and others.
PROPOSAL TWO
TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
appointed the firm of Deloitte & Touche LLP, which served as the Company's
independent auditors for eachthe last fiscal year, to serve as the Company's
independent auditors with respect to the consolidated financial statements of
which transactionsthe Company for 2001. The Board of Directors has determined to request the
shareholders to ratify such appointment, although shareholder ratification is
not required. A representative of Deloitte & Touche LLP is expected to be
present at the meeting and will have the opportunity to make a Form 4 was inadvertently filed late.
6
EXECUTIVE COMPENSATION
Summary Compensation Tablestatement if he
or she desires to do so. The representative is also expected to be available
to respond to appropriate questions of shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
The following table sets forth the fees incurred by the Company for the
services of Deloitte & Touche LLP, the member firms of Deloitte Touche
Tohmatsu and their respective affiliates in 2000.
Financial Information Systems
Audit Fees Design and Implementation Fees All Other Fees
---------- ------------------------------ --------------
$1.8 million -- $3.3 million
Report of the Audit Committee
The Audit Committee of the Board of Directors (the "Audit Committee") is
composed entirely of independent directors as defined in the listing standards
of the National Association of Securities Dealers. The key responsibilities of
the Audit Committee are set forth in its Charter, adopted on May 1, 2000,
which is included as Annex A to this Proxy Statement.
The Audit Committee serves in an oversight capacity and is not intended to
be part of the Company's operational or managerial decision-making process.
The Company's management is
9
responsible for preparing the Company's consolidated financial statements and
its independent auditors are responsible for auditing the consolidated
financial statements. The principal purpose of the Audit Committee is to
monitor these processes.
In this context, the Audit Committee met and held discussions with
management and the independent auditors. Management represented to the Audit
Committee that the Company's consolidated financial statements were prepared
in accordance with generally accepted accounting principles applied on a
consistent basis, and the Audit Committee has reviewed and discussed the
consolidated financial statements with management and the independent
auditors. The Audit Committee discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
("Communication With Audit Committees"), as amended.
The Audit Committee discussed with the independent auditors the auditors'
independence from the Company and its management, including the matters in the
written disclosures required by the Independence Standards Board Standard No.
1 ("Independence Discussions With Audit Committees"). The Audit Committee has
also considered whether the independent auditors' provision of non-audit
related services to the Company is compatible with the auditors' independence.
The Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee met with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, the
evaluations of the Company's internal controls and the overall quality of the
Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board has approved,
that the audited financial statements be included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, for filing with the
Securities and Exchange Commission. The Audit Committee has recommended and
the Board has approved, subject to shareholder ratification, the selection of
the Company's independent auditors.
Members of the Audit Committee
Irving A. Wechsler (Chair)
Sheldon M. Bonovitz
Joseph L. Castle, II
10
PROPOSAL THREE
TO APPROVE THE ADOPTION OF THE
COMCAST CORPORATION 2001 EMPLOYEE STOCK PURCHASE PLAN
On December 20, 2000, the Board of Directors of the Company adopted the
Comcast Corporation 2001 Employee Stock Purchase Plan (the "Stock Purchase
Plan"). The Stock Purchase Plan is intended to meet the requirements of
Section 423 of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"). Participants in a plan which meets the requirements of Section
423 of the Internal Revenue Code enjoy certain tax advantages, as described
below. In order for the Stock Purchase Plan to be qualified, it must be
approved by the Company's shareholders.
The Stock Purchase Plan allows eligible employees to purchase shares of the
Company's Class A Special Common Stock at a discount without being subject to
tax until they sell the stock and without having to pay any brokerage
commissions with respect to the purchases.
The purpose of the Stock Purchase Plan is to encourage the purchase of Class
A Special Common Stock by the Company's employees and the employees of the
subsidiaries of the Company whose participation is approved by the Board of
Directors, to provide employees with a personal stake in the Company and to
help recruit and retain employees. It is currently expected that only
employees of the Company and its wholly-owned subsidiaries Comcast Cable
Communications, Inc. and its subsidiaries and Comcast Online Communications,
Inc. will participate in the Stock Purchase Plan.
Provided that the Company's adoption of the Stock Purchase Plan is approved
by the Company's shareholders, the first offering period under the Stock
Purchase Plan will commence on the date determined by the Board of Directors
or the Compensation Subcommittee.
Description of the Stock Purchase Plan
The Stock Purchase Plan provides employees with the right to purchase shares
of Class A Special Common Stock through payroll deductions. A total of
4,250,000 shares of Class A Special Common Stock are available for purchase
under the Stock Purchase Plan, subject to adjustment in the number and price
of shares available for purchase if the number of outstanding shares of Class
A Special Common Stock are increased or decreased through stock dividends,
recapitalizations, stock splits, reorganizations or similar changes.
Administration
The Stock Purchase Plan is administered by the Compensation Subcommittee.
Subject to the terms of the Stock Purchase Plan, the Board of Directors and
the Compensation Subcommittee have authority to interpret the Stock Purchase
Plan, prescribe, amend and rescind rules and regulations relating to it and
make all other determinations deemed necessary or advisable in administering
the Stock Purchase Plan.
Eligibility and Participation
A full-time employee is eligible to participate in the Stock Purchase Plan
if he or she has been continuously employed for a 90-day period as of the
first day of an offering period. A part-time employee is eligible to
participate in the Stock Purchase Plan if he or she has been continuously
employed for one year as of the first day of an offering period. An employee
is considered to be a part-time employee if he or she is scheduled to work
less than 20 hours per week. If the Stock Purchase Plan had been effective as
of December 31, 2000, approximately 16,500 employees, including the
11
Company's executive officers other than the Chief Executive Officer and Mr.
Brian L. Roberts, would have been eligible to participate in the Stock
Purchase Plan.
Any eligible employee who, after purchasing shares of Class A Special Common
Stock under the Stock Purchase Plan, would own 5% or more of the total
combined voting power or value of all classes of stock of the Company or any
subsidiary corporation is not eligible to purchase additional stock under the
Stock Purchase Plan. Ownership of stock is determined in accordance with the
provisions of Section 424(d) of the Internal Revenue Code. In addition, under
the Stock Purchase Plan, the maximum fair market value of Class A Special
Common Stock an eligible employee may purchase in a calendar year is limited
to $25,000.
Shares of Class A Special Common Stock will be available under the Stock
Purchase Plan during each offering period. The offering period will generally
be the calendar quarter. Eligible employees may elect to participate in the
Stock Purchase Plan before the start of an offering period. Shares of Class A
Special Common Stock will be deemed to have been purchased on the last three fiscalday of
the offering period. The purchase price per share will be 85 percent of the
lesser of the fair market value per share of Class A Special Common Stock on
the first day of the offering period (or, if such date is not a trading day,
then on the next trading day thereafter) or the fair market value per share of
Class A Special Common Stock on the last day of the offering period (or, if
such date is not a trading day, then on the trading day immediately
preceding).
The purchase price may also be discounted by some lesser amount than
determined above. The Board of Directors or the Compensation Subcommittee will
determine, with respect to any offering period, the amount, if any, by which
the purchase price will be discounted.
To become a participant in the Stock Purchase Plan (for purposes of this
Proposal Three, a "Participant"), an eligible employee who wishes to
participate in the Stock Purchase Plan must file an election form at least 15
days before the beginning of an offering period. Each Participant will have
payroll deductions of not more than 10% of his or her compensation made on
each regular payday during the time he or she is a Participant in the Stock
Purchase Plan, subject to an annual limit of $10,000. All payroll deductions
will be credited to the Participant's account under the Stock Purchase Plan.
If the total number of shares of Class A Special Common Stock for which
purchase rights are exercised at the end of an offering period exceeds the
maximum number of shares of Class A Special Common Stock available, the Board
of Directors or the Compensation Subcommittee will make a pro rata allocation
of shares available for delivery and distribution. The unapplied account
balances will be credited to Participants' accounts for the next succeeding
offering or, at the Participant's election, returned to the Participant,
without interest, as soon as practicable following the end of the offering
period.
Termination of Participation
A Participant may discontinue his or her participation in the Stock Purchase
Plan at any time, but no other change can be made during an offering period. A
Participant may change the amount of payroll deductions for subsequent
offerings by giving written notice of such change on or before the 15th day of
the month immediately preceding the beginning of an offering period.
A Participant may elect to withdraw all, but not less than all, of the
balance credited to the Participant's account by providing a termination form
at any time before the end of the offering period. All amounts credited to
such Participant's account shall be paid as soon as practicable following
receipt
12
of the Participant's termination form, and no further payroll deductions will
be made with respect to the Participant. A Participant who elects to withdraw
from an offering period will not be eligible to participate in the offering
period next following the date on which the Participant delivered a
termination form.
If a Participant's employment terminates for any reason other than death,
all amounts credited to such Participant's account will be delivered to the
Participant. If a Participant's employment terminates due to death or the
Participant dies after termination of employment but before the Participant's
account has been returned, all amounts credited to such Participant's account
will be delivered to the Participant's successor-in-interest. A Participant
who is on an approved leave of absence will remain eligible to participate in
the Stock Purchase Plan through the end of the offering period that commenced
prior to such leave, unless the approved leave of absence ends and the
Participant does not return to active employment prior to the end of that
offering period.
Method of Share Purchase
All funds held or received by the Company under the Stock Purchase Plan may
be used for any corporate purpose until applied to the purchase of Class A
Special Common Stock or refunded to employees and shall not be segregated from
the Company's general assets. Shares of Class A Special Common Stock purchased
under the Stock Purchase Plan will be issued from the Company's treasury
shares or from authorized but unissued shares. The Company will pay all fees
and expenses incurred, excluding individual federal, state, local or other
taxes, in connection with the Stock Purchase Plan.
Transfers of Interests
An employee's rights under the Stock Purchase Plan belong to the employee
alone and may not be transferred or assigned to any other person during the
employee's lifetime. After shares of Class A Special Common Stock have been
issued under the Stock Purchase Plan and credited to an employee's brokerage
account under the Stock Purchase Plan, such shares may be assigned or
transferred the same as any other shares.
Federal Income Taxation
The Stock Purchase Plan is not qualified under Section 401(a) of the
Internal Revenue Code. The Company generally will not be entitled to a
deduction with respect to stock purchased under the Stock Purchase Plan,
unless the stock is disposed of less than one year after it is purchased by
the employee, or less than two years certain information concerningafter the start of the offering period
pursuant to which the stock was purchased.
Generally, no tax consequences arise at the time the Participant purchases
shares of Class A Special Common Stock under the Stock Purchase Plan. In
general, upon a disposition of shares, the Participant will receive
compensation taxable as ordinary income for the taxable year in which the
disposition occurs in an amount equal to the lesser of the excess of the fair
market value over the purchase price value of the shares at the beginning of
the offering period or the excess over the purchase price of (a) the amount
actually received for the shares if sold or exchanged or (b) the fair market
value of the shares on the date of any other termination of his or her
ownership (such as by gift). The amount of such ordinary income is then added
to the Participant's basis in his or her shares for purposes of determining
capital gain or loss. This tax treatment only applies if the Participant does
not dispose of the shares for at least one year after the date of purchase and
the Participant does not dispose of the shares for at least two years after
the beginning of the offering period pursuant to which the shares were
purchased.
If a Participant disposes of shares of Class A Special Common Stock
purchased under the Stock Purchase Plan before the holding period is
satisfied, he or she will receive compensation taxable as ordinary income in
the amount of the difference between the amount paid for the shares and the
fair market value of the shares at the time of purchase. If the shares are
sold or exchanged, the amount of
13
such ordinary income is added to the Participant's basis in his or her shares
for purposes of determining capital gain or loss.
If a Participant dies before disposing of the shares purchased under the
Stock Purchase Plan, he or she will be deemed to have realized compensation
income taxable as ordinary income in the taxable year closing with his or her
death in an amount equal to the lesser of the excess of the fair market value
over the purchase price value of the shares at the beginning of the offering
period or the excess over the purchase price of the fair market value of the
shares on the date of death. The Participant is deemed not to have realized
any capital gain or loss because of death.
Amendment or Termination of the Plan
The Board of Directors or the Compensation Subcommittee has the right to
amend, modify or terminate the Stock Purchase Plan at any time without notice,
provided that, upon any termination, all shares or unapplied payroll
deductions will be distributed to Participants, and provided further, that no
amendment will affect the right of a Participant to receive his or her
proportionate interest in the shares or unapplied payroll deductions. Upon any
amendment of the Stock Purchase Plan, shareholder approval will be obtained if
required by law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE ADOPTION OF THE COMCAST CORPORATION 2001 EMPLOYEE STOCK
PURCHASE PLAN.
PROPOSAL FOUR
TO APPROVE AN AMENDMENT TO THE COMCAST CORPORATION 1996 EXECUTIVE CASH BONUS
PLAN
The Comcast Corporation 1996 Executive Cash Bonus Plan (the "Executive Cash
Bonus Plan"), which is described below under the heading "Description of the
Executive Cash Bonus Plan," is the annual and long-term compensation, as well
as other compensation paidcash bonus plan applicable to or for the
Chief Executive Officer and each of the Company's other four most highly
compensated executive officers (the "named executive officers"):
Long-Term
Compensation All Other
Annual Compensation Awards Compensation
---------------------------------- ------------ (Principally
Number of Split-Dollar
Other Annual Securities Insurance
Bonus Compensation Underlying Benefits)
Name and Principal Position(1) Year Salary($) ($)(2) ($)(3) Options(#) ($)(4)
- ------------------------------ ---- ---------- ---------- ------------ ------------ ------------
Ralph J. Roberts......... 1999 $1,050,000 $ 525,000 $2,279,829 250,000(6) $9,109,062
Chairman of the 1998 1,000,000 500,000 1,998,687(5) 1,134,610(6) 7,369,463
Board of Directors 1997 870,185 -- 1,387,050(5) 117,738(6) 5,625,776
Julian A. Brodsky........ 1999 $ 723,516 $ 361,758 $ 25,252 60,000(6) $ 918,136
Vice Chairman of 1998 689,063 344,532 23,409 605,000(6) 973,578
the Board of Directors 1,600(7)
1997 656,250 328,125 26,483 105,000(6) 1,067,761
Brian L. Roberts......... 1999 $1,000,000 $1,662,000 $ 360,643 4,000,000(6) $ 224,203
President 2,600(7)
1998 689,063 713,250 278,398 3,169,610(6) 222,026
7,800(7)
1997 656,250 687,000 42,883 160,160(6) 33,859
5,000(7)
Lawrence S. Smith........ 1999 $ 723,516 $ 431,440 $ 3,496 100,000(6) $ 32,261
Executive Vice President 1998 689,063 413,800 3,257 705,000(6) 30,361
2,200(7)
1997 656,250 397,000 10,452 105,000(6) 34,899
200(7)
John R. Alchin........... 1999 $ 608,753 $ 332,877 $ 31,799 75,000(6) $ 35,460
Executive Vice President 1998 579,813 318,407 48,411 587,500(6) 33,670
and Treasurer 1,200(7)
1997 552,250 304,625 17,984 87,500(6) 37,845
- --------
(1) The Company's by-laws do not provide for and nine
additional employees, three of whom are executive officers. Upon the position of "Chief Executive
Officer." For purposes of applicationapproval
by the shareholders of the proxy rules ofamendment to the Securities
and Exchange Commission to this Proxy Statement, the Company has
determined that Mr. Ralph J. Roberts should be deemed to be the Company's
chief executive officer.
(2) The amounts in this column include bonuses earned by the named persons
under the Company's 1996 Executive Cash Bonus Plan, bonuses paid to the
named persons (except Messrs. Ralph J. Roberts and Brodsky) in 1999, 1998
and 1997 relating to terminationterm of the Company's discretionary bonus plan
(see "Report on Executive Cash Bonus Plan will be extended through calendar year
2006.
The Compensation Subcommittee, which administers the Executive Cash Bonus
Plan, determined that the extension of the Compensation Committee's
Subcommittee on Performance-Based Compensation--EffectExecutive Cash Bonus Plan was
advisable and noted that the Company is obligated to pay cash bonuses through
the year 2006 under the terms of certain employment agreements with executive
officers. See "Executive Compensation--Agreements with Executive Officers"
below. None of the senior executives eligible under the amended Executive Cash
Bonus Plan will be entitled to receive additional benefits in excess of the
benefits he would receive under the unamended Executive Cash Bonus Plan.
Section 162(m) of the Internal Revenue Code Section 162(m)"), and guaranteed bonuses of $137,812 and $131,250,
paid to Mr. Brian L. Robertsrequires that plans such as the
Executive Cash Bonus Plan be reapproved by shareholders no less frequently
than every five years. The Executive Cash Bonus Plan was approved by
shareholders in 1998 and 1997 respectively, and $5,788,
$5,512 and $5,250, paid to Mr. Smith in 1999, 1998 and 1997, respectively.
(3) This column includes Company payments to the named executive officers to
cover their tax liabilities incurred in connection with: (a) local taxes
on stock option grants or exercises;
7
(b) Company payments to Messrs. Ralph J. Roberts, Brodsky and Brian L.
Roberts to cover the premiums attributable to the term life insurance
portion of split-dollar life insurance policies or separate term life
insurance policies (see note (4)(b) below); (c) Company payments to cover
premiums attributable to the executive long-term disability plan (see note
(4)(e) below); and (d) other incidental taxable fringe benefits provided to
the named executive officers. Such amounts are calculated based upon the
amount of tax payable by the executive officers in accordance with the
highest individual income tax bracket.
(4) The amounts shown in this column principally represent benefits associated
with split-dollar life insurance arrangements. In accordance with the
terms of the split-dollar life insurance arrangements, the Company will
recover all of the cumulative premiums paid by the Company for the whole-
life portion of such policies. This column includes (with respect to
amounts applicable to 1999): (a) the dollar value, on a term loan
approach, of the benefit of the whole-life portion of the premiums for
split-dollar life insurance policies paid by the Company projected on an
actuarial basis (Mr. Ralph J. Roberts $7,833,061; Mr. Brodsky $890,012;
Mr. Brian L. Roberts $22,830; Mr. Smith $22,278; and Mr. Alchin $21,332),
although the Company believes that a more realistic determination of the
economic value of the benefit would be based on an approach which
calculates the time value of money (using the applicable short-term
federal funds rate) of the premiums paid by the Company through 1999 (Mr.
Ralph J. Roberts $4,800,720; Mr. Brodsky $534,712; Mr. Brian L. Roberts
$16,711; Mr. Smith $20,697; and Mr. Alchin $20,541); (b) Company payments
to named executive officers to cover the premiums attributable to the term
life insurance portion of split-dollar life insurance policies or separate
term life insurance policies (Mr. Ralph J. Roberts $1,270,401; Mr. Brodsky
$18,009; Mr. Brian L. Roberts $190,689; Mr. Smith $1,745; and
Mr. Alchin $1,610); (c) Company contributions to its 401(k) Retirement--
Investment Plan in the amount of $5,600 for each of the named executive
officers; (d) Company payments to its long-term disability plan in the
amount of $980 for each of the named executive officers (other than
Mr. Ralph J. Roberts, who did not participate in such plan); and (e)
Company payments to the named executive officers (other than Mr. Ralph J.
Roberts, who did not participate in such plan) to cover the premiums
attributable to the executive long-term disability plan (Mr. Brodsky
$3,535; Mr. Brian L. Roberts $4,104; Mr. Smith $1,658; and Mr. Alchin
$5,938).
(5) Also includes $15,379 and $33,581 paid to him to cover the taxes payable
by him with respect to estateplan years 1996-2000, and succession planning services provided to
himthe extension
of the Executive Cash Bonus Plan through the 2003 plan year was approved by
shareholders in 1999. The Compensation Subcommittee and the Company in 1998 and 1997, respectively.
(6) Representsbelieve
that the number of shares ofExecutive Cash Bonus Plan is extremely useful as the Company's
Class A Special Common
Stock issuable upon exerciseprincipal means of options.
(7) Represents the number of shares of the common stock of QVC, Inc., a 57%-
owned non-public subsidiary of the Company, issuable upon exercise of: (a)
options grantedproviding cash incentive bonus compensation to the named executive officers by the Compensation
Committee of the QVC, Inc. Board of Directors on November 28, 1997, April
30, 1998 or July 7, 1999 pursuant to the 1995 QVC Stock Option and Stock
Appreciation Rights Plan (the "1995 QVC Plan") (except for options to
purchase 800 shares granted to Mr. Smith on July 7, 1998, and options to
purchase 4,600 shares granted to Mr. Brian L. Roberts on October 26,
1998); and (b) options granted April 18, 1996, assigned by the Company to
Mr. Brian L. Roberts on December 18, 1997. Such options were issued with
tandem stock appreciation rights exercisable in lieu of the options for
75% of the excess of the value of the QVC, Inc. common stock (as
determined pursuant to the 1995 QVC Plan) over the exercise price of such
options. Such options have an exercise price per share of $865.47 (for
options granted July 7, 1999), $651.84 (for options granted July 7 and
October 26, 1998), $688.14 (for options granted November 28, 1997 and
April 30, 1998), or $177.05 (for options granted April 18, 1996),
representing the value of the shares underlying such options on the date
of grant as determined pursuant to the 1995 QVC Plan, and such options
vest 20% on each of the first five anniversaries of the date of grant
(except for the options granted April 18, 1996, which vest 20%
8
on grant and 20% on each January 1, 1997-2000), based on the named
executive's continued service to the Company. In all cases, vesting is
accelerated upon a change of control of QVC, Inc. The QVC, Inc. options
expire ten years after the date of grant. The estimated present value of
QVC, Inc. stock options at the date of grant which were granted in 1999 to
Mr. Brian L. Roberts is $956,332 and is calculated using the Black-Scholes
option pricing model, based upon the following assumptions used in
developing the grant valuation: an expected volatility of approximately
20.0%; an expected term to exercise of eight years; an interest rate of
approximately 6.1%; and no dividend yield. The actual value of the options,
if any, realized by Mr. Brian L. Roberts will depend on the extent to which
the market value of the common stock of QVC, Inc. exceeds the exercise
price of the option on the date the option is exercised. Consequently,
there is no assurance that the value realized by Mr. Brian L. Roberts will
be at or near the value estimated above. During 1999, such executive
officers exercised certain of such options to purchase shares of QVC, Inc.
common stock and realized value upon such exercises as follows: Mr.
Brodsky, 800 shares, $550,736; Mr. Brian L. Roberts, 4,160 shares,
$1,778,355; Mr. Smith, 800 shares, $451,792; and Mr. Alchin, 600 shares,
$413,052. At December 31, 1999, the excess of the fair market value of QVC,
Inc. common stock over the exercise price for options outstanding based
upon the most recent valuation date was as follows: Mr. Brodsky ($125,715
exercisable, $1,226,021 unexercisable); Mr. Brian L. Roberts ($0
exercisable, $5,495,678 unexercisable); Mr. Smith ($210,095 exercisable,
$1,484,969 unexercisable); and Mr. Alchin ($94,286 exercisable, $919,516
unexercisable).
9
Stock Option Grants
The following table contains information concerning grants of stock options
under the Company's 1996 Stock Option Plan to the Chief Executive Officer and
to each of the Company's other four most highly compensated executive officers
during 1999. No Comcast Corporation stock appreciation rights ("SARs") were
granted during 1999 to the Chief Executive Officer or to any of the Company's
other four most highly compensated executive officers.
Stock Option Grants in 1999
Individual Grants(1)
-------------------------------------------------------------------
% of
Total
Number of Options
Securities Granted
Underlying to Exercise
Options Employees Price Expiration Grant Date
Name Granted(#) in 1999 ($/Sh) Dates Present Value (2)
- ---- ---------- --------- --------- ---------- -----------------
Ralph J. Roberts........ 2,790(3) * $36.1281 05/03/04 $ 34,289
247,210 3.4% 32.8437 05/03/09 4,264,373
Julian A. Brodsky....... 60,000 * $32.8437 05/03/09 1,035,000
Brian L. Roberts(4)..... 3,094(3) * $32.5875 01/05/04 $ 33,230
996,906 13.6% 29.6250 01/05/09 15,043,312
1,000,000 13.6 31.6875 04/05/09 16,610,000
1,000,000 13.6 32.8437 05/03/09 17,250,000
2,338(3) * 42.7625 10/04/04 34,228
997,662 13.6 38.8750 10/04/09 20,611,697
Lawrence S. Smith....... 100,000 1.4% $32.8437 05/03/09 1,725,000
John R. Alchin.......... 75,000 1.0% $32.8437 05/03/09 1,293,750
- --------
* Less than one percent of total options granted to employees in 1999.
(1) All of the options are for the purchase of shares of Class A Special
Common Stock and were granted on either January 5, April 5, May 3, or
October 4, 1999 under the Company's 1996 Stock Option Plan. Except as
described in note (3) below, all options granted in 1999 have exercise
prices equal to their fair market value on the date of grant and generally
become exercisable at the rate of 40% of the shares covered thereby on the
second anniversary of the date of grant, and 20% each on the third, fourth
and fifth anniversaries of the date of grant, or, as to 50% of the excess
of the options granted on May 3, 1999 to each of Messrs. Brodsky, Smith
and Alchin over options to purchase 7,500 shares, at the rate of 20% of
the shares covered thereby on the second anniversary of the date of grant,
another 10% on each of the third through ninth anniversaries of the date
of grant, and 10% six months prior to the tenth anniversary of the date of
grant. The options that expire on January 5, 2004, May 3, 2004 and October
4, 2004, as well as 3,044 of the options granted to each of Messrs.
Brodsky, Smith and Alchin expiring May 3, 2009, are incentive stock
options. All other options granted are nonqualified stock options.
(2) These amounts represent the estimated present value of stock options at
the date of grant calculated using the Black-Scholes option pricing model,
based upon the following assumptions used in developing the grant
valuations: an expected volatility of approximately 35.9%; an expected
term to exercise of eight years, except for certain incentive stock
options granted to Messrs. Ralph J. Roberts and Brian L. Roberts, for
which the expected term to exercise is five years; an interest rate of
approximately 5.5%; and no dividend yield. The actual value of the
options, if any, realized by an executive officer will depend on the
extent to which the market value of the Class A Special Common Stock
exceeds the exercise price of the option on the date the option is
exercised. Consequently, there is no assurance that the value realized by
an executive officer will be at or near the value estimated above. These
amounts should not be used to predict stock performance.
