SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant: [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Comcast 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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The following questions and answers were prepared for meetings with
shareholders:
General: Comcast Corporation and AT&T have scheduled meetings of shareholders
to, among other things, approve the combination of Comcast and AT&T
Broadband (a new holding company for AT&T's broadband business that
will be spun off immediately prior to the combination) to create a
new combined corporation, AT&T Comcast.
1. Q When and where will the meetings of shareholders take place?
A The Comcast special meeting will take place on July 10, 2002 in
Philadelphia, Pennsylvania. The AT&T annual meeting will take place
on July 10, 2002 in N. Charleston, South Carolina.
2. Q Where is Comcast incorporated and located?
A Comcast is a Pennsylvania corporation incorporated in 1969 and located
in Philadelphia, Pennsylvania.
3. Q What is D. F. King's and Innisfree's role in the AT&T Comcast
transaction?
A Comcast has appointed D. F. King and Innisfree as co-Information
Agents.
4. Q What is the toll free number that Comcast shareholders may call to
get information about the AT&T Comcast transaction and the Comcast
meeting?
A Comcast shareholders can call either of the co-Information Agents,
D. F. King, toll free at 1-866-880-6503 or Innisfree, toll free at
1-877-750-9499 or 1-212-750-5833.
5. Q What is the toll free number that AT&T shareholders may call to get
information about the AT&T Comcast transaction and the AT&T meeting?
A AT&T shareholders can call toll free, 1-866-777-9124 or
1-212-440-9800.
6. Q Where can Comcast shareholders call to get general information not
dealing with the AT&T Comcast transaction or the Comcast special
meeting?
A 1. Registered shareholders who need to contact Comcast's transfer
agent, EquiServe, can be connected directly by D. F. King or
Innisfree telephone representatives OR can call EquiServe
themselves, toll free, at 1-888-883-8903.
2. Comcast provides an Investor Relations Hotline which can be
reached toll free at 1-866-281-2100.
7. Q What are the names of the two companies merging?
A Comcast and newly formed AT&T Broadband will each merge with a
different wholly owned subsidiary of AT&T Comcast, a newly formed
Pennsylvania corporation. When the mergers are completed, Comcast and
AT&T Broadband will each be a wholly owned subsidiary of AT&T Comcast.
8. Q Why have I received multiple proxy material packages from Comcast
Corporation?
A 1. Comcast is conducting two separate meetings, a Special Meeting
and an Annual Meeting. One package may contain Special Meeting
proxy materials and the other package may contain Annual Meeting
proxy materials.
2. You may also receive multiple packages of proxy materials if you
have multiple accounts owning Comcast shares.
PLEASE VOTE EACH PROXY CARD YOU RECEIVE.
9. Q Why are shareholders being asked to vote?
A Shareholders are being asked to vote because their approval of the
proposals is required by the merger agreement between AT&T and
Comcast or by state law.
10. Q Who is entitled to vote at the Comcast special meeting?
A Comcast Class A shareholders and Comcast Class B shareholders are
entitled to vote at the Comcast special meeting. Holders of Comcast
Class A Special common stock do not have any voting rights with
respect to the AT&T Comcast transaction. As required by state law,
Comcast has forwarded this document to Comcast Class A Special common
stockholders to notify them of the AT&T Comcast transaction.
11. Q On what proposals are Comcast Corporation shareholders being asked to
vote?
A 1. Comcast transaction proposal: approval and adoption of the
merger agreement and the transactions contemplated by the merger
agreement, in which Comcast and a newly formed corporation
containing AT&T's broadband business will each merge with a
different wholly owned subsidiary of a newly formed corporation
called AT&T Comcast Corporation. Upon completion of the AT&T
Comcast transaction, Comcast and AT&T Broadband will each be a
wholly owned subsidiary of AT&T Comcast. The business of AT&T
Comcast will be the combined businesses currently conducted by
Comcast and AT&T's broadband business.
2. AT&T Comcast charter proposal: approval of the AT&T Comcast
charter, including the corporate governance provisions of the
AT&T Comcast charter described in the joint proxy
statement/prospectus.
3. Preferred structure proposal: approval and adoption of an
amendment to the Comcast charter to allow the implementation of
the Preferred Structure.
12. Q What does the Comcast Board of Directors recommend?
A The Comcast Board of Directors has determined that each of the
proposals are in the best interests of shareholders and recommends
that shareholders vote for the Comcast transaction proposal, for the
AT&T Comcast charter proposal and for the preferred structure
proposal.
13. Q What is the vote requirement to approve each proposal?
A 1. The Comcast transaction proposal, the AT&T Comcast charter
proposal and the preferred structure proposal each requires the
affirmative vote of a majority of the votes cast by holders of
shares of Comcast Class A common stock and Comcast Class B
common stock, voting together as a single class. Approval of
these proposals is assured because Sural LLC, which holds
approximately 86.7% of the combined voting power of the Comcast
stock, has agreed to vote its shares in favor of the Comcast
transaction proposal, the AT&T Comcast charter proposal and the