10
(3) In accordance with the tax rules governing incentive stock options, these
options were granted at an exercise price equal to 110% of the fair market
value on the date of grant. The options to purchase shares of the
Company's Class A Special Common Stock become exercisable at the rate of
40% of the shares covered thereby on the second anniversary of the date of
grant, another 20% on each of the third and fourth anniversaries of the
date of grant, and another 20% six months prior to the fifth anniversary
of the date of grant.
(4) In addition to the options described above, options to purchase 2,600
shares of the common stock of QVC, Inc. at an exercise price of $865.47
per share were granted to Mr. Brian L. Roberts on July 7, 1999. See note
(7) under "Executive Compensation--Summary Compensation Table."
Stock Option Exercises and Holdings
The following table sets forth information related to options exercised
during 1999 by the Chief Executive Officer and each of the Company's other
four most highly compensated executive officers during 1999, and the number
and value of options or SARs held at December 31, 1999 by such individuals.
Aggregated Option Exercises in 1999 and Option Values at December 31, 1999
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares December 31, 1999(#) December 31, 1999($)
Acquired on Value ------------------------- --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ------------ -------------
Ralph J. Roberts
Class A Special
Common Stock.......... 2,921,518(1) (1) 5,570,892 1,453,770 $239,251,400 $ 45,672,619
Julian A. Brodsky(2)
Class A Special Common
Stock.................. 807,785(3) $ 942,947(3) 1,877,369 1,541,258 $ 80,763,349 $ 58,628,474
Brian L. Roberts(2)
Class A Special Common
Stock.................. 550,927 $17,260,219 555,005 8,413,977 $ 22,801,962 $228,501,217
Lawrence S. Smith(2)
Class A Special Common
Stock.................. 340,180 $ 9,218,896 159,992 1,523,314 $ 6,499,126 $ 56,271,872
John R. Alchin(2)
Class A Special
Common Stock.......... 215,706 $ 6,799,848 292,814 1,226,256 $ 12,165,881 $ 45,269,963
- --------
(1) Represents 2,921,518 shares of Class A Special Common Stock to be issued
to Mr. Ralph J. Roberts which were credited to his account. The receipt of
such shares has been deferred until July 2002 pursuant to the Company's
1997 Deferred Stock Option Plan (the "Deferred Stock Option Plan"),
resulting from the net exercise on February 12, 1999 of options to
purchase 1,991,556 shares at an exercise price of $3.1111 per share and
options to purchase 1,644,204 shares at an exercise price of $9.5625 per
share, net of 75,446 shares withheld to satisfy certain tax obligations.
The fair market value of such shares on such date was $34.3125 per share.
The value ultimately realized with respect to such shares will be
determined based upon the fair market value of such shares upon their
issuance to Mr. Ralph J. Roberts. If such shares (and such withheld
shares) had been issued to Mr. Ralph J. Roberts on the date of exercise,
the aggregate value realized by him with respect to such exercises would
have been $102,833,384.
(2) See also note (7) under "Executive Compensation--Summary Compensation
Table."
11
(3) Mr. Brodsky realized the value shown above upon the exercise of options to
purchase 18,459 shares of Class A Special Common Stock. In addition,
789,326 shares of Class A Special Common Stock to be issued to Mr. Brodsky
were credited to his account. The receipt of such shares has been deferred
until January 2003 pursuant to the Deferred Stock Option Plan, resulting
from the net exercise on January 7, 1999 of options to purchase 554,472
shares at an exercise price of $3.1111 per share and the net exercise on
February 23, 1999 of options to purchase 416,332 shares at an exercise
price of $9.5625 per share, net of 22,034 shares withheld to satisfy
certain tax obligations. The per share fair market value of such shares on
January 7, 1999 was $31.50 and on February 23, 1999 was $38.0313. The
value ultimately realized with respect to such shares will be determined
based on the fair market value of such shares upon their issuance to Mr.
Brodsky. If such shares (and such withheld shares) had been issued to Mr.
Brodsky on the dates of exercise, the aggregate value realized by him with
respect to such exercises would have been $27,593,322.
Pension Plans
Under the Company's Supplemental Executive Retirement Plan (the "Plan"),
adopted July 31, 1989, supplemental retirement, death and disability benefits
may be paid to or in respect of certain senior
executives employed by the
Company and its affiliated companies, as selected by the Company's Board of
Directors. The Plan contemplates the payment of various percentages of a
participant's Final Average Compensation (as actuarially reduced, in certain
circumstances, and as defined below) in the event that the participant (i)
elects to retire early (after the laterit should be extended through calendar year 2006.
14
Description of the participant's 55th birthday or
20 years of service with the Company); (ii) retires at age 65 or after;
(iii) suffers a permanent disability which renders the participant incapable
of employment in the same or a similar occupation; or (iv) dies. A participant
may elect a reduction in lifetime benefits in exchange for the continuation of
payments to a surviving spouse. As of the date of this Proxy Statement,
Messrs. Ralph J. Roberts and Brodsky (who are each credited with 30 years of
service, the maximum credited service allowed under the Plan) are the only
current employees selected by the Board of Directors to participate in the
Plan.
The following table shows the annual single life annuity retirement benefit
which Messrs. Ralph J. Roberts and Brodsky, respectively, would receive based
on remuneration covered by, and years of service credited under, the Plan if
he had retired on January 1, 2000 at age 65 (or older). The benefits shown
below are subject to reduction for Social Security benefits.
Pension Plan Table
Final Average Years of Service
Compensation(1) 30 or More(2)
--------------- ----------------
$ 600,000.................................................. $360,000
700,000.................................................. 420,000
800,000.................................................. 480,000
900,000.................................................. 540,000
1,000,000.................................................. 600,000
1,100,000.................................................. 660,000
1,200,000.................................................. 720,000
- --------
(1) Final Average Compensation equals one-fifth of the total compensation for
the five years preceding termination of employment. Compensation includes
salary, bonus (including any deferred bonus) and any other supplementary
remuneration, but excludes discretionary payments made to participants to
offset tax liabilities incurred upon the exercise of nonqualified stock
options and split-dollar life insurance bonuses. In the case of Mr. Ralph
J. Roberts, Final Average Compensation may, under some circumstances, be
increased as described in "Agreements with Executive Officers--
Compensation Agreement with the Chief Executive Officer--Election to
Become a Consultant," below.
(2) This column represents the maximum benefits payable under the Plan.
12
The Company also has an agreement with Mr. Brodsky pursuant to which he is
entitled to a $30,000 payment each year for 15 years commencing upon his
termination of employment, subject to a vesting schedule. Any benefits
received under this agreement reduce the benefits to which Mr. Brodsky is
entitled under the Plan. Executive Cash Bonus Plan
The Comcast Corporation 1996following is a summary of the material features of the Executive Cash
Bonus Plan (the "ExecutivePlan.
The Executive Cash Bonus Plan")Plan provides for an annual cash bonus to be paid
to eligible employees of the Company ("Participants"(for purposes of this Proposal Four,
"Participants") selected by the Subcommittee on
Performance-Based Compensation of the Compensation Committee of the Board of
Directors (the "Compensation Subcommittee")Subcommittee with respect to
years from 1996 (beginning July 1, 1996) through 2003 (each, a "Plan Year").
The purpose of the Executive Cash Bonus Plan is to provide performance-based
cash bonus compensation in accordance with a formula that is based on the
financial success of the Company as part of an integrated compensation
program. The Executive Cash Bonus Plan is intended to satisfy the requirements
in Section 162(m) of the Internal Revenue Code and regulations thereunder for
"performance-based compensation" to employees subject to that provision, which
compensation is deductible by the Company even if total compensation to an
employee receiving it exceeds $1 million in any year. Upon the approval by the
shareholders of the amendment to the Executive Cash Bonus Plan described
above, the term of the Executive Cash Bonus Plan will be extended through
calendar year 2006.
Eligibility. The Compensation Subcommittee has designated all of the
Company's named executive officers and fivenine additional employees, onethree of
whom is anare executive officer,officers, as Participants in the Executive Cash Bonus Plan.
The Executive Cash Bonus Plan also provides that the Compensation Subcommittee
may from time to time designate other key executives to be included as
Participants in the Executive Cash Bonus Plan. The Compensation Subcommittee
expects that Participants in the Executive Cash Bonus Plan will be limited to
employees whose compensation is or may be subject to Section 162(m).
Bonus Entitlement. The maximum amount of the bonus payable under the
Executive Cash Bonus Plan (the "Target Bonus") with respect to any Plan Year
is (a) 150% of the sum of a Participant's base salary and any guaranteed bonus
awarded by the Compensation Subcommittee to such Participant for such Plan
Year, plus (b) the amount, if any, by which the Participant's bonus under the
Executive Cash Bonus Plan in any prior Plan Year was less than the Target
Bonus for such prior Plan Year(s). In no event, however, can a Participant's
Target Bonus for any Plan Year exceed $3 million.
The Executive Cash Bonus Plan requires that at the beginning of each Plan
Year the Compensation Subcommittee establish two goals for the Company's Cash
Flow (as defined in the Executive Cash Bonus Plan) for such Plan Year, a First
Tier Goal and a Second Tier Goal (which shall be higher than the First Tier
Goal). Each Participant in the Executive Cash Bonus Plan is entitled to a
bonus with respect to a Plan Year which is equal to 66 2/3% of the
Participant's Target Bonus if the Company's Cash Flow for the Plan Year is at
least equal to the First Tier Goal, and 100% of the Target Bonus if the
Company's Cash Flow for the Plan Year is at least equal to the Second Tier
Goal. If the level of Cash Flow for the Plan Year is higher than the First
Tier Goal and lower than the Second Tier Goal, the bonus with respect to such
Plan Year shall be such percentage of the Participant's Target Bonus in excess
of 66 2/3% as is determined by prorating the difference between 66 2/3% and
100%. If the level of Cash Flow for a Plan Year is below the First Tier Goal
established with respect to such Plan Year, no bonus is payable under the
Executive Cash Bonus Plan for that Plan Year.
Each Participant shall be entitled to receive a bonus in accordance with the
Executive Cash Bonus Plan only after certification by the Compensation
Subcommittee that the performance goals have been satisfied. The bonus payment
under the Executive Cash Bonus Plan is to be paid to each Participant as soon
as practicable following the close of the applicable Plan Year.
13
The Compensation Subcommittee has discretion under the Executive Cash Bonus
Plan to reduce or eliminate the bonus otherwise payable to a Participant if it
determines that such a reduction or elimination of the bonus is in the best
interests of the Company.
15
In the event any payment of a bonus otherwise payable under the Executive
Cash Bonus Plan occurs more than two months after the close of the Plan Year,
the amount of the bonus otherwise payable shall be increased by the amount
such bonus payment would earn if it were invested in an investment bearing a
7% annual rate of return, compounded daily, or such other reasonable rate of
interest as may be determined by the Compensation Subcommittee, during the
period from the close of the Plan Year with respect to which such bonus is
paid and the date the bonus is actually paid.
"Cash Flow" is defined in the Executive Cash Bonus Plan as the operating
income before depreciation and amortization for the Company and those of its
subsidiaries which are included with the Company in its consolidated financial
statements as prepared by the Company in accordance with generally accepted
accounting principles. In the event of a significant acquisition or
disposition of any assets, business division, company or other business
operations of the Company during a Plan Year that is reasonably expected to
have an effect on Cash Flow as otherwise determined under the terms of the
Executive Cash Bonus Plan, the Executive Cash Bonus Plan provides that the
First Tier Goal and the Second Tier Goal shall be adjusted to take into
account the impact of such acquisition or disposition so as to preserve the
relationship between the Cash Flow goals for the Plan Year and the Company's
performance in the prior comparable period, on a pro forma basis giving effect
to the acquisition or disposition, as further adjusted to reflect any aspects
of the transaction that should be taken into account to ensure comparability
between amounts in the prior Plan Year and the current Plan Year.
Administration. The Executive Cash Bonus Plan is administered by the
Compensation Subcommittee.
Amendment and Termination of the Plan. The Executive Cash Bonus Plan may be
terminated or revoked by the Company at any time and amended by the Company
from time to time, provided that neither the termination, revocation or
amendment of the Executive Cash Bonus Plan may, without the written approval
of the Participant, reduce the amount of a bonus payment that is due, but has
not yet been paid, and provided further that no changes that would increase
the amount of bonuses determined under provisions of the Executive Cash Bonus
Plan shall be effective without approval by the Compensation Subcommittee and
without disclosure to and approval by the shareholders of the Company in a
separate vote prior to payment of such bonuses. In addition, the Executive
Cash Bonus Plan may be modified or amended by the Compensation Subcommittee,
as it deems appropriate, in order to comply with any rules, regulations or
other guidance promulgated by the Internal Revenue Service with respect to
applicable provisions of the Internal Revenue Code as they relate to the
exemption for "performance-based compensation" under Section 162(m).
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE COMCAST CORPORATION 1996 EXECUTIVE CASH BONUS
PLAN.
16
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the Company's last three fiscal years,
certain information concerning the annual and long-term compensation, as well
as other compensation, paid to or for the Chief Executive Officer and each of
the other named executive officers.
Long-Term
Compensation All Other
Annual Compensation Awards Compensation
---------------------------------- ------------ (Including
Number of Split-Dollar
Other Annual Securities Insurance
Bonus Compensation Underlying Benefits)
Name and Principal Position(1) Year Salary($) ($)(2) ($)(3) Options(#) ($)(4)
- ------------------------------ ---- ---------- ---------- ------------ ------------ ------------
Ralph J. Roberts......... 2000 $1,102,500 $ 551,250 $2,669,177 250,000(5) $9,611,748
Chairman of the 1999 1,050,000 525,000 2,279,829 250,000(5) 9,109,062
Board of Directors 1998 1,000,000 500,000 1,998,687 1,134,610(5) 7,369,463
Julian A. Brodsky........ 2000 $ 759,692 $ 379,846 $ 27,358 60,000(5) $ 174,234
Vice Chairman of 800(6)
the Board of Directors 1999 723,516 361,758 25,252 60,000(5) 918,136
1998 689,063 344,532 23,409 605,000(5) 973,578
1,600(6)
Brian L. Roberts......... 2000 $1,050,000 $1,737,000 $ 310,474 4,000,000(5) $ 918,270
President 640(6)
1999 1,000,000 1,662,000 360,643 4,000,000(5) 224,203
2,600(6)
1998 689,063 713,250 278,398 3,169,610(5) 222,026
7,800(6)
Lawrence S. Smith........ 2000 $ 759,692 $ 449,962 $ 2,403 800,000(5) $ 585,756
Executive Vice President 1999 723,516 431,440 3,496 100,000(5) 32,261
1998 689,063 413,800 3,257 705,000(5) 30,361
2,200(6)
John R. Alchin........... 2000 $ 639,141 $ 348,071 $ 40,319 600,000(5) $ 554,358
Executive Vice President 1,200(6)
and Treasurer 1999 608,753 332,877 31,799 75,000(5) 35,460
1998 579,813 318,407 48,411 587,500(5) 33,670
1,200(6)
- --------
(1) The Company's by-laws do not provide for the position of "Chief Executive
Officer." For purposes of application of the proxy rules of the Securities
and Exchange Commission to this Proxy Statement, the Company has
determined that Mr. Ralph J. Roberts should be deemed to be the Company's
chief executive officer.
(2) The amounts in this column include bonuses earned by the named persons
under the Company's 1996 Executive Cash Bonus Plan, bonuses paid to the
named persons (except Messrs. Ralph J. Roberts and Brodsky) relating to
termination of the Company's discretionary bonus plan (see "Report on
Executive Compensation--Compensation Related to Termination of Prior Cash
Bonus Plan"), and guaranteed bonuses of $137,812 paid to Mr. Brian L.
Roberts in 1998 and $6,077, $5,788 and $5,512, paid to Mr. Smith in 2000,
1999 and 1998, respectively.
(3) This column includes Company payments to the named executive officers to
cover their tax liabilities incurred in connection with: (a) local taxes
on certain stock option exercises for Messrs. Brian L. Roberts and Alchin;
(b) Company payments to Messrs. Ralph J. Roberts, Brodsky and Brian L.
Roberts to cover the premiums attributable to the term life insurance
portion of split-
17
dollar life insurance policies or separate term life insurance policies
(see note (4)(b) below); (c) Company payments to cover premiums
attributable to the executive long-term disability plan (see note (4)(d)
below); and (d) other incidental taxable fringe benefits provided to the
named executive officers. Such amounts are calculated based upon the amount
of tax payable by the executive officers in accordance with the highest
individual income tax bracket.
(4) The amounts shown in this column include benefits associated with split-
dollar life insurance arrangements. In accordance with the terms of the
split-dollar life insurance arrangements, the Company will recover all of
the cumulative premiums paid by the Company for the whole-life portion of
such policies. This column includes (with respect to amounts applicable to
2000): (a) the dollar value, on a term loan approach, of the benefit of
the whole-life portion of the premiums for split-dollar life insurance
policies paid by the Company projected on an actuarial basis (Mr. Ralph J.
Roberts, $7,417,789; Mr. Brodsky, $103,022; Mr. Brian L. Roberts, $23,578;
Mr. Smith, $21,339; and Mr. Alchin, $20,472); (b) Company payments to
named executive officers to cover the premiums attributable to the term
life insurance portion of split-dollar life insurance policies or separate
term life insurance policies (Mr. Ralph J. Roberts, $1,493,891; Mr.
Brodsky, $61,727; Mr. Brian L. Roberts, $190,519; Mr. Smith, $1,515; and
Mr. Alchin, $1,410); (c) Company contributions to the Comcast Corporation
Retirement--Investment Plan in the amount of $5,950 for each of the named
executive officers; (d) Company payments to the named executive officers
(other than Mr. Ralph J. Roberts, who did not participate in such plan) to
cover the premiums attributable to the executive long-term disability plan
(Mr. Brodsky, $3,535; Mr. Brian L. Roberts, $4,104; Mr. Smith, $1,658; and
Mr. Alchin, $5,938); and (e) the value, at the date of award, of
partnership interests in a subsidiary of the Company that owns all of the
limited partnership interests in Comcast Interactive Capital, L.P.
("Comcast Interactive"), an investment partnership, awarded to certain of
the named executive officers as follows: Mr. Ralph J. Roberts, $694,118;
Mr. Brian L. Roberts, $694,118; Mr. Smith, $555,294; and Mr. Alchin,
$520,588, which partnership interests vest 15% on the date of award
(February 29, 2000), 20% on each of the first through third anniversaries
of the award, and 25% on the fourth anniversary of the award, conditioned
upon each such executive officer's continued employment with the Company
on the date of each such vesting. Does not include any value attributable
to interests beneficially owned by Mr. Brodsky in the general partner of
Comcast Interactive, as such interests were of nominal value at the time
of acquisition. The general partner, in which the Company owns no
interest, owns a 0.2% partnership interest in Comcast Interactive and is
entitled to a 15% interest in the profits of Comcast Interactive, subject
to a return of capital and a 10% preference return to the Company. Mr.
Brodsky directs the management of Comcast Interactive.
(5) Represents the number of shares of the Company's Class A Special Common
Stock issuable upon exercise of options. Share amounts with respect to
options granted prior to May 5, 1999 reflect the stock split in the form
of a dividend of one share of Class A Special Common Stock for each share
of Class A Common Stock, Class A Special Common Stock and Class B Common
Stock paid on May 5, 1999.
(6) Represents the number of shares of the common stock of QVC, Inc., a 57%-
owned non-public subsidiary of the Company, issuable upon exercise of
options granted to the named executive officers by the Compensation
Committee of the QVC, Inc. Board of Directors on April 30, 1998, July 7,
1998, October 26, 1998, July 7, 1999, June 21, 2000, July 17, 2000 or
September 21, 2000 pursuant to the 1995 QVC Stock Option and Stock
Appreciation Rights Plan (the "1995 QVC Plan"). Such options were issued
with tandem stock appreciation rights exercisable in lieu of the options
for 75% of the excess of the value of the QVC, Inc. common stock (as
determined pursuant to the 1995 QVC Plan) over the exercise price of such
options. Such options have an exercise price per share of $1,127.00 (for
options granted on June 21, July 17 and September 21, 2000), $865.47 (for
options granted July 7, 1999), $651.84 (for options granted July 7 and
October 26, 1998) and $688.14 (for options granted April 30, 1998),
representing the value of the shares underlying such options on the date
of grant as determined pursuant to the 1995 QVC Plan, and such options
vest
18
20% on each of the first five anniversaries of the date of grant, based on
the named executive's continued service to the Company. In all cases,
vesting is accelerated upon a change of control of QVC, Inc. The QVC, Inc.
options expire ten years after the date of grant. The estimated present
values of QVC, Inc. stock options at the date of grant which were granted
in 2000 to Messrs. Brodsky, Brian L. Roberts and Alchin were $393,096,
$309,933 and $567,060, respectively. Such present values are calculated
using the Black-Scholes option pricing model, based upon the following
assumptions used in developing the grant valuation: an expected volatility
of approximately 20.0%; an expected term to exercise of eight years; an
interest rate of approximately 6.2%; and no dividend yield. The actual
value of the options, if any, realized by Messrs. Brodsky, Brian L. Roberts
and Alchin will depend on the extent to which the market value of the
common stock of QVC, Inc. exceeds the exercise price of the option on the
date the option is exercised. Consequently, there is no assurance that the
value realized by Messrs. Brodsky, Brian L. Roberts and Alchin will be at
or near the values estimated above. During 2000, such executive officers
exercised certain of such options to purchase shares of QVC, Inc. common
stock and realized value upon such exercises as follows: Mr. Brodsky, 1,440
shares, $1,040,830; Mr. Brian L. Roberts, 4,680 shares, $3,204,283; Mr.
Smith, 800 shares, $723,160; and Mr. Alchin, 600 shares, $569,970. At
December 31, 2000, the number of shares of QVC, Inc. common stock
underlying unexercised options was as follows: Mr. Brodsky (0 exercisable,
1,760 unexercisable); Mr. Brian L. Roberts (0 exercisable, 7,400
unexercisable); Mr. Smith (1,000 exercisable, 1,400 unexercisable); and Mr.
Alchin (480 exercisable, 1,920 unexercisable). At December 31, 2000, the
excess of the fair market value of QVC, Inc. common stock over the exercise
price for options outstanding based upon the most recent valuation date was
as follows: Mr. Brodsky ($0 exercisable, $577,946 unexercisable); Mr. Brian
L. Roberts ($0 exercisable, $3,356,635 unexercisable); Mr. Smith ($539,476
exercisable, $756,428 unexercisable); and Mr. Alchin ($253,373 exercisable,
$486,859 unexercisable).
Stock Option Grants
The following table contains information concerning grants of stock options
under the Company's 1996 Stock Option Plan to the Chief Executive Officer and
to each of the Company's other named executive officers during 2000. No
Comcast Corporation stock appreciation rights ("SARs") were granted during
2000 to the Chief Executive Officer or to any of the Company's named executive
officers.
Stock Option Grants in 2000
Individual Grants(1)
--------------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration Grant Date
Name Granted(#) in 2000 ($/Sh) Dates Present Value(2)
- ---- ---------- ---------- --------- ---------- ----------------
Ralph J. Roberts........ 2,835(3) * $ 42.3500 03/30/05 $ 42,469
247,165 1.6% 38.5000 03/30/10 5,149,028
Julian A. Brodsky(4).... 60,000 * $ 38.5000 03/30/10 $ 1,249,941
Brian L. Roberts (4).... 1,000,000 6.5% $ 49.7500 01/04/10 $ 26,874,950
474(3) * 42.3500 03/30/05 7,101
999,526 6.5% 38.5000 03/30/10 20,822,475
2,435(3) * 45.1688 07/05/05 37,365
997,565 6.5% 41.0625 07/05/10 21,542,185
1,000,000 6.5% 41.4375 10/05/10 22,305,806
Lawrence S. Smith....... 800,000 5.2% $ 37.5625 06/02/10 $ 16,236,015
John R. Alchin(4)....... 600,000 3.9% $ 37.5625 06/02/10 $ 12,177,011
- --------
* Less than one percent of total options granted to employees in 2000.
19
(1) All of the options are for the purchase of shares of Class A Special
Common Stock and were granted on either January 4, March 30, June 2, July
5 or October 5, 2000 under the Company's 1996 Stock Option Plan. Except
as described in note (3) below, all options granted in 2000 have exercise
prices equal to the fair market value of the underlying stock on the date
of grant and generally become exercisable at the rate of 20% of the
shares covered thereby on the second anniversary of the date of grant,
another 10% on each of the third through ninth anniversaries of the date
of grant and 10% six months prior to the tenth anniversary of the date of
grant, or, as to 247,165 stock options granted to Mr. Ralph J. Roberts on
March 30, 2000, 1,000,000 stock options granted to Mr. Brian L. Roberts
on January 4, 2000 and 1,000,000 stock options granted to Mr. Brian L.
Roberts on October 5, 2000, at the rate of 40% of the shares covered
thereby on the second anniversary of the date of the grant and 20% each
on the third, fourth and fifth anniversaries of the date of the grant.
All options granted are nonqualified stock options, except for 2,835 of
the options granted to Mr. Ralph J. Roberts, 2,597 of the options granted
to Mr. Brodsky, 2,909 of the options granted to Mr. Brian L. Roberts and
2,662 of the options granted to each of Messrs. Smith and Alchin, which
are incentive stock options. With respect to the grant of options to
purchase 1,000,000 shares made to Mr. Brian L. Roberts effective October
5, 2000, such options shall automatically convert to and become options
to purchase shares of the Company's Class B Common Stock in the event and
at such time as the shareholders may approve an amendment to the 1996
Stock Option Plan permitting such conversion.
(2) These amounts represent the estimated present value of stock options at
the date of grant calculated using the Black-Scholes option pricing
model, based upon the following assumptions used in developing the grant
valuations: an expected volatility of approximately 35.8%; an expected
term to exercise of eight years, except for certain incentive stock
options granted to Messrs. Ralph J. Roberts and Brian L. Roberts, for
which the expected term to exercise is five years; an interest rate of
approximately 6.4%; and no dividend yield. The actual value of the
options, if any, realized by an executive officer will depend on the
extent to which the market value of the Class A Special Common Stock
exceeds the exercise price of the option on the date the option is
exercised. Consequently, there is no assurance that the value realized by
an executive officer will be at or near the value estimated above. These
amounts should not be used to predict stock performance.
(3) In accordance with the tax rules governing incentive stock options, these
options were granted at an exercise price equal to 110% of the fair
market value of the underlying stock on the date of grant. The options to
purchase shares of the Company's Class A Special Common Stock become
exercisable at the rate of 40% of the shares covered thereby on the
second anniversary of the date of grant, another 20% on each of the third
and fourth anniversaries of the date of grant and another 20% six months
prior to the fifth anniversary of the date of grant.
(4) In addition to the options described above, (i) on July 17, 2000, options
to purchase 640 shares of the common stock of QVC, Inc. at an exercise
price of $1,127.00 per share were issued to Mr. Brian L. Roberts; (ii) on
June 21, 2000, options to purchase 800 shares of the common stock of QVC,
Inc. at an exercise price of $1,127.00 per share were issued to Mr.
Brodsky; and (iii) on September 21, 2000, options to purchase 1,200
shares of the common stock of QVC, Inc. at an exercise price of $1,127.00
per share were issued to Mr. Alchin. See note (6) under "Executive
Compensation--Summary Compensation Table."
20
Stock Option Exercises and Holdings
The following table sets forth information related to options to purchase
shares of the Company's Class A Special Common Stock exercised during 2000 by
the Chief Executive Officer and each of the other named executive officers
during 2000, and the number and value of options or SARs held at December 31,
2000 by such individuals.
Aggregated Option Exercises in 2000
and Option Values at December 31, 2000
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares December 31, 2000(#) December 31, 2000($)
Acquired on Value ------------------------- --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ------------ -------------
Ralph J. Roberts........ 2,039,529(1) $55,202,125(1) 3,705,981 1,227,604 $121,782,531 $ 21,589,010
Julian A. Brodsky(2).... 408,516(3) (3) 1,865,782 1,093,644 $ 61,944,735 $ 29,574,255
Brian L. Roberts(2)..... 173,567 $ 6,350,944 1,615,033 11,180,382 $ 45,080,533 $125,607,026
Lawrence S. Smith(2).... 269,084 $10,487,820 257,916 1,956,306 $ 6,798,837 $ 35,703,787
John R. Alchin(2)....... 58,430 $ 2,304,752 536,150 1,524,490 $ 16,334,650 $ 28,362,803
- --------
(1) Mr. Ralph J. Roberts realized the value shown above upon the exercise of
options to purchase 1,229,561 shares of Class A Special Common Stock. In
addition, the receipt of 809,968 shares of Class A Special Common Stock
to be issued to Mr. Ralph J. Roberts was deferred until July 15, 2002
pursuant to the Company's 1997 Deferred Stock Option Plan (the "Deferred
Stock Option Plan"), resulting from the exercise on June 1, 2000 of
options to purchase 1,111,516 shares at an exercise price of $9.5625 per
share, net of 20,917 shares withheld to satisfy certain tax obligations.
The per share fair market value of such shares on June 1, 2000 was
$37.875. The value ultimately realized with respect to such shares will
be determined based on the fair market value of such shares upon their
issuance to Mr. Ralph J. Roberts. If such shares (and such withheld
shares) had been issued to Mr. Ralph J. Roberts on the date of exercise,
the aggregate value realized by him with respect to such exercise would
have been $31,469,797.
(2) See also note (6) under "Executive Compensation--Summary Compensation
Table."
(3) Represents 408,516 shares of Class A Special Common Stock to be issued to
Mr. Brodsky, the receipt of which has been deferred until January 1, 2003
pursuant to the Deferred Stock Option Plan, resulting from the net
exercise on June 20, 2000 of options to purchase 296,541 shares at an
exercise price of $5.4167 per share and options to purchase 222,660
shares at an exercise price of $9.5625 per share, net of 11,403 shares
withheld to satisfy certain tax obligations. The per share fair market
value of such shares on June 20, 2000 was $37.625. The value ultimately
realized with respect to such shares will be determined based upon the
fair market value of such shares upon their issuance to Mr. Brodsky. If
such shares (and such withheld shares) had been issued to Mr. Brodsky on
the date of exercise, the aggregate value realized by him with respect to
such exercises would have been $15,799,478.
Pension Plan
Under the Company's Supplemental Executive Retirement Plan (the
"Supplemental Executive Retirement Plan"), adopted July 31, 1989, supplemental
retirement, death and disability benefits may be paid to or in respect of
certain senior executives employed by the Company and its affiliated
companies, as selected by the Company's Board of Directors. The Supplemental
Executive Retirement Plan contemplates the payment of various percentages of a
participant's Final Average Compensation (as actuarially reduced, in certain
circumstances, and as defined below) in the event that the participant (i)
elects to retire early (after the later of the participant's 55th birthday or
20 years of service with the Company); (ii) retires at age 65 or after; (iii)
suffers a permanent disability which
21
renders the participant incapable of employment in the same or a similar
occupation; or (iv) dies. A participant may elect a reduction in lifetime
benefits in exchange for the continuation of payments to a surviving spouse.
As of the date of this Proxy Statement, Messrs. Ralph J. Roberts and Brodsky
(who are each credited with 30 years of service, the maximum credited service
allowed under the Supplemental Executive Retirement Plan) are the only current
employees selected by the Board of Directors to participate in the
Supplemental Executive Retirement Plan.
The following table shows the annual single life annuity retirement benefit
which Messrs. Ralph J. Roberts and Brodsky, respectively, would receive based
on remuneration covered by, and years of service credited under, the
Supplemental Executive Retirement Plan if he had retired on January 1, 2001 at
age 65 (or older). The benefits shown below are subject to reduction for
Social Security benefits.
Pension Plan Table
Final Average Years of Service
Compensation(1) 30 or More(2)
--------------- ----------------
$ 600,000.................................................. $360,000
700,000.................................................. 420,000
800,000.................................................. 480,000
900,000.................................................. 540,000
1,000,000.................................................. 600,000
1,100,000.................................................. 660,000
1,200,000.................................................. 720,000
1,300,000.................................................. 780,000
- --------
(1) Final Average Compensation equals one-fifth of the total compensation for
the five years preceding termination of employment. Compensation includes
salary, bonus (including any deferred bonus) and any other supplementary
remuneration, but excludes payments made to participants for split-dollar
life insurance premium bonuses and payments made to offset tax liabilities
incurred related to these bonuses. In the case of Mr. Ralph J. Roberts,
Final Average Compensation may, under some circumstances, be increased as
described in "Agreements with Executive Officers--Compensation Agreement
with the Chief Executive Officer--Election to Become a Consultant," below.
(2) This column represents the maximum benefits payable under the Supplemental
Executive Retirement Plan.
The Company also has an agreement with Mr. Brodsky pursuant to which he is
entitled to a $30,000 payment each year for 15 years commencing upon his
termination of employment, subject to a vesting schedule. Any benefits
received under this agreement reduce the benefits to which Mr. Brodsky is
entitled under the Supplemental Executive Retirement Plan.
Agreements with Executive Officers
Compensation Agreement with the Chief Executive Officer
A Compensation and Deferred Compensation Agreement and Stock Appreciation
Bonus Plan with the Chief Executive Officer (the "1993 Compensation
Agreement") was approved by the Company's shareholders on June 22, 1994.
Certain terms of the 1993 Compensation Agreement expired on December 31, 1997,
and on December 16, 1997 the Company and the Chief Executive Officer entered
into a new Compensation and Deferred Compensation Agreement. This agreement
was amended and restated effective August 31, 1998, and then amended again
effective August 19,30, 1999 (as so amended, the "1998 Compensation Agreement").
The 1998 Compensation Agreement generally extends the terms of the 1993
Compensation Agreement with certain modifications.
1422
The 1998 Compensation Agreement provides that the Chief Executive Officer
will continue to serve as Chairman of the Board of Directors of the Company
until December 31, 2002, or until such time as he may elect to change his
status to that of a non-executive consultant, and that until he makes such
election he will continue to devote substantially all of his working time to
the Company, on the terms and conditions summarized below. If he elects to
become a non-executive consultant, he shall devote such time as is necessary
to perform the functions reasonably requested by the Company. In addition, for
a period of five years following any termination of the service period of the
1998 Compensation Agreement, the Chief Executive Officer will perform such
reasonable ceremonial functions as the Company may request, and will promote
the interests and goodwill of the Company in such manner as the Company may
reasonably request.
Base Salary. The 1998 Compensation Agreement provides that the Chief
Executive Officer will receive an annual base salary of $1 million beginning
in 1998, as adjusted (but never reduced, except pursuant to an overall plan to
reduce the compensation of all senior executive officers of the Company) in
order to reflect the greater of increases in the consumer price index
subsequent to 1997 and the average percentage increase in the base
compensation of the five employees of the Company (other than the Chief
Executive Officer) with the highest base compensation.
Bonus. The 1998 Compensation Agreement provides that so long as he continues
to serve as an executive of the Company the Chief Executive Officer will be
eligible to receive annual bonuses of up to 50% of his base salary in
accordance with the Company's Executive Cash Bonus Plan, based on performance
targets established by the Compensation Subcommittee.
Split-Dollar Life Insurance. The 1998 Compensation Agreement requires the
Company to continue to provide and to maintain the split-dollar life insurance
provided to the Chief Executive Officer under the 1993 Compensation Agreement,
and in addition to provide additional survivorship split-dollar life insurance
to the Chief Executive Officer and his spouse. Such split-dollar life
insurance includes certain split-dollar life insurance provided pursuant to
the 1993 Compensation Agreement to replace the potential benefits represented
by the Company's terminated discretionary bonus plan with respect to the
appreciation through March 15, 1994, in the options for Class A Special Common
Stock previously awarded to the Chief Executive Officer, taking into account
the financial position of the Company and the tax deductibility of any such
payments. See "Report on Executive CompensationCompensation--Compensation Related to
Termination of the Compensation
Committee's Subcommittee on Performance-Based Compensation."Prior Cash Bonus Plan" below. Under the split-
dollarsplit-dollar life
insurance arrangements, the Company pays a portion of the annual premiums for
certain single-life and joint-and-survivor life insurance policies for the
Chief Executive Officer, and upon payment of the policies at the death of the
Chief Executive Officer or of the survivor of the Chief Executive Officer and
his spouse, as applicable, the Company recovers all of the cumulative premiums
previously paid by the Company for the whole-life portion of such policies.
The Chief Executive Officer is responsible for payment of the portion of such
annual premiums representing the cost of term insurance for each year. The
Company also pays the Chief Executive Officer an annual cash bonus in an
amount equal to the portion of the annual premium for such life insurance that
he is required to pay; in addition, the Company increases the bonus by an
amount sufficient to pay any income tax orand gift tax liability incurred or to
be incurred in connection with payment of the bonus.
Supplemental Death Benefit. Upon the death of the Chief Executive Officer,
the 1998 Compensation Agreement requires the Company to pay a supplemental
death benefit (the "Death Benefit") to the personal representatives of the
Chief Executive Officer. The amount of the Death Benefit shallwas initially be
$31.2
million. Under the terms of the 1998 Compensation Agreement, the Chief
Executive Officer may request that the Company invest portions of the Death
Benefit in certain investments identified by the Chief Executive Officer.
Should the Company choose to comply with the Chief Executive Officer's
request, the amount of the Death Benefit will be adjusted to reflect the
increase or decrease in value of any such investments. The 1998 Compensation Agreement substituted the Death Benefit for two
bonus arrangements included in the 1993 Compensation Agreement that
15
were based
on appreciation of the Company's Class A Common Stock from the date of grant
of options to purchase Class B Common Stock to the date of exercise. The
Compensation Subcommittee determined that the after-tax present value cost to
the Company of the Death Benefit was approximately equal to the cost of the
bonuses that would otherwise have been paid. The Company must pay the Death
Benefit within
23
six months from the date of the Chief Executive Officer's death. Under the
terms of the 1998 Compensation Agreement, the Chief Executive Officer may
request that the Company invest portions of the Death Benefit in certain
investments identified by the Chief Executive Officer. Should the Company
choose to comply with the Chief Executive Officer's request, the amount of the
Death Benefit will be adjusted to reflect the increase or decrease in value of
any such investments.
Termination. The 1998 Compensation Agreement will terminate upon the Chief
Executive Officer's death, at the Company's option upon his disability, or for
cause (as such terms are defined in the 1998 Compensation Agreement) upon a
vote of not less than two-thirds of the entire membership of the Company's
Board of Directors. If his employment is terminated by reason of his death or
disability, the Company shall continue to pay his annual base salary on a
monthly basis to him or his spouse, during their lifetimes, for a maximum of
five years, and the Accrued Cash Bonus, the Benefit Plans (as such terms are
defined in the 1998 Compensation Agreement) and the Death Benefit will
continue to be payable. In the event of death, all of his outstanding stock
options will vest fully and remain exercisable for their remaining terms. If
his employment is terminated by the Company in violation of the 1998
Compensation Agreement, he shall remain entitled to substantially all of the
benefits under the 1998 Compensation Agreement.
Noncompetition and Confidentiality. Under the 1998 Compensation Agreement,
the Chief Executive Officer agreeshas agreed not to compete with the Company during
his employment and for five years after termination of his employment. The
agreement also requires him to maintain the confidentiality of certain
information of the Company, and not to use such information except for the
benefit of the Company, at all times during his employment and after
termination of his employment. Breach of any of such obligations constitutes
cause for termination of the 1998 Compensation Agreement and terminates the
Company's obligations for payments subsequent to any discharge of the Chief
Executive Officer.
Change of Control Provisions. Prior to any "Change of Control" (as defined
below), the Company must establish and fund a grantor trust, the amounts in
which will be subject to claims of the Company's creditors in the case of the
Company's bankruptcy, for the purpose of paying all deferred compensation,
nonqualified retirement benefits, and split-dollar life insurance premiums and
bonuses for the Chief Executive Officer then applicable. Upon the occurrence
of a Change of Control, such trust must become irrevocable (if not already
irrevocable), and the Company must continue to make payments into such trust
to maintain sufficient amounts therein to fund all benefits subject to the
trust. A "Change of Control" is defined as occurring when persons other than
the Chief Executive Officer and members of his immediate family or trusts for
their benefit acquire voting power over more than 50% of the voting stock of
the Company.
Election to Become a Consultant. The Chief Executive Officer may at any
time, upon 30 days notice to the Company, elect to change his position from
that of an executive to that of consultant to the Company. In such event, he
shall continue to receive all of the compensation provided under the 1998
Compensation Agreement, other than the bonus under the Executive Cash Bonus
Plan. If he elects to become a consultant, the Chief Executive Officer's
entitlement to retirement benefits under the Company's Supplemental Executive
Retirement Plan will be adjusted annually to reflect 150% of his base salary
as a consultant, but his benefits under such plan will not in any event exceed
the bonus he could have received under the 1998 Compensation Agreement had he
continued to work as an executive.
Compensation Agreement with Mr. Brian L. Roberts
The Company entered into a Compensation Agreement (the "Compensation
Agreement") with Brian L. Roberts, the Company's President. The following is a
description of the material terms of the Compensation Agreement.
1624
Term. The term of the Compensation Agreement is from June 16, 1998 through
June 30, 2003 (the "Employment Period"). Mr. Brian L. Roberts agrees to work
full time for the Company during the Employment Period.
Base Salary. The Compensation Agreement provides that Mr. Brian L. Roberts
will receive an annual base salary of $1 million beginning in 1998, as
adjusted (but never reduced, except pursuant to an overall plan to reduce the
compensation of all senior executive officers of the Company) from time to
time to reflect his contribution to the growth and success of the Company.
Bonus; Options. Pursuant to the Compensation Agreement, Mr. Brian L. Roberts
is eligible to receive an annual performance bonus, payable in cash,
commencing in 1999, of up to 150% of his base salary for the applicable year.
The amount of the bonus is determined annually by the Compensation
Subcommittee, in accordance with, and upon satisfaction of, the standards
contained in the Company's Executive Cash Bonus Plan. The Compensation
Agreement also provides that Mr. Brian L. Roberts is to receive grants of
options to purchase 3,000,000 shares of the Class A Special Common Stock of the
Company granted effective June 16, 1998 and options to purchase 1,000,000
shares of the Class A Special Common Stock of the Company granted or to be granted effective the
second business day of each fiscal quarter in 1999 and 2000, or such earlier
date as the Compensation Subcommittee may determine in its sole discretion.
Deferred Compensation. The Compensation Agreement provides that the Company
and Mr. Brian L. Roberts may, by written agreement prior to the end of any
calendar year during the Employment Period, cause the payment of all or a
portion of the compensation payable to Mr. Brian L. Roberts in the subsequent
calendar year to be deferred to a subsequent calendar year in accordance with
and subject to the Company's 1996 Deferred Compensation Plan.
Termination. The Compensation Agreement will terminate upon the death of Mr.
Brian L. Roberts, at the Company's option upon his disability, or for cause
(as such terms are defined in the Compensation Agreement) upon a vote of not
less than two-thirds of the entire membership of the Company's Board of
Directors. If his employment is terminated by reason of his death or
disability, the Company shall continue to pay his annual base salary on a
monthly basis to him or his spouse, during their lifetimes, for a maximum of
five years, and the accrued cash bonus as provided for in the Compensation
Agreement and any applicable health plan benefits will continue to be payable.
If his employment is terminated by the Company in violation of the
Compensation Agreement, he shall remain entitled to substantially all of the
benefits under the Compensation Agreement.
Noncompetition and Confidentiality. Under the Compensation Agreement, Mr.
Brian L. Roberts agrees not to compete with the Company during his employment
and for two years after termination of his employment. The Agreement also
requires him to maintain the confidentiality of certain information of the
Company, and not to use such information except for the benefit of the
Company, at all times during his employment and after termination of his
employment. Breach by Brian L. Roberts of any of such obligations constitutes
cause for termination of the Compensation Agreement, and terminates the
Company's obligations for payments subsequent to such termination.
Change of Control Provisions. Prior to any "Change of Control" (as defined
below), the Company must establish and fund a grantor trust, the amounts in
which will be subject to claims of the Company's creditors in the case of the
Company's bankruptcy, for the purpose of paying all deferred compensation and
term life insurance premiums and bonuses for Mr. Brian L. Roberts then
applicable. Upon the occurrence of a Change of Control, such trust must become
irrevocable (if not already irrevocable), and the Company must continue to
make payments into such trust to maintain sufficient amounts therein to fund
all benefits subject to the trust. A "Change of Control" is defined as
occurring when persons other than Mr. Brian L. Roberts and members of his
immediate family or trusts for their benefit acquire voting power over more
than 50% of the voting stock of the Company.
1725
Term Life Insurance Agreement with Mr. Brian L. Roberts
The Company has entered into a Term Life Insurance Premium and Tax Bonus
Agreement dated as of September 23, 1998 (the "Term Life Insurance Agreement")
with Mr. Brian L. Roberts, the Company's President. The Term Life Insurance
Agreement provides that, as additional compensation to Mr. Brian L. Roberts,
the Company will reimburse him for all of the premiums on certain specified
20- and 15-year level-premium term life insurance policies aggregating $170
million in insurance on his life, and that the Company will pay him an
additional bonus equal to the income tax payable on such reimbursement and the
bonus. The annual amount of the premiums to be reimbursed under the Term Life
Insurance Agreement is approximately $189,000 through 2012 and $177,000 from
2013-2017.2013 through 2017.
The Term Life Insurance Agreement provides that prior to any "Change of
Control" (as defined below), the Company must establish a grantor trust, the
amounts in which will be subject to claims of the Company's creditors in the
case of the Company's bankruptcy, for the purpose of paying all premium
reimbursements and tax bonuses for the remaining life of the policies subject
to the Term Life Insurance Agreement. Upon the occurrence of a Change of
Control, such trust must become irrevocable (if not already irrevocable), and
the Company must make payments into such trust in an amount equal to the full
amount required to be paid during the remaining term of the insurance
policies. A "Change of Control" is defined as occurring when persons other
than Mr. Brian L. Roberts and members of his immediate family or trusts for
their benefit acquire voting power over more than 50% of the voting stock of
the Company. The Term Life Insurance Agreement does not terminate upon
termination of the employment of Mr. Brian L. Roberts by the Company.
Employment Agreements with Messrs. Smith and Alchin
The Company has entered into employment agreements with two other named
executive officers of the Company: Lawrence S. Smith, the Company's Executive
Vice President, and John R. Alchin, the Company's Executive Vice President and
Treasurer. The following is a description of the material terms of such
agreements.
The term of each such agreementsagreement is from January 1, 1995May 31, 2000 through December 31,
20002005 (the "Executive Employment Period"). Mr. Smith and Mr. Alchin each agree
to work full time for the Company during the Executive Employment Period.
The agreement with Mr. Smith provides for a base salary of $600,000$825,000 in 1995,2001,
and the agreement with Mr. Alchin provides for a base salary of $500,000$700,000 in
1995.2001. In each case, for each year in the Executive Employment Period
subsequent to 19952001 the base salary is increased by the greater of 5% or the
percentage increase during the previous year in the consumer price index.
Pursuant to the agreements, each of the executives is eligible to receive an
annual performance bonus, commencing in 1996,2000, of up to 50% of his base salary
for the applicable year. The amount of the bonus is determined annually by the
Compensation Subcommittee, based on the performance of the Company and of the
executive during such year, and is payable in cash or in shares of Class A
Special Common Stock of the Company, at the discretion of the Compensation
Subcommittee.
Each agreement provides that the executive's employment may be terminated
without cause by the Company and that he may resign voluntarily. If the
executive's employment is terminated without cause, he is entitled to receive
his then-current base salary and all insurance, medical or other similar
benefits for a period of one yeartwo years from the date of discharge, subject to
offset by other compensation or benefits earned by the executive during such
period, and he is entitled to receive his bonus for the year of discharge. If
the executive resigns, or is terminated for cause (as defined in the
agreement), he is entitled only to his base salary for days actually worked
and any amounts due to him under the Company's 1996 Deferred Compensation
Plan.
1826
Under each of the agreements, the executive agrees not to compete with the
Company during his employment and for two yearsone year after termination of his
employment. The agreements also require each executive to maintain the
confidentiality of certain information of the Company, and not to use such
information, except for the benefit of the Company, at all times during his
employment and after termination of his employment. Breach by the executive of
any of such obligations constitutes cause for termination of the applicable
agreement, and terminates the Company's obligations for payments subsequent to
any discharge of the executive. Each of the agreements provides that it shall
continue in effect upon the merger of the Company into another entity, or in
similar events.
Stock Performance Graph
The following graph compares the yearly percentage change in the cumulative
total shareholder return on each of the Company's Class A Common Stock and
Class A Special Common Stock during the five years ended December 31, 19992000
with the cumulative total return on the Standard & Poor's 500 Stock Index and
with a selected peer group consisting of the Company and three other companies
engaged in the cable communications industry: Cablevision Systems Corporation
(Class A);, Adelphia Communications Corporation ("Adelphia") and Cox Communications, Inc. ("Cox"). This peer group (the "Current Peer Group")
represents a change from the peer group used for comparison by the Company in
prior years (the "Prior Peer Group"). The Prior Peer Group included Jones
Intercable, Inc. ("Jones Intercable"), Time Warner, Inc. ("Time Warner"), TCA
Cable TV, Inc. ("TCA") and TCI Communications, Inc. ("TCI"), and did not
include Adelphia or Cox. Jones Intercable was omitted from the Current Peer
Group because of its acquisition by the Company, Time Warner was omitted from
the Current Peer Group because of its pending acquisition by America Online,
Inc., TCA was omitted from the Current Peer Group because of its acquisition
by Cox and TCI was omitted from the Current Peer Group because of its
acquisition by AT&T Corp. Adelphia and Cox were added to the Current Peer
Group because of the Company's belief that Adelphia and Cox are in a line of
business similar to that of the Company and that a comparison of the
performance of the Company's Class A Common Stock and Class A Special Common
Stock against the performance of the common stock of Adelphia and Cox is a
meaningful comparison that would be helpful to a person making an investment
decision with respect to the Company's Class A Common Stock or Class A Special
Common Stock.
The comparison assumes $100 was invested on December 31, 19941995 in the Company's
Class A Common Stock and Class A Special Common Stock and in each of the
foregoing indices and assumes the reinvestment of dividends.
19
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[Graph Appears Here][GRAPH]
1995
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
Comcast Class A..................................... 115 116 210 380 634101 183 330 550 475
Comcast Class A Special............................. 117 115 204 381 656
Current98 175 327 563 465
Peer Group Index............................ 114 121 219 399 637
Prior Peer Group Index.............................. 110 108 185 366 480Index.................................... 107 196 355 553 492
S&P 500 Stock Index................................. 138 169 226 290 351123 164 211 255 232
27
Report on Executive Compensation
This report is issued jointly by the Compensation Committee of the Compensation Committee's Subcommittee
on Performance-Based Compensation
Compensation Policy. The Compensation CommitteeBoard of
Directors (the "Committee") and the Compensation Subcommittee. The Committee
is generally responsible for making broad recommendations to the Board of
Directors on executive compensation. In 1999, the Committee deferred to its Subcommittee on
Performance-Based Compensation (the "Compensation Subcommittee")However, authority on virtually all
specific compensation decisions for the Company's executive officers in light ofhas been
delegated to the Compensation Subcommittee's designated responsibility forSubcommittee, including matters such as
establishing performance-based criteria and goals for compensation to senior
executives and for administering the Company's 1987 Stock Option Plan, the 1996
Stock Option Plan, the 1990 Restricted Stock Plan, the Executive Cash Bonus Plan and
other bonus plans, and for approval of agreements with the Chief Executive
Officer, as well as Mr. Brian L. Roberts and others. The members of the
Compensation Subcommittee (which, for the 2000 fiscal year, included Gustave
G. Amsterdam, who died in early 2001) are disinterested non-employee directors
as well as "outside directors" (as defined in Section 162(m) of the Internal
Revenue Code).
Compensation Policy. The goal of the Committee and the Compensation
Subcommittee is to attract and retain highly qualified executive officers and
key employees in an effort to enhance shareholder value. The Company attempts
to realize these goalsthis goal by providing competitive compensation and permitting
executive officers to take an ownership stake in the Company commensurate with
their relative levels of 20
seniority and responsibilities.
The members of the Compensation Subcommittee
are disinterested non-employee directors as well as "outside directors" (as
defined in Section 162(m) of the Internal Revenue Code).
Each yearCommittee performs a general review each year of the Company's executive
compensation is
conducted, except for the compensation of the Chief Executive Officer, which
was determined under the 1993 Compensation Agreement and separately reviewed
in connection with the execution of the 1998 Compensation Agreement.compensation. A key factor in the assessment of the compensation of the
Company's executive officers is the Company's overall performance, in light of
their principal responsibility for overall corporate policy-making, management
and administration. InHowever, the second halfcompensation of 1998, the CommitteeCompany's executive
officers, including the Chief Executive Officer, is primarily determined
pursuant to multi-year contracts and the Executive Cash Bonus Plan. Therefore,
the Compensation Subcommittee also retained independentprimarily reviews each executive officer's
compensation consultants toin connection with modifications or renewals of the executive's
employment contract. The current compensation structure for the named
executive officers (other than the Chief Executive Officer) resulted from a
comprehensive review of the compensation package of the Company's presidentPresident
and the overall structure of the Company's incentive compensation programs for
all executive employees. As a result of the latter review,
beginningemployees, which culminated in 1999 the Compensation Subcommittee adjusted the ratios of stock
optionsSubcommittee's
authorization and direction to base salary and of cash bonusmanagement in early 2000 to equity-based incentive
compensation comparedseek to enter into
five-year employment agreements containing non-competition provisions with compensation awarded in years prior to 1999.all
executive officers.
The principal forms of executive compensation used by the Company in recent
years are base salary, bonuses, and stock options, and, for certain executives,
split-dollar (whole) life insurance policies and term insurance policies. The
Company seeks to achieve a mix of these various forms of compensation which
will properly compensate and motivate its executives on an individual basis
commensurate with their relative levels of seniority and responsibility. TheA
variety of factors are considered in arriving at the compensation paid to the
Company's executive officers. No specific weighting was assigned to any of the
factors considered in determining the remuneration paid to the named executive
officers for 2000. Prior to seeking to enter into five-year employment
agreements in the year 2000 (as noted above), the Committee's general goal ishad
been to provide the executive officers (other than the Chief Executive
Officer) with total compensation that, based on individual and Company
performance viewed over an appropriate period of time, iswas generally between
the 50th and 75th percentile of total compensation for executives with
comparable positions at peer companies, as confirmed by an independent
compensation consultant. As discussed below, a variety of factors are considered in arriving at the
compensation paid to the Company'sThe employment agreements signed by executive
officers other thanin the year 2000 did not alter this approach substantially. However,
in the case of the Chief Executive Officer. No specific weighting was assignedOfficer, compensation has historically been
determined, as discussed below, by individualized assessment of his
performance and by comparison to anyexecutives of other companies who have been
"founders" (i.e., the factors
considered in determining the remuneration paid to the named executive
officerspersons most responsible for 1999, exceptextraordinary growth and
success at their companies, regardless of industry). The Committee believes
that with respect to the Compensation Agreement
with Mr. Brian L. Roberts, the Compensation Subcommittee relied on the
analysis of the Company's independentmost direct
28
competitors for executive talent are composed of a broader range of companies
than those with which the Company would ordinarily be compared for stock
performance purposes. Thus, the compensation consultant. See "Agreements
with Executive Officers--Compensation Agreement with Mr. Brian L. Roberts."comparison group included
companies that are not included in the peer group index in the stock
performance graph above.
Base Salary. The Company's philosophy with respect to setting base salary is
to compensate its executive officers with reasonable current income on a
competitive basis. The Compensation Subcommittee increased the base salary of the Chief Executive Officer increased by
5% in 19992000 pursuant to the terms of the 1998 Compensation Agreement. The base
salarysalaries of Mr.Messrs. Brian L. Roberts, was increased
by approximately 45% in connection with entering into the Compensation
Agreement, and based on the analysis of the Company's independent compensation
consultant. See "Agreements with Executive Officers--Compensation Agreement
with Mr. Brian L. Roberts." The base salaries of Messrs. Brodsky, Smith and Alchin were increased
by 5% each in 1999.2000. The base salaries of Messrs. Smith and Alchin were
increased pursuant to the terms of their employment agreements with the
Company. No specific objective measuresCompany in effect at the beginning of individual or corporate
performance2000, and, as of January 1, 2001, the
salaries of Messrs. Smith and Alchin were reviewedfurther increased in determining the base salary of executive officers
for 1999.
Bonuses.accordance with
their employment agreements effective May 31, 2000. In August 1996,entering into
employment agreements with Messrs. Smith and Alchin in 2000, the Compensation
Subcommittee adoptedconsidered its assessment of their performance, achievements and
increased responsibilities over the past decade.
Bonuses. Since 1996, annual cash bonuses for executive officers are
primarily determined under the shareholder-approved Executive Cash Bonus Plan, which was approved by the Company's shareholders on June 18,
1997, and in 1999 the Compensation Subcommittee amended the Executive Cash
Bonus Plan, which amendment was approved by the Company's shareholders on June
21, 1999.Plan.
Under the Executive Cash Bonus Plan, as amended, each executive designated by the
Compensation Subcommittee is eligible to earn an annual bonus of up to 150% of
his base salary and guaranteed bonus (the percentage applicable to each
executive as determined by the Compensation Subcommittee), but not more than
$3 million, based on annual cash flowCash Flow performance targets established in
advance by the Compensation Subcommittee. 21
Based on the Company's cash flowCash Flow for
such period, 100% of the target bonusesTarget Bonuses were earned for 19992000 under the plan.
The Target Bonus for each of the named executive officers was based on the
advice of an independent compensation consultant and the Compensation
Subcommittee's assessment of the optimal mix of base and incentive cash
compensation.
The Executive Cash Bonus Plan was adopted based on the recommendation of the
Company's independent compensation consultant and to satisfy the terms of the
Company's employment agreements then in effect with Messrs. Smith and Alchin.
The Compensation Subcommittee selected increases in cash flowCash Flow as the single
most significant measure of operating performance of the Company and other
companies in the Company's industries.
The bonus awarded to Mr. Smith for 1999 included an annual guaranteed bonus
of $5,788, in addition to the bonus awarded under the Executive Cash Bonus
Plan. The remaining bonuses earned by the named executive officers (other than the Chief Executive Officer and Mr.
Brodsky) also earned certain other bonuses in 19992000 which were related to the
termination of the Company's discretionarya prior cash bonus plan, as discussed below.
Equity-Based Incentive Compensation. The Company's equity-based incentive
compensation is in the form of stock option grants. The Compensation
Subcommittee believes that reliance upon such incentives is advantageous to
the Company because it fosters a long-term commitment by the recipients to the
Company and motivates these executives to seek to improve the long-term market
performance of the Company's stock. Stock options produce value to executives
only if the price of the Company's stock appreciates, thereby directly linking
the interests of the executives with those of itsthe Company's shareholders.
In 1999, theThe Compensation Subcommittee awarded stock options in 2000 to each of the
named executive officers. For executive officers other than Mr. Brian L.
Roberts,In general, such option grants were generally based on a
proportional relationship to the recipients' expected cash compensation of the option
recipients, taking into account prior option grants and were consistent with options grantedgrants made at the
same time to other members of senior managementexecutives of the Company. The
Compensation Subcommittee awarded Mr. Brian L. Roberts a grant of options to
purchase 4 million shares of the Company's Class A Special Common Stock asAs provided in the Compensation
Agreement, and as supported by the recommendation of its independent
compensation consultant and its review of Mr. Brian L. Roberts' achievements
on behalf of the Company over the previous five years.years prior to such time, Mr. Brian L.
Roberts received in 2000 grants of options to purchase an aggregate of
4,000,000 shares of the Company's Class A Special Common Stock. See
"Agreements with Executive Officers--CompensationOfficers--
29
Compensation Agreement with Mr. Brian L. Roberts." However, with respect to
the grant of options to purchase 1,000,000 shares made effective October 5,
2000, such options shall automatically convert to and become options to
purchase shares of the Company's Class B Common Stock in the event and at such
time as the shareholders may approve an amendment to the 1996 Stock Option
Plan permitting such conversion. In determining that such options could
convert to and become options to purchase shares of the Company's Class B
Common Stock, the Compensation Subcommittee noted that the transition of
control over the Class B Common Stock in 1997 from the Chief Executive Officer
to Mr. Brian L. Roberts had served the Company well and that there were
continuing significant benefits to the Company from the control by the Roberts
family over the vote of the Class B Common Stock. The Committee and the
Compensation Subcommittee determined that awarding options to purchase Class B
Common Stock would encourage Mr. Brian L. Roberts to retain such stock once
the options were exercised. The option grants to Messrs. Smith and Alchin were
awarded in connection with the execution by such executive officers of their
new employment agreements with the Company, and were generally based on a
proportional relationship to their expected cash compensation and were
consistent with options granted at the same time to other members of senior
management of the Company.
Equity Ownership Policy. In 1998, theThe Company's Board of Directors adoptedhas maintained a
minimum equity ownership policy since 1998, applicable to substantially all
executives of the Company with base salaries in excess of $150,000, as well as
to directors. Executives and directors subject to suchthe policy may not sell
shares of common stock of the Company unless, following such sale, they
continue to own at least an amount of suchthe common stock with a value equal to a
multiple of their annual base compensation from the Company. The Chief
Executive Officer, as well as Mr. Brian L. Roberts, the Company's President,
and all non-employee directors, are required to own stock with a value of five
times base compensation; other executives are required to own stock with a
value of one and one-half to four times their base compensation, depending on
base compensation. Based on their current base compensation, each of the other
named executive officers named in this Proxy Statement is required under the policy to own Company stock
with a value of between three and one-half and four times his base
compensation. For purposes of the policy, stock owned by an applicable
person's spouse and children, stock owned pursuant to the Company's 1997
Deferred Stock Option Plan and 60% of the value of an applicable person's
vested in-the-money stock options are considered owned by the applicable
person. In addition, upon the approval by the shareholders of the 2001
Employee Stock Purchase Plan, shares of stock purchased pursuant to the terms
of the 2001 Employee Stock Purchase Plan and deferred stockheld in a broker's account in the
Company's 1997 Deferred Stock Option Plan iswill
be considered owned by the applicable person. The Compensation Subcommittee
believes that such policy serves to align more fully the interests of
management under the Company's equity-based incentive compensation programs
with the interests of the Company's shareholders.
Compensation of Chief Executive Officer. The Company's by-laws do not
provide for a "Chief Executive Officer" of the Company. The Company has
determined that, for 1999,2000, Mr. Ralph J. Roberts, the Chairman of the Company's
Board of Directors, was its chief executive officer for purposes of this Proxy
Statement.
22
The Chief Executive Officer's compensation for 19992000 was determined under the
terms of the 1993 Compensation Agreement and the 1998 Compensation Agreement.
The 1993 Compensation Agreement was entered into effective September 9, 1993,
as amended March 16, 1994, and approved by the Company's shareholders on June
22, 1994.
See "Agreements with Executive Officers--Compensation Agreement with the Chief
Executive Officer." The levels of compensation provided under the 1993
Compensation Agreement and the 1998 Compensation Agreement were determined
when such agreements were entered into or amended based on a review by the
Committee and the Compensation Subcommittee and the Company's independent
compensation consultant of compensation levels of chief executive officers at
other companies in comparable industries and of certain chief executive
officers in other industries who, like Mr. Ralph J. Roberts, were founders of
companies and the persons primarily responsible for the growth of such
companies over a substantial period of time. The Committee and Compensation
Subcommittee also took into account its assessment of the importance of
maintaining the continued active participation of the Chief Executive Officer
in
30
the Company's affairs over the periodperiods covered by the 1993 Compensation
Agreement and the 1998 Compensation Agreement, the Company's growth and
overall performance during the ten years prior to 1993 and during the period
from 1993 to 1998, and the Chief Executive Officer's prior compensation levels
during those periods. The Committee and the Compensation Subcommittee did not
consider specific performance measures in approving the 1993 Compensation
Agreement and the 1998 Compensation Agreement, except to the extent that the
1993 Compensation Agreement provided for stock option grants in 1994 that were
inherently related to possible future appreciation in the Company's Common
Stock, and for bonuses and other compensation which replaced the Company's
discretionary bonus plan, which also related to appreciation in the value of
the Company's Common Stock over the period from 1986 through 1993.
SuchThe Chief Executive Officer's compensation in 2000 consisted of the salary
and benefits fixed by the 1998 Compensation Agreement, an award of options to
purchase 250,000 shares of Class A Special Common Stock, and additional split-
dollar life insurance benefits in an amount fixed in 1994. The split-dollar
life insurance benefits were originally awarded pursuant to the Company's
undertaking in the 1993 Compensation Agreement to replace the potential
benefits provided prior to 1994 by the
Company's terminated discretionarya bonus plan additional split-dollar life
insurancethat had been terminated, and
such benefits in an amount fixed in 1994 andwere generally calculated to produce the same after-tax cost to
the Company as the potential benefits to the Chief Executive Officer as of
March 15, 1994 under the terminated discretionary bonus plan with respect to appreciation in the
Chief Executive Officer's previously awarded nonqualified options prior to
March 15, 1994.plan. When such benefits were
awarded in 1994, the Company's compensation consultant reviewed the
calculation of the potential benefits provided by the terminated discretionary
bonus plan and of the expected after-
taxafter-tax cost of the additional split-dollar
life insurance benefits, and advised the Committee that its actions awarding
such benefits were appropriate and reasonable.
In connection withThe Compensation Subcommittee in 2000 also modified the terms of a variable
Death Benefit arrangement included in the 1998 Compensation Agreement, the
Compensation Subcommittee substituted the $31.2 millionAgreement. The
Death Benefit forhad replaced two bonus arrangements included in the 1993
Compensation Agreement that were based on appreciation of the Company's Class
A Common Stock from the date of grant to the date of exercise of the Chief
Executive Officer's options to purchase Class B Common Stock. The Compensation
Subcommittee determined that the after-
taxafter-tax present value cost to the Company
of the Death Benefit was $31.2 million, approximately equal to the cost of the
bonuses that would otherwise have been paid. Under the terms of the Death
Benefit, the Chief Executive Officer may request that the Company effectively
invest portions of the Death Benefit in investments identified by the Chief
Executive Officer. The formula under which the Death Benefit is calculated was
amended in 2000 to eliminate as of October 2000 an 8% interest-charge offset
on a $10.8 million portion of the Death Benefit, to the extent such portion
was so invested, which offset otherwise would have terminated at the earlier
of the Chief Executive's death or April 7, 2004. In making such modification,
the Compensation Subcommittee took account of the fact that, in light of the
Chief Executive Officer's continued health, the current actuarial value of the
Death Benefit, and thus its expected value as of 1998, is substantially lower
than was expected when the Death Benefit was amended in 1999created. The Compensation
Subcommittee believes that the change was consistent with the original purpose
of the Death Benefit to provide for a portion thereofvalue equivalent to vary
basedthat of the two bonus
arrangements which it replaced. The Compensation Subcommittee also took into
account that the Chief Executive Officer continued to contribute significant
efforts on the resultsbehalf of certain investments made by the Company in cooperation
withmatters of extreme importance to the
Company and its shareholders.
Compensation Related to Termination of Prior Cash Bonus Plan. Since 1994,
and continuing in 2000, certain compensation to the named executive officers
has related to the termination of a plan (approved by the Company's
shareholders in 1986) under which the Board of Directors awarded cash bonuses
to employees or directors exercising nonqualified options to reimburse such
persons for the income taxes payable by them upon exercise of the options and
receipt of the bonus. The Committee determined that this bonus plan did not
come within any of the exceptions to Section 162(m) of the Internal Revenue
Code, which became effective in 1994, and that if bonuses were to be awarded
under such plan in 1994 or thereafter, they might not be deductible. In
addition, in light of the appreciation in the Company's common stock over the
period from 1987 to 1993, the Board of Directors determined
31
that continuation of the bonus plan could impose significant cash burdens on
the Company in future years. Accordingly, the Board of Directors terminated
the bonus plan as of December 31, 1993. However, the Committee and
Compensation Subcommittee recognized at such time that each of the named
executive officers had a reasonable expectation of substantial future
compensation under the bonus plan at the suggestiontime it was terminated, and it
undertook to replace such compensation over a period of years in a manner
generally calculated to produce the same after-tax cost to the Company as the
potential benefits under the terminated bonus plan with respect to
appreciation in previously awarded nonqualified options prior to March 15,
1994. The Compensation Subcommittee has generally considered this compensation
to be payment of compensation which was essentially earned as of 1994, and
therefore has not taken it into account in assessing current compensation of
the named executive officers.
As part of the Committee's effort to replace the potential benefits provided
by the Company's terminated bonus plan, the Committee has awarded annual lump-
sum bonuses, or, in the case of the Chief Executive Officer, with no increase in
after-tax present value costas noted under
"Compensation of Chief Executive Officer," above, split-dollar life insurance
benefits, to the Company, except that the base amounteach of the Death Benefit was increased by $1.2 million upnamed executive officers. The Company's compensation
consultant advised the Committee that its actions to $31.2 million based on a
calculation ofterminate the benefits forgone bybonus plan
and award the substitute compensation described above were appropriate and
reasonable. The final such annual lump-sum bonuses were paid in 2000. The
Committee expects to continue to maintain the split-dollar life insurance
arrangements put in place for the Chief Executive Officer in return
for the Death Benefit. The Compensation Subcommittee was advised by the
Company's independent compensation consultant that all compensation provided
under the 1998 Compensation Agreement was appropriate.and Mr. Brodsky.
Effect of Internal Revenue Code Section 162(m). Effective January 1, 1994,
Section 162(m) of the Internal Revenue Code provides that certain compensation
in excess of $1 million paid to the chief executive officer and the four most
highly compensated executive officers of a public company (determined as of
the last day of the company's tax year) will not be deductible for federal
income tax purposes.
23
The Compensation Subcommittee engages in an ongoing review of the Company's
compensation practices for purposes of obtaining the maximum continued
deductibility of compensation paid by the Company consistent with its existing
commitments and ongoing competitive needs. Certain forms of compensation are
not included in determining whether the $1 million limit under Section 162(m)
has been exceeded, such as certain "performance-based" compensation adopted by
a committee of at least two outside directors and approved by shareholders,
compensation paid under binding written contracts (including nonqualified
stock options) in effect prior to the proposal of the new provision, and
compensation paid pursuant to certain plans approved by shareholders prior to
enactment of the new provision. These forms of compensation continue to be
deductible without regard to Section 162(m). In general, compensation pursuant
to nonqualified options granted to date under the Company's 1987 Stock Option
Plan and 1996 Stock Option Plan will continue to be deductible for federal
income tax purposes when the options are exercised, and bonuses awarded under
the Executive Cash Bonus Plan will be deductible when paid.
Certain compensation was awarded during 1999 after consideration of the
termination of a plan (approved by the Company's shareholders on September 17,
1986) under which the Board of Directors had discretion to award cash bonuses
to employees or directors exercising nonqualified options to reimburse such
persons for the income taxes payable by them upon exercise of the options and
receipt of the bonus. The Committee determined that the discretionary bonus
plan did not come within any of the exceptions to Section 162(m), and that if
bonuses were to be awarded under such plan in 1994 or thereafter, they might
not be deductible. In addition, in light of the appreciation in the Company's
Common Stock over the period from 1987 to 1993, the Board of Directors
determined that continuation of the bonus plan could impose significant cash
burdens on the Company in future years. Accordingly, the Board of Directors
terminated the discretionary bonus plan as of December 31, 1993.
As part of the Committee's ongoing effort to replace the potential benefits
provided by the Company's terminated discretionary bonus plan, the Committee
awarded lump-sum bonuses, or, in the case of the Chief Executive Officer,
split-dollar life insurance benefits, in an amount generally calculated
(together with similar compensation awarded in 1994 through 1996) to produce
the same after-tax cost to the Company as the potential benefits under the
terminated discretionary bonus plan with respect to appreciation in previously
awarded nonqualified options prior to March 15, 1994. The Company's
compensation consultant advised the Committee that its actions to terminate
the discretionary bonus plan and award the compensation described above were
appropriate and reasonable. The Committee expects to continue to maintain the
split-dollar life insurance arrangements put in place for the Chief Executive
Officer and Mr. Brodsky, and to continue paying cash bonuses for this purpose
(in addition to the bonuses awarded under the Executive Cash Bonus Plan) to
the other named executive officers in approximately the same amounts paid in
1994-1999.
The Compensation Subcommittee adopted the Executive Cash Bonus Plan to
conform to the requirements of Section 162(m) for deductibility of the bonus
payments awarded under such plan. See "Executive"Description of Executive Cash Bonus
Plan."Plan" under Proposal Four above.
With respect to the 1993 and 1998 Compensation Agreements, a portion of the
compensation paid to the Chief Executive Officer will not or may not be
deductible under Section 162(m) to the extent it is paid during the course of
his employment as an executive officer of the Company. The amount of
compensation paid to the Chief Executive Officer in 19992000 that is expected to
be nondeductible to the Company is approximately $864,000.$1,069,000. In addition,
approximately $647,000$658,000 of the compensation paid in 2000 to Mr. Brian L.
Roberts, the Company's President, is also expected to be nondeductible under
Section 162(m), due principally to the payment of amounts to cover premiums on
term life insurance policies and bonuses related to income tax liabilities
arising therefrom, the payment of amounts with respect to income tax
obligations arising upon the exercise of certain stock options and other
incidental
32
taxable fringe benefits, the fair market value of which was considered non-performance-basednon-
performance-based compensation for tax purposes in 1999.
24
2000.
The Compensation Subcommittee determined that the Company should provide the
above-described compensation regardless of its nondeductibility or potential
nondeductibility, based on, among other things, (1) its determination of a
fair and competitive compensation level for the officers involved taking into
account their contributions to the Company, which, in the case of the Chief
Executive Officer, extend over the entire course of the Company's history and
(2) the relatively minimal effect on the Company of forgoing deductibility of
the specific annual compensation in excess of $1 million.
Members of the Compensation Subcommittee
Gustave G. Amsterdam
Joseph L. Castle, II
Bernard C. Watson
Members of the Compensation Committee
Gustave G. Amsterdam (Chairman)
Sheldon M. Bonovitz
Joseph L. Castle, II
Bernard C. Watson
Compensation of Directors
Each member of the Board of Directors who is not an employee of the Company
(a "non-employee director") receives an annual fee of $35,000, plus $2,000 for
each meeting of the Board of Directors attended and $1,000 for each meeting of
any committee of the Board of Directors attended which is not held in
conjunction with a meeting of the Board of Directors. In addition, any non-
employee director who serves as the chairperson of a committee of the Board of
Directors receives an annual fee of $1,000. Each director is also reimbursed
for incidental travel expenses for meetings attended. Mr. Amsterdam also
receives $1,000 as compensation for each meeting attended as the designee of
the Board of Directors on a committee of the Company's management.
The Company's 1996 Stock Option Plan provides that each non-employee
director will be granted annually, on each February 1, an option to purchase
5,400 shares of Class A Special Common Stock (except that the first such grant
to a new non-employee director will be an option to purchase 9,000 shares) at
an exercise price per share equal to the fair market value of a share of Class
A Special Common Stock on the date of grant. Each such option becomes
exercisable six months after the date of grant and generally expires five
years from the date of grant. Effective January 1, 1999, non-employee
directors of the Company must continuously own shares of the Company's common
stock with a value at least equal to five times their base annual compensation
from the Company, including 60% of the value of vested, in-the-money stock
options and deferred stock accounts.
Certain Related Party Transactions
Mr. Bonovitz, a director of the Company, is Chairman and Chief Executive
Officer of the law firm of Duane, Morris & Heckscher LLP, which provides
services to the Company from time to time.
Compensation Committee Interlocks and Insider Participation
Mr. Bonovitz, a member of the Compensation Committee, is Chairman and Chief
Executive Officer of the law firm of Duane, Morris & Heckscher LLP, which
provides services to the Company from time to time. Mr. Bonovitz is not a
member of the Compensation Subcommittee, which, during 1999, performed
substantially all functions of the Compensation Committee with respect to
senior executives of the Company, including administration of the Company's
stock option and restricted stock plans, the bonus plans applicable to senior
executives of the Company, and approval of all agreements with the Chief
Executive Officer, Mr. Brian L. Roberts and others.
25
PROPOSAL ONE
ELECTION OF DIRECTORS
At the meeting, the shareholders will elect nine directors to hold office
for the ensuing year and until their respective successors have been duly
elected and qualified. Should any one or more of these nominees become
unavailable to accept nomination or election as a director, the persons named
in the enclosed proxy will vote the shares which they represent for the
election of such other persons as the Board of Directors may recommend, unless
the Board of Directors reduces the number of directors. Each of the nominees
currently is serving as a director of the Company.
The following sets forth certain information about each nominee:
Ralph J. Roberts, 80, has served as a director and Chairman of the Board of
Directors of the Company for more than five years. He is the President and a
director of Sural. Mr. Roberts devotes the major portion of his time to the
business and affairs of the Company. He is the father of Mr. Brian L. Roberts.
Mr. Roberts is also a director of Comcast Cable Communications, Inc., Comcast
LCI Holdings, Inc. and Comcast JOIN Holdings, Inc.
Julian A. Brodsky, 66, has served as a director and Vice Chairman of the
Board of Directors of the Company for more than five years. He serves as
Treasurer and a director of Sural. Mr. Brodsky devotes a substantial portion
of his time to the business and affairs of the Company. He is also a director
of RBB Fund, Inc., Internet Capital Group, Inc. and NDS Group PLC.
Brian L. Roberts, 40, has served as President of the Company and a director
for more than five years. He is a Vice President and a director of Sural. Mr.
Roberts devotes the major portion of his time to the business and affairs of
the Company. He is a son of Mr. Ralph J. Roberts. Mr. Roberts is also a
director of Comcast Cable Communications, Inc., Comcast LCI Holdings, Inc.,
Comcast JOIN Holdings, Inc., At Home Corporation and The Bank of New York
Company, Inc.
Gustave G. Amsterdam, 91, has been a director of the Company for more than
five years. Mr. Amsterdam was, for more than five years before his retirement,
Chairman of the Board of Bankers Securities Corporation, a mercantile, real
estate management and operating company.
Sheldon M. Bonovitz, 63, has been a director of the Company for more than
five years. Mr. Bonovitz has been a partner specializing in tax matters with
the law firm of Duane, Morris & Heckscher LLP for more than five years and is
currently Chairman and Chief Executive Officer of that firm. Mr. Bonovitz is
also a director of Surgical Laser Technologies, Inc. and Premier Research
Worldwide, Ltd.
Joseph L. Castle, II, 67, has been a director of the Company for more than
five years. Mr. Castle has been, for more than five years, a financial
consultant and is the Chairman and Chief Executive Officer and a director of
Castle Energy Corporation, an independent oil and gas exploration and
production company. Mr. Castle is also a director of Charming Shoppes, Inc.
Bernard C. Watson, 72, has been a director of the Company for more than five
years. Prior to his retirement in 1997, Dr. Watson was Chairman of the Board
of Directors of Health Management Alternatives Foundation from 1993 through
1997. Until 1993, he had been President and Chief Executive Officer of the
William Penn Foundation for more than five years.
Irving A. Wechsler, 79, has been a director of the Company for more than
five years. Mr. Wechsler is currently of counsel in the firm of Wechsler,
Wolsh and Associates, Certified Public Accountants, in Pittsburgh,
Pennsylvania, where he had previously been a partner for more than five years.
Anne Wexler, 70, has been a director of the Company for more than five years
and has been for more than five years Chairman of the Wexler Group, a
consulting firm specializing in government
26
relations and public affairs, which is an operating unit of Hill and Knowlton
Public Affairs Worldwide. Ms. Wexler is also a director of The Dreyfus
Corporation Index Funds, The Dreyfus Corporation Mutual Funds, New England
Electric System, and Wilshire Mutual Funds, Inc.
Committees and Meetings of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee. The Compensation Committee
has a Subcommittee on Performance-Based Compensation.
Messrs. Ralph J. Roberts (Chairman), Amsterdam, Bonovitz and Brian L.
Roberts serve as members of the Executive Committee, which held 11 meetings
during 1999. The Executive Committee acts for the directors in the intervals
between meetings of the Board of Directors.
Messrs. Amsterdam, Bonovitz, Brodsky, Castle, Watson and Wechsler (Chairman)
serve as members of the Audit Committee, which held six meetings during 1999.
The Audit Committee meets with the Company's independent public accountants,
counsel, internal audit department and management to discuss the scope and
results of the annual audit, internal accounting procedures and certain other
questions of accounting policy.
Messrs. Amsterdam, Castle and Watson serve as members of the Subcommittee on
Performance-Based Compensation of the Compensation Committee, which held four
meetings during 1999. The Compensation Subcommittee's functions include
responsibility for the Company's stock option, restricted stock and bonus
plans, establishing performance-based criteria and goals for compensation to
senior executive officers, and approving certain agreements with the Chief
Executive Officer and Mr. Brian L. Roberts. Messrs. Amsterdam (Chairman),
Bonovitz, Castle and Watson serve as members of the Compensation Committee,
which considers and determines all other compensation matters relating to the
Company's executive officers. The Compensation Committee held four meetings
during 1999, in conjunction with meetings of the Compensation Subcommittee.
Ms. Wexler (Chairperson) and Messrs. Castle and Watson serve as members of
the Nominating Committee, which held one meeting during 1999. The Nominating
Committee reviews the size and composition of the Board of Directors and is
responsible for recommending nominees to serve on the Board of Directors. In
carrying out its responsibilities, the Nominating Committee will consider
candidates recommended by other directors, employees and shareholders. Written
suggestions for candidates to serve as directors if nominated and elected
should be sent to the President of the Company at Comcast Corporation, 1500
Market Street, Philadelphia, Pennsylvania 19102-2148. The Company's by-laws
require that written notice of the intent to make a nomination at a meeting of
shareholders must be received by the President of the Company (a) with respect
to an election to be held at an annual meeting, not less than 90 days in
advance of the date which is the one year anniversary of the prior year's
annual meeting of shareholders, and (b) with respect to an election to be held
at a special meeting, the close of business on the seventh day following the
day on which notice of a special meeting of shareholders for the election of
directors is given to shareholders. The notice must contain: (a) the name and
address of the shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the shareholder
is a holder of record of the Company's stock entitled to vote at the meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the shareholder; (d) such
other information regarding each nominee proposed by such shareholder as would
have been required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had each nominee been
nominated, or
27
intended to be nominated, by the Board of Directors; and (e) the consent of
each nominee to serve as a director of the Company if so elected.
The Board of Directors held 11 meetings in 1999. No member of the Board of
Directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by
all committees of the Board of Directors on which such director served.
PROPOSAL TWO
TO APPROVE AN AMENDMENT TO THE
COMCAST CORPORATION 1996 STOCK OPTION PLAN
The Company's 1996 Stock Option Plan (the "1996 Plan") is the Company's sole
plan for awarding options to purchase shares of the Company's Class A Special
Common Stock to the Company's employees and non-employee directors. A
description of the terms of the 1996 Plan is provided below. The Company's
shareholders will vote at the meeting on a proposal to increase the maximum
aggregate number of shares for which options may be granted under the 1996
Plan from 40 million shares to 50 million shares.
Prior to April 14, 2000, the maximum number of shares of the Company's Class
A Special Common Stock for which options may be granted under the 1996 Plan
was limited to an aggregate of 40 million shares. On April 14, 2000, the
Compensation Subcommittee amended the 1996 Plan to increase the aggregate
number for which options may be granted under the 1996 Plan to 50 million
shares, subject to approval by the Company's shareholders at the 2000 Annual
Meeting of Shareholders.
Description of the 1996 Plan
The following is a summary of the material features of the 1996 Plan.
The 1996 Plan provides for the grant of options to purchase shares of the
Company's Class A Special Common Stock to employees (whether or not members of
the Board of Directors) of the Company and its parents or subsidiaries
("Affiliates") within the meaning of Sections 424(e) and (f) of the Internal
Revenue Code of 1986, as amended (the "Code"), as designated by the Company's
Board of Directors or a committee of two or more of its non-employee members
appointed by the Board of Directors, and for the grant of options to non-
employee directors of the Company. Except to the extent an option granted
under the 1996 Plan is specifically designated as a nonqualified option (as
defined below) or otherwise becomes a nonqualified option after grant, options
granted to employees of the Company or its Affiliates under the 1996 Plan are
intended to qualify as qualified stock options (sometimes hereinafter referred
to as "ISOs") within the meaning of Section 422(b) of the Code. Options
granted under the 1996 Plan to non-employee directors of the Company, options
granted to employees under the 1996 Plan which are specifically designated as
nonqualified options, and options otherwise ineligible for treatment as an ISO
are hereinafter referred to as "nonqualified options."
No Options may be granted under the 1996 Plan after March 12, 2006.
The purpose of the 1996 Plan is to assist the Company in retaining valued
employees, officers and directors by offering them a greater stake in the
Company's success and a closer identity with it, and to aid in attracting
individuals whose services would be helpful to the Company and would
contribute to its success.
28
ISOs and nonqualified options are sometimes hereinafter collectively
referred to as "Options." Recipients of Options are hereinafter referred to as
"Optionees." Shares of the Company's Class A Special Common Stock are
sometimes hereinafter referred to as "Shares." Shares which may be issued upon
exercise of Options are hereinafter referred to as "Option Shares." The 1996
Plan is currently administered by the Subcommittee on Performance-Based
Compensation of the Compensation Committee of the Board of Directors. This
subcommittee, or any other committee or subcommittee of the Board of Directors
administering the 1996 Plan, is sometimes referred to, with respect to the
1996 Plan, as the "Committee."
Eligibility
All employees of the Company and its Affiliates are eligible to receive ISOs
under the 1996 Plan. All employees, officers and non-employee directors of the
Company and its Affiliates are eligible to receive nonqualified options under
the 1996 Plan. An employee may receive more than one Option under the 1996
Plan but only on the terms and subject to the restrictions of the 1996 Plan.
In determining the eligible participants to whom Options are granted under
the 1996 Plan and the number of Shares covered by such Options, the Committee
may take into account the nature of such participant's services and
responsibilities, his or her present and potential contributions to the
Company's success and such other factors as the Committee may deem relevant.
The 1996 Plan provides that the maximum number of shares of the Class A
Special Common Stock for which Options may be issued to any single individual
in any calendar year is 10 million shares, subject to adjustment as described
under "Purchase of Shares Under the 1996 Plan" below. The 1996 Plan provides
that each non-employee director of the Company shall receive a grant of
Options to purchase 5,400 shares of Class A Special Common Stock on each
February 1, except that any non-employee director first elected to the Board
of Directors after March 13, 1996, shall receive a grant of Options to
purchase 9,000 shares of Class A Special Common Stock on such newly elected
director's election date. If such election date is less than 90 days before
the next February 1, the newly-elected director shall not be entitled to
receive Options to purchase 5,400 shares on that February 1.
Shares Covered By The 1996 Plan
On April 14, 2000, the Committee amended the 1996 Plan, subject to
shareholder approval at the meeting, to provide for the grant of Options to
purchase up to an aggregate of 50 million shares of the Company's Class A
Special Common Stock. Prior to such amendment, the maximum number of shares
was 40 million. If an Option granted under the 1996 Plan expires or terminates
without having been exercised in full, the Option Shares allocable to the
unexercised portion of such Option will be available for the grant of
additional Options under the 1996 Plan, to the extent additional Options
thereunder may be granted.
Administration
The 1996 Plan provides that it will be administered by any committee or
subcommittee designated by the Board of Directors of the Company, provided it
is composed of two or more non-employee members of the Board of Directors of
the Company, each of whom is an "outside director" within the meaning of the
Code. Currently, the Subcommittee on Performance-Based Compensation of the
Compensation Committee of the Board of Directors administers the 1996 Plan.
The Committee is authorized under the 1996 Plan to determine the Optionees
to whom and the times at which the Options are granted and become exercisable.
Subject to the provisions of the 1996 Plan, the Committee also is authorized
to determine the number of Shares issuable upon exercise of each Option and
other terms and conditions of the Option. In addition, the 1996 Plan provides
that the
29
Committee may determine whether an Option is intended to be an ISO. Under
certain circumstances, the Committee may have the power to accelerate or
extend the exercise date of outstanding Options. See "Amendments," "Methods of
Exercise" and "Termination" below.
The individual option document (the "Option Document") for each Option sets
forth the terms of such Option. The Option Documents are in such form as the
Committee shall from time to time approve. The interpretation and construction
by the Committee of any provision of the 1996 Plan, or of any Option Document,
is final, binding and conclusive.
Purchase of Shares Under the 1996 Plan
Under the 1996 Plan, the Committee sets forth in each Option Document the
exercise price for the Option Shares covered thereby (the "Option Price"),
provided that the Option Price of ISOs may not be less than 100% of the fair
market value of such Shares on the date or at the time that the Option is
granted. In addition, if an ISO is granted to an Optionee who then owns,
directly or by attribution under Section 424(d) of the Code, shares possessing
more than 10% of the total combined voting power of all classes of stock of
the Company or an Affiliate, the Option Price must be at least 110% of the
fair market value of such Shares on the date the Option is granted. The 1996
Plan provides that "fair market value" shall generally be determined based on
the last reported sale price of Shares on the last trading day prior to the
date on which such value is determined.
The number of Shares of Class A Special Common Stock for which Options may
be granted under the 1996 Plan, and the number of Shares of Class A Special
Common Stock issuable upon exercise of Options granted under the 1996 Plan,
and the exercise price for such Options, are subject to adjustment in the
event of a stock dividend, stock split or certain other capital adjustments.
No adjustment will be made in respect of the issuance of Shares on the
conversion of other securities of the Company that are convertible into such
class or classes of Shares.
Amendments
The Committee, with the consent of an Optionee, may amend the provisions of
Option Documents under the 1996 Plan. Under the 1996 Plan, consent of the
Optionee is not required for acceleration of the expiration date of an Option
in the event of the dissolution or liquidation of the Company or upon the
occurrence of certain other corporate transactions. See "Termination" below.
The Committee, with the consent of the Optionee, may amend the provisions of
the 1996 Plan to the extent necessary to maintain ISOs as qualified stock
options within the meaning of the Code.
The Committee may amend the 1996 Plan from time to time in such manner as it
may deem advisable. However, amendments to change the class of individuals
eligible to receive ISOs under the 1996 Plan, extend the expiration date of
the 1996 Plan, decrease the minimum Option Price of an ISO granted under the
1996 Plan or increase the maximum number of Shares for which Options may be
granted (other than as a result of adjustments in the event of a stock
dividend, stock split or certain other capital adjustments) are not effective
unless shareholder approval is obtained within twelve months before or after
such action. In addition, provisions of the 1996 Plan relating to grants of
Options to non-employee directors that determine (i) which directors are
granted Options pursuant to such provisions; (ii) the number of Shares subject
to Options granted under such provisions; (iii) the Option Price of such
Shares; and (iv) the timing of grants of Options pursuant to such provisions
may not be amended more than once every six months, other than to comport with
the Code or the Employee Retirement Income Security Act of 1974, if
applicable.
The power of the Board of Directors or the Committee to amend Option
Documents or the 1996 Plan may be subject to limitations contained in
applicable provisions of the Code and federal securities laws and regulations.
30
Methods of Exercise
An Option granted under the 1996 Plan may be exercised by the Optionee only
by written notice to the Company. The notice required under the 1996 Plan must
specify the number of Shares to be purchased and must be accompanied by
payment in full of the purchase price. Payment may be made in cash, by
certified check payable to the order of the Company, or by a combination of
the foregoing. In addition, if the Committee so provides in an Option
Document, payment may be made all or in part in shares of Class A Special
Common Stock or Class A Common Stock; provided, however, that the Option
Shares may not be paid for in shares of Class A Special Common Stock or Class
A Common Stock if such method of payment would result in liability under
Section 16(b) of the Securities Exchange Act of 1934, or if the Optionee does
not own as of the date the relevant option is exercised a number of shares
held for at least six months at least equal to the number of shares used to
pay the exercise price of the Option.
There is no limitation on the number of Shares an Optionee may acquire under
the 1996 Plan in any given year through the exercise of outstanding Options,
except as may be provided by the Committee in an Option Document.
Termination
The term during which an Option may be exercised is set out in the
individual Option Document, but may not exceed (i) ten years from the date of
grant or, (ii) with respect to ISOs, five years from the date of grant if the
Optionee on the date of grant owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of an Affiliate.
An Optionee's right to exercise any part of an Option granted pursuant to
the 1996 Plan terminates on the first to occur of: (i) expiration of the
Option term specified in the Option Document, which is subject to the
limitations described in the preceding paragraph; (ii) expiration of 90 days
from the date when the Optionee ceases to be an employee of the Company or an
Affiliate for any reason other than disability (as defined in Section 22(e)(3)
of the Code), death or a finding of the Committee that the employee has
breached his or her employment contract with, or has been engaged in any sort
of disloyalty to, or has disclosed trade secrets of, the Company or an
Affiliate, provided that the Committee may specify in an Option Document that
an Option may be exercisable during a longer period after the Optionee ceases
to be an employee, but in no event later than the expiration of the Option
term specified in the Option Document; (iii) expiration of one year from the
date the Optionee's employment with the Company or an Affiliate terminates as
a result of an Optionee's death or disability; (iv) the date set by the
Committee as an accelerated expiration date in the event of the dissolution or
liquidation of the Company or any other transaction in which an unaffiliated
third party acquires more than 50% of the voting power for election of
directors of the Company; or (v) the date of a finding by the Committee that
the Optionee has breached his or her employment contract with the Company or
an Affiliate (if such Optionee is an employee of the Company or an Affiliate),
has been engaged in any sort of disloyalty to the Company or an Affiliate,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his or her employment (if an
employee) or in the course of his or her service as a director (if a non-
employee director), or has disclosed trade secrets of the Company or an
Affiliate. In the event of such a finding by the Committee, in addition to
immediate termination of the Option, the Optionee, upon a determination by the
Committee, will forfeit all Option Shares for which the Company has not yet
delivered stock certificates representing the Option Shares, upon refund by
the Company of the exercise price of the Option.
31
Transferability of Options
In general, Options granted under the 1996 Plan are not transferable by the
Optionee except by will or by the laws of descent and distribution, and,
during the lifetime of the Optionee, Options may be exercised only by the
Optionee. However, the 1996 Plan provides that the Committee may, in its
discretion, provide in an Option Document or an amendment thereto that such
Options may be transferred to members of the Optionee's immediate family, or
trusts or partnerships the sole beneficiaries or partners of which are members
of the Optionee's immediate family or the Optionee, provided that such
transfer is without consideration. Any Options so transferred will remain
subject to all conditions applicable to the Options, as set forth in the 1996
Plan or the relevant Option Documents, except that the consent of the
transferee of the Options (rather than that of the original Optionee) will be
required in order to amend the transferred Options. See "Amendments" above.
Any Option which is made transferable to the extent provided in the 1996 Plan
will be a nonqualified option.
Cash Rights
The 1996 Plan provides that the Committee may, in its sole discretion, give
an Optionee the right to receive the value of any nonqualified Option in cash
upon exercise of the Option rather than to pay the exercise price of the
Option and receive Shares. Such rights must be attached to specific Options
and are subject to the same vesting, expiration and transferability terms as
the Options to which they are attached. Options and associated cash rights may
not be exercised separately.
Withholding of Taxes
Whenever the Company is required to deliver or transfer Shares of Class A
Special Common Stock in connection with the exercise of an Option under the
1996 Plan, the Company has the right to require the Optionee to remit or
otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such shares or to take
whatever action it deems necessary to protect its interests with respect to
tax liabilities in connection with the issuance of such shares.
Under the 1996 Plan, tax liabilities incurred in connection with the
exercise of an Option will be satisfied by the Company's withholding a portion
of the Option Shares underlying the Option that have a fair market value
approximately equal to the minimum amount of taxes required to be withheld by
the Company under applicable law, unless otherwise determined by the Committee
with respect to any Optionee. However, the Committee may permit an Optionee to
elect to have taxes withheld in excess of the minimum amount required to be
withheld by the Company (provided the Optionee certifies at the time of such
election that he or she has held for at least six months a number of Shares at
least equal to the number of all Option Shares withheld in excess of the
minimum amount), or to pay to the Company in cash all or a portion of the
taxes to be withheld upon the exercise of an Option. The Committee may add
such other requirements and limitations regarding these elections as it deems
appropriate.
Federal Income Taxation
The following discussion is intended to point out the general principles of
current federal income tax law applicable to the Options issued under the 1996
Plan.
Incentive Stock Options. For the purposes of the regular income tax
currently imposed under the Code, the holder of an Option under the 1996 Plan
which is an ISO will not recognize taxable income upon either the grant or
exercise of the Option.
The Optionee will recognize long-term capital gain or loss on a disposition
of the Option Shares acquired upon exercise of an ISO provided the Optionee
does not dispose of the Option Shares within
32
two years from the date the ISO was granted and within one year after the
Option Shares were transferred to the Optionee. For purposes of determining
such gain or loss, the Optionee's basis in such Shares will, in general, be
the Optionee's Option Price. Under present law, long-term capital gain is
subject to an effective tax rate of 20%, while ordinary income may be taxed at
a maximum effective rate of 39.6%. If the Optionee satisfies both of the
holding periods described above, then the Company will not be allowed a
deduction by reason of the exercise of the ISO.
The amount, if any, by which the fair market value of an Option Share at the
time of exercise (determined without regard to certain transfer restrictions)
exceeds the Option Price will be included in the computation of the Optionee's
"alternative minimum taxable income," generally in the year he or she
exercises the ISO, for purposes of the "alternative minimum tax" imposed by
Section 55 of the Code. If an Optionee pays alternative minimum tax, the
amount of such tax paid that is attributable to the exercise of ISOs will be
allowed as a credit against regular tax liability in subsequent years in which
the Optionee's regular tax liability (reduced by certain other tax credits)
exceeds his or her alternative minimum tax. Further, the Optionee's basis in
Option Shares acquired through exercise of an ISO will, for alternative
minimum tax purposes, equal the fair market value of the Option Shares taken
into account in determining the Optionee's alternative minimum taxable income.
As a general rule, if the Optionee disposes of the Option Shares before
satisfying the holding period requirements discussed above (a "disqualifying
disposition"), his or her gain recognized on the disqualifying disposition
will be taxed as ordinary income to the extent of the difference between the
fair market value of the Option Shares on the date of exercise and the
adjusted basis of the Option Shares (or, in certain cases, the excess of the
amount realized on disposition over the adjusted basis, if such excess is less
than the amount arrived at by the former calculation), and the Company will be
entitled to a deduction in that amount.
The gain (if any) in excess of the amount recognized as ordinary income on a
disqualifying disposition will be long-term or short-term capital gain,
depending upon the length of time the recipient held the Option Shares prior
to the disposition.
Optionees may be permitted to exercise ISOs by transferring to the Company
shares of the Company's Class A Special Common Stock or Class A Common Stock
then held by the Optionee ("Prior Shares") having a market value equal to the
Option Price of the Shares to be purchased (see "Methods of Exercise" above).
If the Optionee acquired the Prior Shares by exercise of an ISO and the
Optionee has not satisfied the holding period requirements described above for
the Prior Shares, then the transfer will be treated as a disqualifying
disposition by the Optionee of the Prior Shares. However, if the Optionee did
not acquire the Prior Shares by exercise of an ISO or if the Optionee has
satisfied the holding period requirements applicable to the Prior Shares, then
the Optionee will not recognize gain or loss upon the exchange. In that case,
the Optionee's basis and holding period (for purposes other than the Option
holding period rules) in the Prior Shares will carry over to a corresponding
number of Option Shares received. The Optionee's basis in any additional
Option Shares received will be zero and his or her holding period will begin
on the date the Optionee becomes the owner of such Shares.
If an Option granted under the 1996 Plan which is intended to be an ISO
fails to qualify as such under applicable rules and regulations of the Code,
such Option will be subject to the general principles of Federal income tax
law discussed below with respect to nonqualified options.
Nonqualified Options. For Federal income tax purposes, the holder of an
option that is not an ISO (a "nonqualified option") will not recognize taxable
income at the time of grant, and the Company will not be allowed a deduction
by reason of the grant of a nonqualified option. The Optionee will in general
recognize ordinary income upon exercise of the nonqualified option, in an
amount equal to the excess of the fair market value of the Option Shares
received at the time of exercise (including Option
33
Shares withheld by the Company to satisfy tax withholding obligations) over
the exercise price of the nonqualified option, and the Company will be allowed
a deduction in that amount.
Upon disposition of the Option Shares, the Optionee will recognize long-term
or short-term capital gain or loss, depending upon the length of time he or
she held the Option Shares prior to disposition. The amount of long-term or
short-term capital gain or loss recognized by the Optionee upon disposition of
the Option Shares will be an amount equal to the difference between the amount
realized on the disposition and the Optionee's basis in the Option Shares
(which basis is ordinarily the fair market value of the Option Shares on the
date the Option was exercised).
Optionees may be permitted to exercise nonqualified options by transferring
to the Company shares having a market value equal to the Option Price of the
Shares to be purchased (see "Methods of Exercise" above). In that case, no
income will be recognized on the receipt of a corresponding number of Option
Shares, and the Optionee's basis and holding period in the Prior Shares will
carry over to the corresponding number of Option Shares received. The
Optionee's basis in such additional Option Shares received will equal the
amount includable in the Optionee's income and his or her holding period will
begin on the date the Optionee becomes the owner of such shares.
Certain Optionees may be permitted to transfer nonqualified options to
members of their immediate family, or certain trusts or partnerships, without
consideration. See "Transferability of Options" above. In the case of any
nonqualified option so transferred, the original Optionee will recognize
income upon the exercise of the option by the transferee to the same extent as
if the original Optionee had exercised the option, and the Company's
concurrent deduction will also be the same. The transferee's basis and holding
period in the stock received upon exercise of the transferred option will be
the same basis and holding period as would have applied had the original
Optionee exercised the option in the same manner used by the transferee to
exercise the option.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE COMCAST CORPORATION 1996 STOCK OPTION PLAN.
PROPOSAL THREE
TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval by the shareholders, the Board of Directors, upon the
recommendation of the Audit Committee, has appointed the firm of Deloitte &
Touche LLP, which served as the Company's independent auditors for the last
fiscal year, to serve as the Company's independent auditors with respect to
the consolidated financial statements of the Company and its subsidiaries for
the current fiscal year.
A representative of Deloitte & Touche LLP is expected to be present at the
meeting and will have the opportunity to make a statement if he or she desires
to do so. The representative is also expected to be available to respond to
appropriate questions of shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE ABOVE PROPOSAL.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual Meeting of
Shareholders in 20012002 must be received by January 15, 20012, 2002 in order to be
considered for inclusion in the Company's proxy
34
statement and form of proxy
relating to that meeting. Shareholder proposals should be directed to Stanley L.
Wang, Executive Vice President and Secretary, at the address of the Company
set forth on the first page of this Proxy Statement. Notwithstanding the
foregoing, shareholders with suggestions on the nomination of directors must
comply with the procedures set forth under the caption "Committees and
Meetings of the Board of Directors."
A shareholder may wish to have a proposal presented at the Annual Meeting of
Shareholders in 2001,2002, but not to have such proposal included in the Company's
proxy statement and form of proxy relating to that meeting. Pursuant to
Section 2-9 of the Company's by-laws, notice of any such proposal must be
received by the Company between March 24, 20018, 2002 and April 23, 2001.7, 2002. If it is not
received during this period, such proposal shall be deemed "untimely" for
purposes of Rule 14a-4(c) under the Exchange Act, and, therefore, the proxies
will have the right to exercise discretionary voting authority with respect to
such proposal. Any such proposal should be directed to Stanley L. Wang, Executive
Vice President and Secretary, at the address of the Company set forth on the
first page of this Proxy Statement.
SOLICITATION OF PROXIES
The accompanying form of proxy is being solicited on behalf of the Board of
Directors of the Company. The expenses of solicitation of proxies for the
meeting will be paid by the Company. In addition to the mailing of the proxy
material, such solicitation may be made in person or by telephone or telegraph
by directors, officers or regular employees of the Company or its
subsidiaries.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
ITS MOST RECENT FISCAL YEAR. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO
"INVESTOR RELATIONS" AT THE ADDRESS OF THE COMPANY SET FORTH ON THE FIRST PAGE
OF THIS PROXY STATEMENT.
3533
AnnexANNEX A
[PROXY]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF
COMCAST CORPORATION
AUDIT COMMITTEE CHARTER
Adopted May 1, 2000
I. Purpose
The undersigned, a holder of Class A Common Stock of COMCAST CORPORATION (the
"Company"), hereby constitutes and appoints RALPH J. ROBERTS and STANLEY L.
WANG, and each of them acting individually, as the attorney and proxy of the
undersigned, with full power of substitution, for and in the name and stead of
the undersigned, to attend the Annual Meeting of Shareholders of the Company to
be held on Thursday, June 22, 2000 at 9:00 a.m. local time at the offices of the
Company, 1500 Market Street, West Tower, 9th Floor, Philadelphia, Pennsylvania,
and any adjournment or postponement thereof, and thereat to vote all shares of
Class A Common Stock which the undersigned would be entitled to vote if
personally present, as follows:
Unless otherwise specified, the shares will be voted "FOR" the election of
all nine nominees for director and "FOR" the other proposals set forth on the
reverse side. This Proxy also delegates discretionary authority to vote with
respect to any other business which may properly come before the meeting and any
adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K OF COMCAST CORPORATION.
(Continued and to be dated and signed on the reverse side)
If Casting Votes By Mail, Detach Here and Return Properly Executed Proxy Card in
Enclosed Postage-Prepaid Envelope
[logo of Comcast Corporation appears here] Comcast Corporation
P.O. Box 11059
New York, N.Y. 10203-0059
_______________________________
CONTROL NUMBER
FOR INTERNET VOTING
_______________________________
VOTE BY INTERNET
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET MAIL
http://www.eproxyvote.com/cmcsa Mark, sign and date your
proxy card and return it in the
postage-paid envelope we have
Use the Internet to vote your proxy. provided.
Have your proxy card in hand when If you have submitted your proxy
you access the website. You by the Internet there is no need for
will be prompted to you to mail back your proxy.
enter your control number,
located in the box above, to create
an electronic ballot.
Your Internet vote authorizes the named
proxies to vote your shares in the same
manner as if you marked, signed
and returned the proxy card.
You can vote via the Internet anytime prior to 5:00 p.m. eastern time
on June 21, 2000.
1. Election of nine Directors
[ ] FOR
[ ] WITHHELD
EXCEPT WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S)
WHOSE NAME(S) IS (ARE) LINED THROUGH. 01-Ralph J. Roberts, 02-Julian A. Brodsky,
03-Brian L. Roberts, 04-Gustave G. Amsterdam, 05-Sheldon M. Bonovitz, 06-Joseph
L. Castle, II, 07-Bernard C. Watson, 08-Irving A. Wechsler, and 09-Anne Wexler.
2. To approve an amendment to the Comcast Corporation 1996 Stock Option
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote on such other business which may properly come before the
meeting.
The signer hereby revokes all previous proxies given by the signer to vote at
the Annual Meeting or any adjournments thereof.
Change of Address and/or Comments mark here [ ]
NOTE: Please sign this Proxy exactly as name(s) appear(s) in address. When
signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your title as such, and if signer is a corporation, please sign with
full corporate name by duly authorized officer or officers and affix the
corporate seal. When stock is issued in the name of two or more persons, all
such persons should sign.
_________________________________
_________________________________
SIGNATURE(S) DATE
Annex B
-------
COMCAST CORPORATION
1996 STOCK OPTION PLAN
----------------------
(As Amended and Restated, Effective April 14, 2000)
1. Purpose of Plan
Theprincipal purpose of the PlanAudit Committee (the "Committee") is to assist
the Board of Directors (the "Board") in fulfilling its responsibility to
oversee management's conduct of the Company's financial reporting process by,
among other things, reviewing significant financial reports and other
financial information provided by the Company to any governmental or
regulatory body, the public or others, the Company's systems of internal
accounting and financial controls, and the annual independent audit of the
Company's financial statements.
In discharging its oversight role, the Committee is empowered to address any
matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside
counsel, outside auditors or other experts for this purpose.
The Committee shall review the adequacy of this Charter on an annual basis.
II. Membership
The Committee shall be comprised of no fewer than three members of the
Board, one of whom shall be appointed by the Board as the Committee's
chairperson. The Committee's composition shall meet the requirements of the
rules of the National Association of Securities Dealers, Inc., through its
Nasdaq Stock Market, Inc. ("Nasdaq") subsidiary. All of the members shall be
directors who, except as may otherwise be permitted under the Nasdaq rules,
have no relationship to the Company that may interfere with the exercise of
their independence from management and the Company. Each member of the
Committee shall be financially literate or become financially literate within
a reasonable period of time after appointment to the Committee, and at least
one member of the Committee shall have accounting or related financial
management expertise, as the foregoing qualifications are interpreted by the
Board in retaining valued
employees, officersits business judgment.
III. Key Responsibilities
The Committee is to serve in an oversight capacity and directorsis not intended to be
part of the Company's operational or managerial decision-making process. The
Company's management is responsible for preparing the Company's financial
statements and the outside auditors are responsible for auditing the financial
statements. Additionally, the Committee recognizes that the Company's
financial management, including the internal audit staff, as well as the
Company's outside auditors, have more time, knowledge and detailed information
concerning the Company than do Committee members; consequently, in carrying
out its oversight responsibilities, the Committee is not providing any expert
or special assurance as to the Company's financial statements or any
certification as to the outside auditors' work.
Consistent with the above, the Committee shall:
Provide an open avenue of communication among management, the internal
audit staff, the outside auditors and the Board.
Review with management and the outside auditors the audited financial
statements to be included in the Company's Annual Report on Form 10-K (or
the Annual Report to Shareholders, if distributed prior to the filing of
the Form 10-K) prior to their filing with the Securities and Exchange
Commission (or prior to such distribution, if earlier) and, in connection
therewith,
A-1
review and consider with the outside auditors the matters required to be
discussed by offering themStatement of Auditing Standards ("SAS") No. 61, as it may be
modified or supplemented.
Either on its own or through its chairperson, review with the outside
auditors, prior to the Company's filing of each quarterly report on Form
10-Q with the Securities and Exchange Commission, the Company's interim
financial statements to be included in such Form 10-Q and the matters
required to be discussed by SAS No. 71, as it may be modified or
supplemented.
Discuss with management, the internal audit staff, and the outside
auditors the quality and adequacy of the Company's internal accounting and
financial controls.
Receive from the outside auditors annually a greaterformal written statement
delineating all relationships between the outside auditors and the Company
consistent with Independence Standards Board Standard No. 1.
Discuss with the outside auditors any disclosed relationships or services
contained in the formal written statement received from the outside
auditors that may impact the objectivity and independence of the outside
auditors.
Take, or recommend that the Board take, appropriate action to oversee the
independence of the outside auditors.
The outside auditors are ultimately accountable to the Board and the
Committee, as representatives of the Company's shareholders, and these
shareholder representatives have the ultimate authority and responsibility to
select, evaluate, and, where appropriate, replace the outside auditors (or to
nominate the outside auditors to be proposed for shareholder approval in any
proxy statement).
A-2
COMCAST CORPORATION
2001 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The Comcast Corporation 2001 Employee Stock Purchase Plan (the "Plan") is
intended to encourage and facilitate the purchase of Shares of the Class A
Special Common Stock of Comcast Corporation (the "Company"), by Eligible
Employees of the Company and any Participating Companies, thereby providing such
Eligible Employees with a personal stake in the Company's successCompany and a closer identity with it, andlong range
inducement to aidremain in attracting
individuals whose services would be helpful tothe employ of the Company and would contributeParticipating Companies.
It is the intention of the Company that the Plan qualify as an "employee stock
purchase plan" within the meaning of section 423 of the Code.
2. Definitions.
(a) "Account" means a bookkeeping account established by the Committee on
behalf of a Participant to its success.
2. Definitions
(a)hold Payroll Deductions.
(b) "Affiliate" means, with respect to any Person, any other
--------- Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, the term "control,"
including its correlative terms "controlled by" and "under common control with,"
mean, with respect 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, by contract or
otherwise.
(b)(c) "Board" means the boardBoard of directorsDirectors of the Sponsor.
-----
(c) "Cash Right"Company.
(d) "Brokerage Account" means any right to receive cash in lieu of
----------
Shares grantedthe brokerage account established under the
Plan and described in Paragraph 3(a)(iii).
(d) "Cause" means:
-----
(i) for an employee of a Company, a finding by the Committee, after full consideration ofCompany for each Participant, to which Shares purchased under the
facts presented on behalf of
both the Company and the employee, that the employee has breached his
employment contract with a Company, has disclosed trade secrets of a
Company or has been engaged in any sort of disloyalty to a Company,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his employment.
(ii) for a Non-Employee Director, a finding by the
Committee, after full consideration of the facts presented on behalf of
both the Company and the Director, that such Non-Employee Director has
disclosed trade secrets of a Company, or has been engaged in any sort of
disloyalty to a Company, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the
course of his service as a Non-Employee Director.
Plan shall be credited.
(e) "Change of Control" means any transaction or series of
----------------- transactions as
a result of which any Person who was a Third Party immediately before such
transaction or series of transactions owns then-outstanding securities of the
SponsorCompany having more than 50 percent of the voting power for the election of
directors of the Sponsor.Company.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
----
(g) "Comcast Plan" means any restricted stock, stock bonus,
------------
stock option or other compensation plan, program or arrangement established or
maintained by the Company or an Affiliate, including but not limited to this
Plan, the Comcast Corporation 1997 Deferred Stock Option Plan, the Comcast
Corporation 1990 Restricted Stock Plan and the Comcast Corporation 1987 Stock
Option Plan.
(h) "Committee" means the committee described in Paragraph 5.
---------
(i) "Common Stock" meansCompensation Committee of the Sponsor's Class A Special Common
------------
Stock, par value, $1.00.
(j)Board.
(h) "Company" means the Sponsor and eachComcast Corporation.
(i) "Compensation" means an Eligible Employee's wages as reported on Form
W-2 (i.e., wages as defined in section 3401(a) of the Parent Companies
-------Code and Subsidiary Companies.
(k) "Dateall other
payments of Grant" meanscompensation for
which the date as of which an OptionParticipating Company is -------------
granted.
(l) "Disability" meansrequired to furnish the employee a disability within the meaning of
----------
section 22(e)written
statement under sections 6041(d) and 6051(a)(3) of the Code) from a
Participating Company, reduced by reimbursements or other expense allowances,
fringe benefits (cash and noncash), moving expenses, deferred compensation, and
welfare benefits, but including salary reduction contributions and elective
contributions that are not includible in gross income under sections 125 or
402(a)(8) of the Code.
(m)(j) "Election Date"Form" means the date onwritten or electronic form acceptable to the
Committee which an individual is
-------------
first electedEligible Employee shall use to make an election to purchase
Shares through Payroll Deductions pursuant to the Board as a Non-Employee Director, orPlan.
(k) "Eligible Employee" means an Employee who is elected tonot an Ineligible
Employee.
(l) "Eligible Employer" means the Board as a Non-Employee Director following a period of one year or more during
which such individual was not a memberCompany and any subsidiary of the
Board.
(n) "Fair Market Value." If Shares are listed on a stock
-----------------
exchange, Fair Market Value shall be determined based on the last reported sale
price of a Share on the principal exchange on which Shares are listed on the
last trading day prior to the date of determination, or, if Shares are not so
listed, but trades of Shares are reported on the Nasdaq National Market, the
last quoted sale price of a Share on the Nasdaq National Market on the last
trading day prior to the date of determination.
(o) "Grant Date" means each February 1st after the date of
----------
adoption of the Plan by the Board.
-2-
(p) "Immediate Family" means an Optionee's spouse and lineal
----------------
descendants, any trust all beneficiaries of which are any of such persons and
any partnership all partners of which are any of such persons.
(q) "Incentive Stock Option" means an Option granted under the
----------------------
Plan, designated by the Committee at the time of such grant as an Incentive
Stock OptionCompany, within the meaning of section 422424(f) of the Code and containing the
terms specified herein for Incentive Stock Options; provided, however, that to
-----------------
the extent an Option granted under the Plan and designated by the Committee at
the time of grant as an Incentive Stock Option fails to satisfy the requirements
for an incentive stock option under section 422 of the Code for any reason, such
Option shall be treated asCode.
(m) "Employee" means a Non-Qualified Option.
(r) "Non-Employee Director" means an individualperson who is a member
---------------------
of the Board, and who is not an employee of a Company, including an individual
who is a memberParticipating
Company.
(n) "Fair Market Value" means the closing price per Share on the principal
national securities exchange on which the Shares are listed or admitted to
trading or, if not listed or traded on any such exchange, on the National Market
System of the Board and who previously was an employeeNational Association of a Company.
(s) "Non-Qualified Option" means:
--------------------
(i) an Option granted underSecurities Dealers Automated Quotation
System ("NASDAQ"), or if not listed or traded on any such exchange or system,
the Plan, designatedfair market value as reasonably determined by the Committee at the time of such grant as a Non-Qualified Option and
containing the terms specified herein for Non-Qualified Options; and
(ii) an Option granted under the Plan and designated byBoard or the Committee,
at the time of grant aswhich determination shall be conclusive.
(o) "Five Percent Owner" means an Incentive Stock Option,Employee who, with respect to the
extent such Option fails to satisfy the requirements for an incentive stock
option undera
Participating Company, is described in section 422423(b)(3) of the Code for any reason.
(t) "Option"Code.
(p) "Ineligible Employee" means any stock option granted under the Plan and
------
described in either Paragraph 3(a)(i) or Paragraph 3(a)(ii).
(u) "Optionee" means a person to whom an Option has been granted
--------
under the Plan, which Option has not been exercised in full and has not expired
or terminated.
(v) "Other Available Shares" means,Employee who, as of any date, the excess,
----------------------
if any of:
(i) the total number of Shares ownedan Offering
Commencement Date:
(1) Is a Five Percent Owner;
(2) Has been continuously employed by an Optionee; over
(ii) the sum of:
(a) the number of Shares owned by such Optioneea Participating Company on a
full-time basis for less than six months; plus
-3-
(b) the number of Shares owned90 days;
(3) Has been continuously employed by such Optionee that
has, within the preceding six months, been the
subject of a withholding certification pursuant toParticipating Company on a
part-time basis for less than one year; or
(4) Is restricted from participating under Paragraph 16(b) or any similar withholding
certification under any other Comcast Plan; plus
(c) the number of Shares owned by such Optionee that
has, within the preceding six months, been
received in exchange for Shares surrendered as
payment, in full or in part,3(b) of the exercise price
for an option to purchase any securities of the
Sponsor or an Affiliate under any Comcast Plan,
but only to the extent of the number of Shares
surrendered; plus
(d) The number of Shares owned by such Optionee as to
which evidence of ownership has, within the
preceding six months, been provided to the Company
in connection with the crediting of "Deferred
Stock Units" to such Optionee's Account under the
Comcast Corporation 1997 Deferred Stock Option Plan.
For purposes of this Paragraph 2(v)2(p), an Employee is employed on a Share that is subject to a deferral
election pursuant to another Comcast Plan shall not be treated as owned by an
Optionee until all conditions topart-time
basis if the delivery of such Share have lapsed.Employee customarily works less than 20 hours per week. For
purposes of Paragraphs 7(d)this Paragraph 2(p),
8(d)
an Employee is employed on a full-time basis if the Employee customarily works
20 or more hours per week.
(q) "Offering" means an offering of Shares by the Company to Eligible
Employees pursuant to the Plan.
(r) "Offering Commencement Date" means the first day of each January 1,
April 1, July 1 and 16(b),October 1 beginning on or after Offerings are authorized by
the numberBoard or the Committee, until the Plan Termination Date.
(s) "Offering Period" means the period extending from an Offering
Commencement Date through the following Offering Termination Date.
(t) "Offering Termination Date" means the last day of Other Available
Shares shall be determined separately foreach March, June,
September and December following an Offering Commencement Date, or such other
Offering Termination Date established in connection with a Terminating Event.
(u) "Participant" means an Eligible Employee who has timely delivered an
Election Form to the Sponsor's ClassCommittee in accordance with procedures established by the
Committee.
(v) "Participating Company" means, as provided in Schedule A Special Common
Stock, par value, $1.00, and forto the Sponsor's Class A Common Stock, par value,
$1.00.Plan,
the Eligible Employers, if any, that are approved by the Board or the Committee
from time to time.
(w) "Outside Director""Payroll Deductions" means amounts withheld from a memberParticipant's
Compensation pursuant to the Plan, as described in Paragraph 5 of the Board who is an
----------------
"outside director" within the meaning of section 162(m)(4)(C) of the Code and
applicable Treasury Regulations issued thereunder.Plan.
(x) "Parent Company" means all corporations that, at the time in
--------------
question, are parent corporations of the Sponsor within the meaning of section
424(e) of the Code.
(y) "Person" means an individual, a corporation, a partnership,
------ an
association, a trust or any other entity or organization.
(z)(y) "Plan" means the Comcast Corporation 19962001 Employee Stock OptionPurchase Plan,
as set forth in this document, and as may be amended from time to time.
(z) "Plan Termination Date" means the earlier of:
(1) The Offering Termination Date for the Offering in which the
maximum number of Shares specified in Paragraph 9 of the Plan have been issued
pursuant to the Plan; or
(2) The date as of which the Board or the Committee chooses to
terminate the Plan as provided in Paragraph 14 of the Plan.
----
-4-(aa) "Purchase Price" means 85 percent of the lesser of: (1) the Fair
Market Value per Share on the Offering Commencement Date, or if such date is not
a trading day, then on the next trading day thereafter or (2) the Fair Market
Value per Share on the Offering Termination Date,
(aa)or if such date is not a trading day, then on the trading day immediately
preceding the Offering Termination Date.
(bb) "Roberts Family." Each of the following is a member of the --------------
Roberts
Family:
(i)(1) Brian L. Roberts;
(ii)(2) a lineal descendant of Brian L. Roberts; or
(iii)(3) a trust established for the benefit of any of Brian L. Roberts
and/or a lineal descendant or descendants of Brian L. Roberts.
(bb) "Share" or(cc) "Shares" means:
----- ------
(i) for all purposes of the Plan, a share or shares of
Common Stock or such other securities issued by the Sponsor as may be the
subject of an adjustment under Paragraph 11.
(ii) solely for purposes of Paragraphs 2(n), 2(v),
7(d), 8(d) and 16(b), the term "Share" or "Shares" also means a share or shares of the Sponsor'sCompany's Class A Special Common Stock,
par value, $1.00.
(cc) "Sponsor"(dd) "Successor-in-Interest" means Comcast Corporation, a Pennsylvania
-------
corporation, including any successor theretothe Participant's executor or
administrator, or such other person or entity to whom the Participant's rights
under the Plan shall have passed by merger, consolidation,
acquisitionwill or the laws of all or substantially all the assets thereof, or otherwise.
(dd) "Subsidiary Companies" means all corporations that, at the
--------------------
time in question, are subsidiary corporations of the Sponsor within the meaning
of section 424(f) of the Code.descent and
distribution.
(ee) "Ten Percent Shareholder" means a person who on the Date of
-----------------------
Grant owns, either directly or within the meaning of the attribution rules
contained in section 424(d) of the Code, stock possessing more than 10% of the
total combined voting power of all classes of stock of his employer corporation
or of its parent or subsidiary corporations, as defined respectively in sections
424(e) and (f) of the Code, provided that the employer corporation is a Company.
(ff) "Terminating Event" means any of the following events:
-----------------
(i)(1) the liquidation of the Sponsor;Company; or
(ii)(2) a Change of Control.
-5-
(gg)(ff) "Third Party" means any Person, other than a Company,
----------- together with such Person's
Affiliates, provided that the term "Third Party" shall not include the Sponsor,Company,
an Affiliate of the SponsorCompany or any member or members of the Roberts Family.
(hh) "1933 Act"(gg) "Termination Form" means the Securities Actwritten or electronic form acceptable to
the Committee which an Employee shall use to withdraw from an Offering pursuant
to Paragraph 7 of 1933, as amended.
--------
(ii) "1934 Act" means the Securities Exchange ActPlan.
3. Eligibility and Participation.
(a) Eligibility. Except to the extent participation is restricted under
Paragraph 3(b), each Eligible Employee shall be eligible to participate in the
Plan.
(b) Restrictions on Participation. Notwithstanding any provisions of 1934, as
--------
amended.
3. Rights To Be Granted
(a) Types of Options and Other Rights Available for Grant.
-----------------------------------------------------
Rights that may be granted under the
Plan are:
(i) Incentive Stock Options,to the contrary, no Employee shall be eligible to purchase Shares in an
Offering to the extent that:
(1) Immediately after the purchase of Shares, such Employee would be a
Five Percent Owner; or
(2) A purchase of Shares would permit such Employee's rights to
purchase stock under all employee stock purchase plans of the Participating
Companies which givemeet the requirements of section 423(b) of the Code to accrue at
a rate which exceeds $25,000 in fair market value (as determined pursuant to
section 423(b)(8) of the Code) for each calendar year in which such right to
purchase Shares is outstanding.
(c) Commencement of Participation. An Eligible Employee shall become a
Participant by completing an Optionee
who is an employeeElection Form and filing it with the Committee on
or before the 15th day of a Company the rightmonth immediately preceding the Offering
Commencement Date for the first Offering to which such Election Form applies.
Payroll Deductions for a specified timeParticipant shall commence on first payroll period
to
purchase a specified number of Sharesending after the applicable Offering Commencement Date when his or her
authorization for a price not less than the Fair
Market ValuePayroll Deductions becomes effective, and shall end on the
Plan Termination Date, of Grant;
(ii) Non-Qualified Options, which give the Optionee
the right for a specified time period to purchase a specified number of
Shares for a price determinedunless sooner terminated by the Committee; and
(iii) Cash Rights, which give an OptioneeParticipant pursuant to
Paragraph 7 of the right
for a specified time period, and subject to such conditions, if any, asPlan.
4. Shares Per Offering.
The Plan shall be determinedimplemented by a series of Offerings that shall commence
after Offerings have been authorized by the Board or the Committee, and
stated interminate on the option document, to
receive a cash payment of such amount per Share asPlan Termination Date. Offerings shall be determinedmade with respect to
Compensation accumulated during each Offering Period for the period commencing
with the first day of the first Offering Period (when such Offering Period is
authorized by the CommitteeBoard or the Committee) and stated inending with the option document, in lieu of exercising a
Non-Qualified Option.
(b) Limit on Grant of Options. ThePlan Termination
Date. Shares available for any Offering shall be the difference between the
maximum number of Shares for
-------------------------
which Optionsthat may be grantedissued under the Plan, as determined
pursuant to Paragraph 8(a) of the Plan, for all of the Offerings, less the
actual number of Shares purchased by Participants pursuant to prior Offerings.
If the total number of Shares subject to purchase under the Plan on any single individualOffering
Termination Date exceeds the maximum number of Shares available, the Board or
the Committee shall make a pro rata allocation of Shares available for delivery
and distribution in as nearly a uniform manner as practicable, and as it shall
determine to be fair and equitable, and the unapplied Account balances shall be
returned to Participants as soon as practicable following the Offering
Termination Date.
5. Payroll Deductions.
(a) Amount of Payroll Deductions. On the Election Form, an Eligible
Employee may elect to have Payroll Deductions of not more than 10 percent of
Compensation earned for each payroll period ending within the Offering Period,
subject to the limitation that the maximum amount of Payroll Deductions for any
Eligible Employee for any calendar year adjustedshall not exceed $10,000. The rules
established by the Committee regarding Payroll Deductions, as reflected on the
Election Form, shall be consistent with section 423(b)(5) of the Code.
(b) Participants' Accounts. All Payroll Deductions with respect to a
Participant pursuant to Paragraph 5(a) of the Plan shall be credited to the
Participant's Account under the Plan.
(c) Changes in Payroll Deductions. A Participant may discontinue his
participation in the Plan as provided in Paragraph 11,7(a) of the Plan, but no
other change can be made during an Offering, including, but not limited to,
changes in the amount of Payroll Deductions for such Offering. A Participant may
change the amount of Payroll Deductions for subsequent Offerings by giving
written notice (or notice in another form pursuant to procedures established by
the Committee) of such change to the Committee on or before the 15th day of the
month immediately preceding the Offering Commencement Date for the Offering for
which such change is effective.
6. Purchase of Shares.
(a) In General. On each Offering Termination Date, each Participant shall
be 10,000,000 Shares.
(c) Presumptiondeemed to have purchased a number of Incentive Stock Option Status. Each Option
--------------------------------------------
grantedwhole Shares equal to the quotient
obtained by dividing the balance credited to the Participant's Account as of the
Offering Termination Date, by the Purchase Price, rounded to the next lowest
whole Share. Shares deemed purchased by a Participant under the Plan shall be
credited to the Participant's Brokerage Account as soon as practicable following
the Offering Termination Date.
(b) Terminating Events. The Company shall give Participants at least 30
days' notice (or, if not practicable, such shorter notice as may be reasonably
practicable) prior to the anticipated date of the consummation of a Terminating
Event. The 20th day following the issuance of such notice by the Company (or
such earlier date as the Board or the Committee may reasonably determine) shall
constitute the Offering Termination Date for any outstanding Offering.
(c) Fractional Shares and Minimum Number of Shares. Fractional Shares shall
not be issued under the Plan. Amounts credited to an employeeAccount remaining after the
application of such Account to the purchase of Shares under the Plan shall be
credited to the Participant's Account for the next succeeding Offering, or, at
the Participant's election, returned to the Participant as soon as practicable
following the Offering Termination Date, without interest.
(d) Transferability of Rights to Purchase Shares. No right to purchase
Shares pursuant to the Plan shall be transferable other than by will or by the
laws of descent and distribution, and no such right to purchase Shares pursuant
to the Plan shall be exercisable during the Participant's lifetime other than by
the Participant.
7. Withdrawals.
(a) Withdrawal of Account. A Participant may elect to withdraw the balance
credited to the Participant's Account by providing a Termination Form to the
Committee at any time before the Offering Termination Date applicable to any
Offering.
(b) Notification of Withdrawal. A Participant may withdraw all, but not
less than all, of the amounts credited to the Participant's Account by
delivering a Termination Form to the Committee at least 10 days preceding the
Offering Termination Date. All amounts credited to such Participant's Account
shall be paid as soon as practicable following the Committee's receipt of the
Participant's Termination Form, and no further Payroll Deductions will be made
with respect to the Participant. A Participant who elects to withdraw from an
Offering pursuant to Paragraph 7(a) of the Plan shall not be eligible to
participate in the Offering next following the date on which the Participant
delivers a Termination Form to the Committee.
(c) Termination of Employment. Upon termination of a Company is intendedParticipant's
employment for any reason other than death, including termination due to
disability or continuation of an approved leave of absence beyond the Offering
Period which commenced prior to beginning of an approved leave of absence, all
amounts credited to such Participant's Account shall be an
Incentive Stock Option, exceptreturned to the
extentParticipant. In the event of a Participant's (1) termination of employment due
to death or (2) death after termination of employment but before the
Participant's Account has been returned, all amounts credited to such
Participant's Account shall be returned to the Participant's Successor-in-
Interest.
8. Interest.
No interest shall be paid or allowed with respect to Payroll Deductions
paid into the Plan or credited to any such grant would exceed the
limitationParticipant's Account.
9. Shares.
(a) Maximum Number of Paragraph 9 and except for any Option specifically designated at
the time of grant as an Option that is not an Incentive Stock Option.
4. Shares Subject to PlanShares; Adjustments. Subject to adjustment as
provided in this Paragraph 11,9, not more than 50,000,0004,250,000 Shares in the aggregate
may be issued pursuant to the Plan upon
exercise of Options.pursuant to Offerings under the Plan. Shares
-6-
delivered pursuant to the exercise of an OptionPlan may, at the Sponsor'sCompany's option, be either treasury
Shares or Shares originally issued for such purpose. If an
Option covering Shares terminates or expires without having been exercised in
full, other Options may be granted covering the Shares as to which the Option
terminated or expired.
5. Administration of Plan
(a) Committee. The Plan shall be administered by the
---------
Subcommittee on Performance Based Compensation of the Compensation Committee of
the Board or any other committee or subcommittee designated by the Board,
provided that the committee administering the Plan is composed of two or more
non-employee members of the Board, each of whom is an Outside Director.
Notwithstanding the foregoing, if Non-Employee Directors are granted Options in
accordance with the provisions of Paragraph 8, the directors to whom such
Options will be granted, the timing of grants of such Options, the Option Price
of such Options and the number of Option Shares included in such Options shall
be as specifically set forth in Paragraph 8. No member of the Committee shall
participate in the resolution of any issue that exclusively involves an Option
granted to such member.
(b) Meetings. The Committee shall hold meetings at such times
--------
and places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.
(c) Exculpation. No member of the Committee shall be personally
-----------
liable for monetary damages for any action taken or any failure to take any
action in connection with the administration of the Plan or the granting of
Options thereunder unless (i) the member of the Committee has breached or failed
to perform the duties of his office, and (ii) the breach or failure to perform
constitutes self-dealing, wilful misconduct or recklessness; provided, however,
-----------------
that the provisions of this Paragraph 5(c) shall not apply to the responsibility
or liability of a member of the Committee pursuant to any criminal statute.
(d) Indemnification. Service on the Committee shall constitute
---------------
service as a member of the Board. Each member of the Committee shall be
entitled without further act on his part to indemnity from the Sponsor to the
fullest extent provided by applicable law and the Sponsor's By-laws in
connection with or arising out of any actions, suit or proceeding with respect
to the administration of the Plan or the granting of Options thereunder in which
he may be involved by reasons of his being or having been a member of the
Committee, whether or not he continues to be such member of the Committee at the
time of the action, suit or proceeding.
-7-
6. Eligibility
(a) Eligible individuals to whom Options may be granted shall be
employees, officers or directors of a Company who are selected by the Committee
for the grant of Options. Eligible individuals to whom Cash Rights may be
granted shall be individuals who are employees of a Company on the Date of
Grant. The terms and conditions of Options granted to individuals other than
Non-Employee Directors shall be determined by the Committee, subject to
Paragraph 7. The terms and conditions of Cash Rights shall be determined by the
Committee, subject to Paragraph 7. The terms and conditions of Options granted
to Non-Employee Directors shall be determined by the Committee, subject to
Paragraph 8.
(b) An Incentive Stock Option shall not be granted to a Ten
Percent Shareholder except on such terms concerning the option price and term as
are provided in Paragraph 7(b) and 7(g) with respect to such a person. An Option
designated as Incentive Stock Option granted to a Ten Percent Shareholder but
which does not comply with the requirements of the preceding sentence shall be
treated as a Non-Qualified Option. An Option designated as an Incentive Stock
Option shall be treated as a Non-Qualified Option if (i) the Optionee is not an
employee of a Company on the Date of Grant or (ii) the only Company by which the
Optionee is employed on the Date of Grant is an entity described in Paragraph
2(dd)(ii).
7. Option Documents and Terms - In General
All Options granted to Optionees other than Non-Employee Directors
shall be evidenced by option documents. The terms of each such option document
shall be determined from time to time by the Committee, consistent, however,
with the following:
(a) Time of Grant. All Options shall be granted within 10 years
-------------
from the earlier of (i) the date of adoption of the Plan by the Board, or (ii)
approval of the Plan by the shareholders of the Sponsor.
(b) Option Price. The option price per Share with respect to any
------------
Option shall be determined by the Committee, provided, however, that with
-----------------
respect to any Incentive Stock Options, the option price per share shall not be
less than 100% of the Fair Market Value of such Share on the Date of Grant, and
provided further that with respect to any Incentive Stock Options granted to a
- ----------------
Ten Percent Shareholder, the option price per Share shall not be less than 110%
of the Fair Market Value of such Share on the Date of Grant.
(c) Restrictions on Transferability. No Option granted under
-------------------------------
this Paragraph 7 shall be transferable otherwise than by will or the laws of
descent and distribution and, during the lifetime of the Optionee, shall be
exercisable only by him or for his benefit by his attorney-in-fact or guardian;
provided that the Committee may, in its discretion, at the time of grant of a
- -------------
Non-Qualified Option or by amendment of an option document for an Incentive
Stock Option or a Non-Qualified Option, provide that Options granted to or held
by an Optionee may
-8-
be transferred, in whole or in part, to one or more transferees and exercised by
any such transferee; provided further that (i) any such transfer is without
---------------------
consideration and (ii) each transferee is a member of such Optionee's Immediate
Family; and provided further that any Incentive Stock Option granted pursuant to
---------------------
an option document which is amended to permit transfers during the lifetime of
the Optionee shall, upon the effectiveness of such amendment, be treated
thereafter as a Non-Qualified Option. No transfer of an Option shall be
effective unless the Committee is notified of the terms and conditions of the
transfer and the Committee determines that the transfer complies with the
requirements for transfers of Options under the Plan and the option document.
Any person to whom an Option has been transferred may exercise any Options only
in accordance with the provisions of Paragraph 7(g) and this Paragraph 7(c).
(d) Payment Upon Exercise of Options. Full payment for Shares
--------------------------------
purchased upon the exercise of an Option shall be made in cash, by certified
check payable to the order of the Sponsor, or, at the election of the Optionee
and as the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value equal to the aggregate option price,
or by delivering such combination of Shares and cash as the Committee may, in
its sole discretion, approve; provided, however, that Shares may be surrendered
-----------------
in satisfaction of the option price only if the Optionee certifies in writing to
the Sponsor that the Optionee owns a number of Other Available Shares as of the
date the Option is exercised that is at least equal to the number of Shares to
be surrendered in satisfaction of the Option Price; provided further, however,
----------------
that the option price may not be paid in Shares if the Committee determines that
such method of payment would result in liability under section 16(b) of the 1934
Act to an Optionee. Except as otherwise provided by the Committee, if payment
is made in whole or in part in Shares, the Optionee shall deliver to the Sponsor
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having a Fair Market Value on the date of
delivery that is not greater than the option price accompanied by stock powers
duly endorsed in blank by the record holder of the Shares represented by such
certificates. If the Committee, in its sole discretion, should refuse to accept
Shares in payment of the option price, any certificates representing Shares
which were delivered to the Sponsor shall be returned to the Optionee with
notice of the refusal of the Committee to accept such Shares in payment of the
option price. The Committee may impose such limitations and prohibitions on the
use of Shares to exercise an Option as it deems appropriate.
(e) Issuance of Certificate Upon Exercise of Options; Payment of
------------------------------------------------------------
Cash. Only whole Shares shall be issuable upon exercise of Options. Any right to
- ----
a fractional Share shall be satisfied in cash. Upon satisfaction of the
conditions of Paragraph 10, a certificate for the number of whole Shares and a
check for the Fair Market Value on the date of exercise of any fractional Share
to which the Optionee is entitled shall be delivered to such Optionee by the
Sponsor.
-9-
(f) Termination of Employment. For purposes of the Plan, a
-------------------------
transfer of an employee between two employers, each of which is a Company, shall
not be deemed a termination of employment. For purposes of Paragraph 7(g), an
Optionee's termination of employment shall be deemed to occur on the date an
Optionee ceases to serve as an active employee of a Company, as determined by
the Committee in its sole discretion, or, if the Optionee is a party to an
employment agreement with a Company, on the effective date of the Optionee's
termination of employment as determined under such agreement.
(g) Periods of Exercise of Options. An Option shall be
------------------------------
exercisable in whole or in part at such time or times as may be determined by
the Committee and stated in the option document, provided, however, that if the
grant of an Option would be subject to section 16(b) of the 1934 Act, unless the
requirements for exemption therefrom in Rule 16b-3(c)(1), under such Act, or any
successor provision, are met, the option document for such Option shall provide
that such Option is not exercisable until not less than six months have elapsed
from the Date of Grant. Except as otherwise provided by the Committee in its
discretion, no Option shall first become exercisable following an Optionee's
termination of employment for any reason; provided further, that:
(i) In the event that an Optionee terminates employment
with the Company for any reason other than death or Cause, any Option
held by such Optionee and which is then exercisable shall be
exercisable for a period of 90 days following the date the Optionee
terminates employment with the Company (unless a longer period is
established by the Committee); provided, however, that if such
termination of employment with the Company is due to the Disability of
the Optionee, he shall have the right to exercise those of his Options
which are then exercisable for a period of one year following such
termination of employment (unless a longer period is established by
the Committee); provided, however, that in no event shall an Incentive
Stock Option be exercisable after five years from the Date of Grant in
the case of a grant to a Ten Percent Shareholder, nor shall any other
Option be exercisable after ten years from the Date of Grant.
(ii) In the event that an Optionee terminates employment
with the Company by reason of his death, any Option held at death by
such Optionee which is then exercisable shall be exercisable for a
period of one year from the date of death (unless a longer period is
established by the Committee) by the person to whom the rights of the
Optionee shall have passed by will or by the laws of descent and
distribution; provided, however, that in no event shall an Incentive
-----------------
Stock Option be exercisable after five years from the Date of Grant in
the case of a grant to a Ten Percent Shareholder, nor shall any other
Option be exercisable after ten years from the Date of Grant.
-10-
(iii) In the event that an Optionee's employment with the
Company is terminated for Cause, each unexercised Option held by such
Optionee shall terminate and cease to be exercisable; provided
--------
further, that in such event, in addition to immediate termination of
the Option, the Optionee, upon a determination by the Committee shall
automatically forfeit all Shares otherwise subject to delivery upon
exercise of an Option but for which the Sponsor has not yet delivered
the Share certificates, upon refund by the Sponsor of the option
price.
(h) Date of Exercise. The date of exercise of an Option shall be
----------------
the date on which written notice of exercise, addressed to the Sponsor at its
main office to the attention of its Secretary, is hand delivered, telecopied or
mailed first class postage prepaid; provided, however, that the Sponsor shall
-----------------
not be obligated to deliver any certificates for Shares pursuant to the exercise
of an Option until the Optionee shall have made payment in full of the option
price for such Shares. Each such exercise shall be irrevocable when given. Each
notice of exercise must (i) specify the Incentive Stock Option, Non-Qualified
Option or combination thereof being exercised; and (ii) include a statement of
preference (which shall binding on and irrevocable by the Optionee but shall not
be binding on the Committee) as to the manner in which payment to the Sponsor
shall be made (Shares or cash or a combination of Shares and cash). Each notice
of exercise shall also comply with the requirements of Paragraph 15.
(i) Cash Rights. The Committee may, in its sole discretion,
-----------
provide in an option document for an eligible Optionee that Cash Rights shall be
attached to Non-Qualified Options granted under the Plan. All Cash Rights that
are attached to Non-Qualified Options shall be subject to the following terms:
(i) Such Cash Right shall expire no later than the Non-
Qualified Option to which it is attached.
(ii) Such Cash Right shall provide for the cash payment of
such amount per Share as shall be determined by the Committee and stated in
the option document.
(iii) Such Cash Right shall be subject to the same
restrictions on transferability as the Non-Qualified Option to which it is
attached.
(iv) Such Cash Right shall be exercisable only when such
conditions to exercise as shall be determined by the Committee and stated
in the option document, if any, have been satisfied.
(v) Such Cash Right shall expire upon the exercise of the
Non-Qualified Option to which it is attached.
-11-
(vi) Upon exercise of a Cash Right that is attached to a
Non-Qualified Option, the Option to which the Cash Right is attached shall
expire.
8. Option Documents and Terms - Non-Employee Directors
Options granted pursuant to the Plan to Non-Employee Directors shall
be granted, without any further action by the Committee, in accordance with the
terms and conditions set forth in this Paragraph 8. Options granted pursuant to
Paragraph 8(a) shall be evidenced by option documents. The terms of each such
option document shall be consistent with Paragraphs 8(b) through 8(g), as
follows:
(a) Grant of Options to Non-Employee Directors. Each Non-
------------------------------------------
Employee Director shall be granted, commencing on the Grant Date next following
the adoption of this Plan by the Board and on each successive Grant Date
thereafter, a Non-Qualified Option to purchase 5,400 Shares. Notwithstanding the
preceding sentence, each newly elected Non-Employee Director:
(i) shall be granted a Non-Qualified Option to purchase
9,000 Shares on the Election Date; and
(ii) shall not be entitled to the grant of an Option
hereunder on the Grant Date immediately following the Non-Employee
Director's Election Date if such Election Date is within ninety (90) days
of the Grant Date.
(b) Option Price. The option price per Share with respect to any
------------
Option granted under this Paragraph 8 shall be 100% of the Fair Market Value of
such Share on the Grant Date.
(c) Restrictions on Transferability. No Option granted under
-------------------------------
this Paragraph 8 shall be transferable otherwise than by will or the laws of
descent and distribution and, during the lifetime of the Optionee, shall be
exercisable only by him or for his benefit by his attorney-in-fact or guardian;
provided that the Committee may, in its discretion, at the time of grant of an
- -------------
Option or by amendment of an option document for an Option, provide that Options
may be transferred, in whole or in part, to one or more transferees and
exercised by any such transferee; provided further that (i) any such transfer is
---------------------
without consideration, and (ii) each transferee is a member of such Optionee's
Immediate Family. No transfer of an Option shall be effective unless the
Committee is notified of the terms and conditions of the transfer and the
Committee determines that the transfer complies with the requirements for
transfers of Options under the Plan and the option document. Any person to whom
an Option has been transferred may exercise any Options only in accordance with
the provisions of Paragraph 8(f) and this Paragraph 8(c).
-12-
(d) Payment Upon Exercise of Options. Full payment for Shares
--------------------------------
purchased upon the exercise of an Option shall be made in cash, by certified
check payable to the order of the Sponsor, or, at the election of the Optionee
and as the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value equal to the aggregate option price,
or by delivering such combination of Shares and cash as the Committee may, in
its sole discretion, approve; provided, however, that Shares may be surrendered
-----------------
in satisfaction of the option price only if the Optionee certifies in writing to
the Sponsor that the Optionee owns a number of Other Available Shares as of the
date the Option is exercised that is at least equal to the number of Shares to
be surrendered in satisfaction of the Option Price; provided further, however,
----------------
that the option price may not be paid in Shares if the Committee determines that
such method of payment would result in liability under section 16(b) of the 1934
Act to an Optionee. Except as otherwise provided by the Committee, if payment
is made in whole or in part in Shares, the Optionee shall deliver to the Sponsor
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having a Fair Market Value on the date of
delivery that is not greater than the option price accompanied by stock powers
duly endorsed in blank by the record holder of the Shares represented by such
certificates. If the Committee, in its sole discretion, should refuse to accept
Shares in payment of the option price, any certificates representing Shares
which were delivered to the Sponsor shall be returned to the Optionee with
notice of the refusal of the Committee to accept such Shares in payment of the
option price. The Committee may impose such limitations and prohibitions on the
use of Shares to exercise an Option as it deems appropriate.
(e) Issuance of Certificate Upon Exercise of Options; Payment of
------------------------------------------------------------
Cash. Only whole Shares shall be issuable upon exercise of Options granted under
- ----
this Paragraph 8. Any right to a fractional Share shall be satisfied in cash.
Upon satisfaction of the conditions of Paragraph 10, a certificate for the
number of whole Shares and a check for the Fair Market Value on the date of
exercise of any fractional Share to which the Optionee is entitled shall be
delivered to such Optionee by the Sponsor.
(f) Periods of Exercise of Options. An Option granted under this
------------------------------
Paragraph 8 shall not be exercisable for six months after the Date of Grant, and
shall then be exercisable in its entirety. No Option shall first become
exercisable following an Optionee's termination of service as a Non-Employee
Director for any reason; provided further, that:
----------------
(i) In the event that an Optionee terminates service
as a Non-Employee Director for any reason other than death or Cause,
any Option held by such Optionee and which is then exercisable shall
be exercisable for a period of 90 days following the date the Optionee
terminates service as a Non-Employee Director; provided, however, that
-----------------
if such termination of employment with the Company is due to the
Disability of the Optionee, he shall have the right to exercise those
of his Options which are then exercisable for a period of one year
following the date the Optionee terminates service as a Non-Employee
Director;
-13-
provided, however, that in no event shall an Option be exercisable
-----------------
after five years from the Grant Date.
(ii) In the event that an Optionee terminates service
as a Non-Employee Director by reason of his death, any Option held at
death by such Optionee which is then exercisable shall be exercisable
for a period of one year from the date of death by the person to whom
the rights of the Optionee shall have passed by will or by the laws of
descent and distribution; provided, however, that in no event shall an
-----------------
Option be exercisable after five years from the Grant Date.
(iii) In the event that an Optionee's service as a
Non-Employee Director is terminated for Cause, each unexercised Option
shall terminate and cease to be exercisable; provided further, that in
----------------
such event, in addition to immediate termination of the Option, the
Optionee shall automatically forfeit all Shares otherwise subject to
delivery upon exercise of an Option but for which the Sponsor has not
yet delivered the Share certificates, upon refund by the Sponsor of
the option price.
(g) Date of Exercise. The date of exercise of an Option granted
under this Paragraph 8 shall be the date on which written notice of exercise,
addressed to the Sponsor at its main office to the attention of its Secretary,
is hand delivered, telecopied or mailed first class postage prepaid; provided,
--------
however, that the Sponsor shall not be obligated to deliver any certificates for
- -------
Shares pursuant to the exercise of an Option until the Optionee shall have made
payment in full of the option price for such Shares. Each such exercise shall be
irrevocable when given. Each notice of exercise must (i) specify the Option
being exercised; and (ii) include a statement as to the manner in which payment
to the Sponsor shall be made (Shares or cash or a combination of Shares and
cash). Each notice of exercise shall also comply with the requirements of
Paragraph 15.
9. Limitation on Exercise of Incentive Stock Options.
The aggregate Fair Market Value (determined as of the time Options are
granted) of the Shares with respect to which Incentive Stock Options may first
become exercisable by an Optionee in any one calendar year under the Plan and
any other plan of the Company shall not exceed $100,000. The limitations
imposed by this Paragraph 9 shall apply only to Incentive Stock Options granted
under the Plan, and not to any other options or stock appreciation rights. In
the event an individual receives an Option intended to be an Incentive Stock
Option which is subsequently determined to have exceeded the limitation set
forth above, or if an individual receives Options that first become exercisable
in a calendar year (whether pursuant to the terms of an option document,
acceleration of exercisability or other change in the terms and conditions of
exercise or any other reason) that have an aggregate Fair Market Value
(determined as of the time the Options are granted) that exceeds the limitations
set forth above, the Options in excess of the limitation shall be treated as
Non-Qualified Options.
-14-
10. Rights as Shareholders
An Optionee shall not have any right as a shareholder with respect to
any Shares subject to his Options until the Option shall have been exercised in
accordance with the terms of the Plan and the option document and the Optionee
shall have paid the full purchase price for the number of Shares in respect of
which the Option was exercised and the Optionee shall have made arrangements
acceptable to the Sponsor for the payment of applicable taxes consistent with
Paragraph 16.
11. Changes in Capitalization
(a) Except as provided in Paragraph 11(b), in the event that Shares
are changed into or exchanged for a different number or kind of shares of stock
or other securities of the Sponsor,Company, whether through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split-up or other
substitution of securities of the Sponsor,Company, the Board or the Committee shall make
appropriate equitable anti-dilution adjustments to the number and class of
shares of stock available for issuance under the Plan, to the number and class
of shares of stock subject to outstanding Options,Offerings and to the option prices and the amounts payable pursuant to any Cash Rights.Purchase Price.
Any reference to the option pricePurchase Price in the Plan and in optionany related documents
shall be a reference to the option pricePurchase Price as so adjusted. Any reference to the
term "Shares" in the Plan and in optionany related documents shall be a reference to
the appropriate number and class of shares of stock available for issuance under
the Plan, as adjusted pursuant to this Paragraph 11.9. The Board's or the
Committee's adjustment shall be effective and binding for all purposes of this
Plan. (b) Paragraph 11(a) shall not applyAll Shares issued pursuant to the numberPlan shall be validly issued, fully paid
and nonassessable.
(b) Participant's Interest in Shares. A Participant shall have no interest
in Shares offered under the Plan until Shares are credited to the Participant's
Brokerage Account.
(c) Crediting of Shares that
become subjectto Brokerage Account. Shares purchased under the
Plan shall be credited to the grant of Options under Paragraph 8(a). Paragraph 11(a)
shall apply forParticipant's Brokerage Account as soon as
practicable following the purpose of making appropriate equitable anti-dilution
adjustments to Options granted pursuant to Paragraph 8(a) beforeOffering Termination Date.
(d) Restrictions on Purchase. The Board or the effective
date of the relevant event giving rise to the adjustment under Paragraph 11(a).
12. Terminating Events
(a) The Sponsor shall give Optionees at least thirty (30) days'
notice (or, if not practicable, such shorter notice as may be reasonably
practicable) prior to the anticipated date of the consummation of a Terminating
Event. Upon receipt of such notice, and for a period of ten (10) days thereafter
(or such shorter period as the Board shall reasonably determine and so notify
the Optionees), each Optionee shall be permitted to exercise the Option to the
extent the Option are then exercisable; provided that, the Sponsor may, by
-------------
similar notice, require the Optionee to exercise the Option, to the extent the
Option is then exercisable, or to forfeit the Option (or portion thereof, as
applicable). The Committee may, in its
discretion, providerequire as conditions to the purchase of any Shares under the Plan
such conditions as it may deem necessary to assure that upon the
Optionee's receipt of the notice of a Terminating Event under this Paragraph
12(a), the entire numbersuch purchase of Shares
covered by Optionsis in compliance with applicable securities laws.
10. Expenses.
The Participating Companies shall become immediately
-15-
exercisable. Upon the close of the period described in this Paragraph 12(a)
during which an Option may be exercisedpay all fees and expenses incurred
(excluding individual Federal, state, local or other taxes) in connection with
the Plan. No charge or deduction for any such expenses will be made to a
Terminating Event,Participant upon the termination of his or her participation under the Plan or
upon the distribution of certificates representing Shares purchased with his or
her Payroll Deductions.
11. Taxes.
The Participating Companies shall have the right to withhold from each
Participant's Compensation an amount equal to all federal, state, city or other
taxes as the Participating Companies shall determine are required to be withheld
by them in connection with the purchase of Shares under the Plan and in
connection with the sale of Shares acquired under the Plan. In connection with
such Option (includingwithholding, the Participating Companies may make any such portion thereof that isarrangements as
they may deem necessary or appropriate to protect their interests.
12. Plan and Contributions Not to Affect Employment.
The Plan shall not exercisable) shall
terminateconfer upon any Eligible Employee any right to the extent that such Option have not theretofore been exercised.
(b) Notwithstanding Paragraph 12(a),continue
in the eventemploy of the Terminating Event is not consummated, the OptionParticipating Companies.
13. Administration.
The Plan shall be deemed not to have
been exercisedadministered by the Committee. The Board and shall be exercisable thereafter to the extent it would have
been exercisable if no such notice had been given.
13. Interpretation
The
Committee shall have the powerauthority to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make and amend rules for putting it into effect andall other
determinations deemed necessary or advisable in administering it. It is intended
that the Incentive Stock Options granted under the Plan, shall constitute
incentive stock options withinwith or
without the meaningadvice of section 422counsel. The Committee may delegate its administrative
duties, subject to its review and supervision, to the appropriate officers and
employees of the Code, and that
Shares transferred pursuant to the exercise of Non-Qualified Options shall
constitute property subject to federal income tax pursuant to the provisions of
section 83Company. The determinations of the Code. The provisions ofBoard and the PlanCommittee on
the matters referred to in this Paragraph 13 shall be interpretedconclusive and applied insofar as possible to carry out such intent.binding.
14. AmendmentsAmendment and Termination.
The Board or the Committee may terminate the Plan at any time and may amend
the Plan from time to time in any respect; provided, however, that upon any
termination of the Plan, all Shares or Payroll Deductions (to the extent not yet
applied to the purchase of Shares) under the Plan shall be distributed to the
Participants, provided further, that no amendment to the Plan shall affect the
right of any Participant to receive his or her proportionate interest in the
Shares or his or her Payroll Deductions (to the extent not yet applied to the
purchase of Shares) under the Plan, and provided further that the Company may
seek shareholder approval of an amendment to the Plan if such manner asapproval is
determined to be required by or advisable under the regulations of the
Securities and Exchange Commission or the Internal Revenue Service, the rules of
any stock exchange or system on which the Shares are listed or other applicable
law or regulation.
15. Effective Date.
The Plan shall be effective on the date it may deem advisable. Nevertheless, neitheris adopted by the Board, norsubject
to approval by the Committee may, without obtainingCompany's shareholders within one year of the adoption of the
Plan by the Board. Any rights to purchase Shares made available before the
approval of the Plan by the Company's shareholders shall be expressly
conditioned upon such approval, and no Share certificates shall be issued until
such approval. If shareholder approval is not received within twelve12 months before
or after the date of the initial adoption of the Plan by the Board, no Share
certificates shall be issued and all amounts credited to Participants' Accounts
with respect to such actionShares shall be returned to Participants as soon as
administratively practicable.
16. Government and Other Regulations.
(a) In General. The purchase of Shares under the Plan shall be subject to
all applicable laws, rules and regulations, and to such approvals by such vote of shareholdersany
governmental agencies as may be required by Pennsylvania law
for any action requiring shareholder approval, or by a majority of votes cast at
a duly held shareholders' meeting at which a majority of all voting stock is
present and voting on such amendment, either in person or in proxy (but not, in
any event, less than the vote required pursuant to Rule 16b-3(b) under the 1934
Act) change the class of individuals eligible to receive an Incentive Stock
Option, extend the expiration date of the Plan, decrease the minimum option
price of an Incentive Stock Option granted under the Plan or increase the
maximum number of shares as to which Options may be granted, except as provided
in Paragraph 11 hereof. In addition, the provisions of Paragraph 8 that
determine (i) which directors shall be granted Options; (ii) the number of
Shares subject to Options; (iii) the option price of Shares subject to Options;
and (iv) the timing of grants of Options shall not be amended more than once
every six months, other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended, if applicable. No
outstanding Option shall be affected by any such amendment without the written
consent of the Optionee or other person then entitled to exercise such Option.
-16-
15.required.
(b) Securities Law
(a) In General.Law. The Committee shall have the power to make each
----------
grantOffering under the Plan subject to such conditions as it deems necessary or
appropriate to comply with the then-existing requirements of the Securities Act
of 1933, as amended, and the Securities Exchange Act or theof 1934, Act,as amended,
including Rule 16b-3 (or any similar rule) ofpromulgated by the Securities and
Exchange Commission.
(b) AcknowledgmentCommission thereunder.
17. Non-Alienation.
No Participant shall be permitted to assign, alienate, sell, transfer,
pledge or otherwise encumber his right to purchase Shares under the Plan prior
to time that Shares are credited to the Participant's Brokerage Account. Any
attempt at assignment, alienation, sale, transfer, pledge or other encumbrance
shall be void and of Securities Law Restrictionsno effect.
18. Notices.
Any notice required or permitted hereunder shall be sufficiently given only
if delivered personally, telecopied, or sent by first class mail, postage
prepaid, and addressed:
If to the Company:
Comcast Corporation
1500 Market Street
Philadelphia, PA, 19102
Fax: 215-981-7794
Attention: General Counsel
Or any other address provided pursuant to notice provided by the Committee.
If to the Participant:
At the address on Exercise.
---------------------------------------------------------
Tofile with the Participating Company from time to time, or
to such other address as either party may hereafter designate in writing
(or via such other means of communication permitted by the Committee) by
notice similarly given by one party to the other.
19. Successors.
The Plan shall be binding upon and inure to the benefit of any successors
or assigns of the Company.
20. Severability.
If any part of this Plan shall be determined to be invalid or void in any
respect, such determination shall not affect, impair, invalidate or nullify the
remaining provisions of this Plan which shall continue in full force and effect.
21. Acceptance.
The election by any Eligible Employee to participate in this Plan
constitutes his or her acceptance of the terms of the Plan and his or her
agreement to be bound hereby.
22. Applicable Law.
This Plan shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania, to the extent not preempted by applicable Federal
law.
Executed as of the __________ day of ____________________, 200__.
COMCAST CORPORATION
By:_________________________
Attest: ___________________
SCHEDULE A
Participating Companies
Comcast Corporation
Comcast Cable Communications, Inc. and its subsidiaries
Comcast Online Communications, Inc.
COMCAST CORPORATION
1996 EXECUTIVE CASH BONUS PLAN
(as amended through March 21, 2001)
1. PURPOSE
The purpose of the Plan is to provide, subject to shareholder approval
and approval by the Committee (as defined below), performance-based cash bonus
compensation for certain employees of Comcast Corporation, a Pennsylvania
corporation (the "Company") in accordance with a formula that is based on the
financial success of the Company as part of an integrated compensation program
which is intended to assist the Company in motivating and retaining employees of
superior ability, industry and loyalty.
2. DEFINITIONS
The following words and phrases as used herein shall have the
following meanings, unless a different meaning is plainly required by the
context:
"Board of Directors" shall mean the Board of Directors of the Company.
"Cash Flow" shall mean the operating income before depreciation and
amortization for the Company and those of its affiliates which are included with
the Company in its consolidated financial statements as prepared by the Company
in accordance with generally accepted accounting principles.
"Committee" shall mean the Subcommittee on Performance-Based
Compensation of the Compensation Committee unlessof the Shares subject toBoard of Directors.
"Company" shall mean Comcast Corporation, a Pennsylvania corporation,
and any successor thereto.
"First Tier Goal" shall mean the Option
are coveredperformance goal, measured in terms
of level of Cash Flow, as established by a then current registration statement or a Notification under
Regulation A under the 1933 Act, each notice of exercise of an Option shall
contain the Optionee's acknowledgment in form and substance satisfactory to the Committee that:
(i)for each Plan Year. The
First Tier Goal is the Shares subjectperformance measure which, if achieved, permits payment
to the Option are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinioneach Participant of counsel satisfactory to the
Sponsor, may be made without violating the registration provisions66% of the Act);
(ii)Participant's Target Bonus. The Committee
shall in all events establish the Optionee has been advised and understands
that (A)First Tier Goal for each Plan Year no later
than 90 days after the Shares subject tofirst day of the Option have not been registered under
the 1933 Act and are "restricted securities"Plan Year or, if sooner, within the
meaningfirst 25% of Rule 144
under the 1933 Act and are subjectPlan Year. The First Tier Goal shall be established at the
discretion of the Committee, provided, however, that the Committee must
determine that, as of the date the First Tier Goal is established, it is
substantially uncertain whether the level of Cash Flow required to restrictions on transfer and (B)meet the
Sponsor is under no obligationFirst Tier Goal will be achieved.
"Participant" shall mean those persons eligible to register the Shares subject to the Option
under the 1933 Act or to take any action which would make available to the
Optionee any exemption from such registration;
(iii) the certificate evidencing the Shares may bear a
restrictive legend; and
(iv) the Shares subject to the Option may not be
transferred without compliance with all applicable federal and state
securities laws.
(c) Delay of Exercise Pending Registration of Securities.
----------------------------------------------------
Notwithstanding any provisionparticipate in the
Plan or an option document toin accordance with Section 3.
"Plan" shall mean the contrary,
ifComcast Corporation 1996 Executive Cash Bonus
Plan.
"Plan Year" shall mean the calendar year, except that the first Plan
Year shall be the period from July 1, 1996 through December 31, 1996.
"Second Tier Goal" shall mean the performance goal, measured in terms
of level of Cash Flow, as established by the Committee determines, in its solefor each Plan Year. The
Second Tier Goal is the performance measure which, if achieved, permits payment
to each Participant of 100% of the Participant's Target Bonus. The Committee
shall establish the Second Tier Goal for each Plan Year at the same time that it
establishes the First Tier Goal for such Plan Year. The Second Tier Goal shall
be a level of Cash Flow chosen at the discretion that issuance of Shares
pursuant to the exercise of an Option should be delayed pending registration or
qualification under federal or state securities laws or the receipt of a legal
opinion that an appropriate exemption from the application of federal or state
securities laws is available, the Committee may defer exercisethat is higher
than the level of any Option
until such Shares are appropriately registered or qualified or an appropriate
legal opinion has been received,Cash Flow chosen for the Plan Year as applicable.
-17-
16. Withholding of Taxes on Exercise of Option
(a) Whenever the Company proposes or is required to deliver or
transfer Shares in connection with the exercise of an Option, the CompanyFirst Tier Goal.
"Target Bonus" shall have the right to (i) require the recipient to remit to the Sponsor an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the delivery or transfer of any certificate or certificates for such
Shares or (ii) take any action whatever that it deems necessary to protect its
interestsmean, with respect to tax liabilities. The Sponsor's obligation to make any delivery or transferParticipant for any
Plan Year, the sum of Shares on(a) the exercise of an Option shall be conditioned
on the recipient's compliance, to the Sponsor's satisfaction, with any
withholding requirement. In addition, if the Committee grants Options or amends
option documents to permit Options to be transferred during the lifeTarget Percentage of the Optionee,Participant's base salary
and any guaranteed bonus (other than any bonus awarded on account of the
Committee may include in such option documents such provisionstermination as it determines are necessary or appropriate to permitof December 31, 1993, of the Company to deduct
compensation expenses recognized upon exerciseCompany's discretionary cash bonus
plan) as of the first day of the Plan Year and (b) the amount, if any, of such
OptionsParticipant's Target Bonus for federalany prior Plan Year which was not earned due to
failure to meet the First Tier Goal or state income tax purposes.
(b) Except as otherwisethe Second Tier Goal; provided, however,
that in this Paragraph 16(b)no event shall any Participant's Target Bonus for any Plan Year exceed
$3,000,000.
"Target Percentage" shall mean, with respect to any Participant for
any Plan Year, a percentage, not to exceed 150%, any
tax liabilities incurred in connection with the exercise of an Option under the
Plan other than an Incentive Stock Option shall be satisfied by the Sponsor's
withholding a portion of the Shares underlying the Option exercised having a
Fair Market Value approximately equal to the minimum amount of taxes required to
be withheld by the Sponsor under applicable law, unless otherwise determinedestablished by the Committee
with respect to any Optionee. Notwithstanding the foregoing,such Participant and such Plan Year. If no other percentage is
selected by the Committee, the Target Percentage shall be 50%.
3. PARTICIPATION
The Participants in the Plan shall be
(a) Brian L. Roberts, Lawrence S. Smith, John R. Alchin and Stanley
Wang;
(b) Effective for Plan Years beginning after 1999, Brian L. Roberts,
Lawrence S. Smith, John R. Alchin, Stanley Wang, Stephen B. Burke, Michael A.
Tallent, Bradley P. Dusto and David N. Watson;
(c) Effective for Plan Years beginning after 2000, Brian L. Roberts,
Lawrence S. Smith, John R. Alchin, Stanley Wang, Stephen B. Burke, Michael A.
Tallent, Bradley P. Dusto, David N. Watson, Arthur R. Block, Mark A. Coblitz and
Robert A. Pick; and
(d) Effective for Plan Years beginning after 2003, Brian L. Roberts,
Lawrence S. Smith, John R. Alchin, Stanley Wang, Stephen B. Burke, Michael A.
Tallent, Bradley P. Dusto, David N. Watson, Arthur R. Block, Mark A. Coblitz,
Robert A. Pick and Lawrence J. Salva.
In addition, Participants in the Plan shall include such other key executives as
may permit an Optioneebe designated by the Committee to elect one or bothparticipate in the Plan from time to time.
4. TERM OF PLAN
The original effective date of the following: (i)Plan was July 1, 1996. Subject to
have taxes withheld in excessapproval of the minimum amountshareholders of the Company, the Plan shall continue until all
amounts required to be withheldpaid with respect to all Plan Years up through and
including the Plan Year ending December 31, 2006 are paid by the Sponsor under applicable law; providedCompany, unless
the Plan is sooner terminated by the Board of Directors.
5. BONUS ENTITLEMENT
Each Participant shall be entitled to receive a bonus in accordance
with the provisions of Section 6 of the Plan only after certification by the
Committee that the Optionee certifiesperformance goals set forth in writingSection 6 have been satisfied.
The bonus payment under the Plan shall be paid to each Participant as soon as
practicable following the close of the Plan Year with respect to which the bonus
is to be paid. Notwithstanding anything contained herein to the Sponsor thatcontrary, no
bonus shall be payable under the Optionee ownsPlan without the prior disclosure of the terms
of the Plan to the shareholders of the Company and the approval of the Plan by
such shareholders.
6. AMOUNT OF PERFORMANCE-BASED COMPENSATION BONUS
(a) Each Participant in the Plan shall be entitled to a numberbonus with
respect to a Plan Year which is equal to 66% of Other Available Shares
having a Fair Market Value thatthe Participant's Target Bonus
if the Company's Cash Flow for the Plan Year is at least equal to the Fair Market ValueFirst Tier
Goal, and 100% of Option Shares to be withheld by the CompanyTarget Bonus if the Company's Cash Flow for the then-current exercise on
accountPlan Year
is at least equal to the Second Tier Goal. If the level of withheld taxesCash Flow for the
Plan Year is higher than the First Tier Goal and lower than the Second Tier
Goal, the bonus with respect to such Plan Year shall be such percentage of the
Participant's Target Bonus in excess of such minimum amount,66% as is determined by prorating the
difference between 100% and (ii) to pay66% according to the Sponsorlevel of Cash Flow in cash all or a portionexcess
of the taxesFirst Tier Goal divided by the difference between the levels of Cash Flow
represented by the Second Tier Goal and the First Tier Goal. If the level of
Cash Flow for a Plan Year is below the First Tier Goal established with respect
to such Plan Year, no bonus shall be withheldpayable under the Plan for that Plan Year.
(b) In the event any payment of a bonus otherwise payable under the
Plan occurs more than two months after the close of the Plan Year with respect
to which the bonus is paid because the required disclosure of the terms of the
Plan to the shareholders of the Company and the approval of the Plan by such
shareholders delays such bonus payment, the amount of the
bonus otherwise payable shall be increased by the amount such bonus payment
would earn if it were invested in an investment bearing a 7% annual rate of
return, compounded daily, or such other reasonable rate of interest as may be
determined by the Committee, during the period from the close of the Plan Year
with respect to which such bonus is paid and the date the bonus is actually
paid.
(c) Notwithstanding anything contained herein to the contrary, in the
event there is a significant acquisition or disposition of any assets, business
division, company or other business operations of the Company that is reasonably
expected to have an effect on Cash Flow as otherwise determined under the terms
of the Plan, the First Tier Goal and the Second Tier Goal shall be adjusted to
take into account the impact of such acquisition or disposition by increasing or
decreasing such goals in the same proportion as Cash Flow of the Company would
have been affected for the prior Plan Year on a pro forma basis had such an
acquisition or disposition occurred on the same date during the prior Plan Year
(except in the case of the first Plan Year the adjustment shall be made by
reference to the effect such an acquisition or disposition on the same date
during the prior calendar year would have had on Cash Flow for the period
commencing July 1, 1995 and ending December 31, 1995). Such adjustment shall be
based upon the historical equivalent of Cash Flow of the assets so acquired or
disposed of for the prior Plan Year, as shown by such records as are available
to the Company, as further adjusted to reflect any aspects of the transaction
that should be taken into account to ensure comparability between amounts in the
prior Plan Year and the current Plan Year.
(d) Notwithstanding the determination of the amount of a Participant's
bonus payable with respect to any Plan Year under Section 6(a), the Committee
shall have the discretion to reduce or eliminate the bonus otherwise payable to
a Participant if it determines that such a reduction or elimination of the bonus
is in the best interests of the Company.
7. COMMITTEE
(a) Powers. The Committee shall have the power and duty to do all
things necessary or convenient to effect the intent and purposes of the Plan and
not inconsistent with any of the provisions hereof, whether or not such powers
and duties are specifically set forth herein, and, by way of amplification and
not limitation of the foregoing, the Committee shall have the power to:
(i) provide rules and regulations for the management, operation
and administration of the Plan, and, from time to time, to amend or supplement
such rules and regulations;
(ii) construe the Plan, which construction, as long as made in
good faith, shall be final and conclusive upon all parties hereto; and
(iii) correct any defect, supply any omission, or reconcile any
inconsistency in the Plan in such manner and to such extent as it shall deem
expedient to carry
the same into effect, and it shall be the sole and final judge of when such
action shall be appropriate.
The resolution of any questions with respect to payments and
entitlements pursuant to the provisions of the Plan shall be determined by the
Committee, and all such determinations shall be final and conclusive.
(b) Indemnity. No member of the Committee shall be directly or
indirectly responsible or under any liability by reason of any action or default
by him as a member of the Committee, or the exercise of an Option. Inor failure to exercise
any power or discretion as such member. No member of the Committee shall be
liable in any way for the acts or defaults of any other member of the Committee,
or any of its advisors, agents or representatives. The Company shall indemnify
and save harmless each member of the Committee against any and all cases,expenses and
liabilities arising out of his own membership on the Shares so withheldCommittee.
(c) Compensation and Expenses. Members of the Committee shall
receive no separate compensation for services other than compensation for their
services as members of the Board of Directors, which compensation can include
compensation for services at any committee meeting attended in their capacity as
members of the Board of Directors. Members of the Committee shall be entitled to
receive their reasonable expenses incurred in administering the Plan. Any such
expenses, as well as extraordinary expenses authorized by the Company, shall havebe
paid by the Company.
(d) Participant Information. The Company shall furnish to the
Committee in writing all information the Company deems appropriate for the
Committee to exercise its powers and duties in administration of the Plan. Such
information shall be conclusive for all purposes of the Plan and the Committee
shall be entitled to rely thereon without any investigation thereof; provided,
however, that the Committee may correct any errors discovered in any such
information.
(e) Inspection of Documents. The Committee shall make available to
each Participant, for examination at the principal office of the Company (or at
such other location as may be determined by the Committee), a Fair Market Valuecopy of the Plan
and such of its records, or copies thereof, as may pertain to any benefits of
such Participant under the Plan.
8. TERMINATION AND AMENDMENT
The Plan may be terminated or revoked by the Company at any time and
amended by the Company from time to time, provided that does not exceedneither the termination,
revocation or amendment of the Plan may, without the written approval of the
Participant, reduce the amount of taxes toa bonus payment that is due, but has not yet
been paid, and provided further that no changes that would increase the amount
of bonuses determined under provisions of the Plan shall be withheld
minus the cash payment, if any, made by the Optionee. Any election pursuant to
this Paragraph 16(b) must be in writing made prior to the date specifiedeffective without
approval by the Committee and without disclosure to and approval by the
shareholders of the Company in any eventa separate vote prior to payment of such bonuses.
In addition,
the date the amount of tax to be withheld
or paid is determined. An election pursuant to this Paragraph 16(b)Plan may be made
only by an Optioneemodified or in the event of the Optionee's death,amended by the Optionee's
legal representative. No Shares withheld pursuant to this Paragraph 16(b) shall
be available for subsequent grants under the Plan. The Committee, may add such
other requirements and limitations regarding elections pursuant to this
Paragraph 16(b) as it deems appropriate.appropriate,
in order to comply with any rules, regulations or other guidance promulgated by
the Internal Revenue Service with respect to applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), as they relate to the
exemption for "performance-based compensation" under the limitations on the
deductibility of compensation imposed under Code Section 162(m).
9. MISCELLANEOUS PROVISIONS
(a) Unsecured Creditor Status. A Participant entitled to a bonus
payment hereunder, shall rely solely upon the unsecured promise of the Company,
as set forth herein, for the payment thereof, and nothing herein contained shall
be construed to give to or vest in a Participant or any other person now or at
any time in the future, any right, title, interest, or claim in or to any
specific asset, fund, reserve, account, insurance or annuity policy or contract,
or other property of any kind whatever owned by the Company, or in which the
Company may have any right, title, or interest, nor or at any time in the
future.
(b) Other Company Plans. It is agreed and understood that any
benefits under this Plan are in addition to any and all benefits to which a
Participant may otherwise be entitled under any other contract, arrangement, or
voluntary pension, profit sharing or other compensation plan of the Company,
whether funded or unfunded, and that this Plan shall not affect or impair the
rights or obligations of the Company or a Participant under any other such
contract, arrangement, or voluntary pension, profit sharing or other
compensation plan.
(c) Except as otherwise provided in this Paragraph 16(c),Separability. If any tax liabilities incurred in connection with the exerciseterm or condition of an Incentive Stock
Option under the Plan shall be
satisfiedinvalid or unenforceable to any extent or in any application, then the remainder
of the Plan, with the exception of such invalid or unenforceable provision,
shall not be affected thereby, and shall continue in effect and application to
its fullest extent.
(d) Continued Employment. Neither the establishment of the Plan,
any provisions of the Plan, nor any action of the Committee shall be held or
construed to confer upon any Participant the right to a continuation of
employment by the Optionee's paymentCompany. The Company reserves the right to dismiss any
employee (including a Participant), or otherwise deal with any employee
(including a Participant) to the Sponsor in cash all ofsame extent as though the taxes to be withheld upon exercise of the Incentive
Stock Option. Notwithstanding the foregoing,Plan had not been
adopted.
(e) Incapacity. If the Committee determines that a Participant is
unable to care for his affairs because of illness or accident, any benefit due
such Participant under the Plan may permit an
Optioneebe paid to elect to have the Sponsor withhold a portion of the Shares
underlying the
-18-
Incentive Stock Option exercised having a Fair Market Value approximately equal
to the minimum amount of taxes required to be withheld by the Sponsor under
applicable law. Any election pursuant to this Paragraph 16(c) must be in writing
made prior to the date specifiedhis spouse, child, parent, or any
other person deemed by the Committee to have incurred expense for such
Participant (including a duly appointed guardian, committee, or other legal
representative), and in any event priorsuch payment shall be a complete discharge of the
Company's obligation hereunder.
(g) Jurisdiction. The Plan shall be construed, administered, and
enforced according to the date the amount of tax to be withheld or paid is determined. An election
pursuant to this Paragraph 16(c) may be made only by an Optionee or, in the
eventlaws of the Optionee's death,Commonwealth of Pennsylvania, except to
the extent that
such laws are preempted by the Optionee's legal representative. No Shares
withheld pursuantFederal laws of the United States of America.
(h) Withholding. The Participant shall make appropriate
arrangements with the Company for satisfaction of any federal, state or local
income tax withholding requirements and Social Security or other tax
requirements applicable to this Paragraph 16(c) shall be available for subsequent
grantsthe accrual or payment of benefits under the Plan. If
no other arrangements are made, the Company may provide, at its discretion, for
any withholding and tax payments as may be required.
Executed this 21st day of March, 2001.
COMCAST CORPORATION
BY:
-----------------------------------
ATTEST:
--------------------------------
[FORM OF PROXY -- CLASS A]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF COMCAST CORPORATION
The Committeeundersigned, a holder of Class A Common Stock of COMCAST CORPORATION
(the "Company"), hereby constitutes and appoints RALPH J. ROBERTS and STANLEY
WANG, and each of them acting individually, as the attorney and proxy of the
undersigned, with full power of substitution, for and in the name and stead of
the undersigned, to attend the Annual Meeting of Shareholders of the Company to
be held on Wednesday, June 6, 2001 at 9:00 a.m. local time at the offices of the
Company, 1500 Market Street, West Tower, 9th Floor, Philadelphia, Pennsylvania,
and any adjournment or postponement thereof, and thereat to vote all shares of
Class A Common Stock which the undersigned would be entitled to vote if
personally present, as follows:
Unless otherwise specified, the shares will be voted "FOR" the election of
all ten nominees for director and "FOR" the other proposals set forth on the
reverse side. This Proxy also delegates discretionary authority to vote with
respect to any other business which may addproperly come before the meeting and any
adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING, PROXY STATEMENT AND 2000 FINANCIAL REPORT OF COMCAST CORPORATION.
(Continued and to be dated and signed on the reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
[X] Please mark your votes as in this example.
1. Election of ten Directors
[ ] FOR [ ] WITHHELD
Except authority to vote withheld for the following Nominee(s):
--------------
01-Ralph J. Roberts, 02-Julian A. Brodsky, 03-Brian L. Roberts,
04-Decker Anstrom, 05-Sheldon M. Bonovitz, 06-Joseph L. Castle, II,
07-Felix G. Rohatyn, 08-Bernard C. Watson, 09-Irving A. Wechsler,
10-Anne Wexler.
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 2001 fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve the adoption of the 2001 Employee Stock Purchase Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To approve an amendment to the 1996 Executive Cash Bonus Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To vote on such other requirements and
limitations regarding elections pursuant to this Paragraph 16(c) as it deems
appropriate.
17. Effective Date and Termbusiness which may properly come before the
meeting.
Change of Plan
This amendment and restatement of the Plan is effective as of April
14, 2000.Address and/or Comments mark here [ ]
The Plan shall expire no later than March 13, 2006, the tenth
anniversary of the date the Plan was initially adoptedsigner hereby revokes all previous proxies given by the Board, unless
sooner terminatedsigner to vote at
the Annual Meeting or any adjournments thereof.
NOTE: Please sign this Proxy exactly as name(s) appear(s) in address. When
signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your title as such, and if signer is a corporation, please sign with
full corporate name by duly authorized officer or officers and affix the
corporate seal. When stock is issued in the name of two or more persons, all
such persons should sign.
- ----------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
IF CASTING VOTES BY MAIL, DETACH HERE AND RETURN PROPERLY
EXECUTED PROXY CARD IN ENCLOSED POSTAGE-PREPAID ENVELOPE
[logo of Comcast Corporation appears here] Comcast Corporation
P.O. Box 11059
New York, N.Y. 10203-0059
VOTE BY INTERNET
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET MAIL
http://www.eproxyvote.com/cmcsa Mark, sign and date your proxy card
and return it in the postage-paid
Use the Internet to vote your proxy. envelope we have provided.
Have your proxy card in hand when If you have submitted your proxy
you access the website. You will be by the Board.
18. General
Each Option shall be evidenced by a written instrument containing such
terms and conditions not inconsistent with the Plan as the Committee may
determine. The issuance of Shares on the exercise of an Option shall be subjectInternet there is no
prompted to all of the applicable requirements of the corporation law of the Sponsor's
state of incorporation and other applicable laws, including federal or state
securities laws, and all Shares issued under the Plan shall be subjectenter your control number, need for you to the
terms and restrictions containedmail back your
located in the Articles of Incorporationbox above, to proxy.
create an electronic ballot.
Your Internet vote authorizes the named
proxies to vote your shares in the same
manner as if you marked, signed and
By-Laws ofreturned the Sponsor,proxy card.
Votes submitted via the Internet as amended fromdescribed herein must be received by 5:00
p.m. eastern time to time.
Executed as of the 14th day of April, 2000.
COMCAST CORPORATION
By:_________________________________
Attest: ____________________________
-19-on June 5, 2001.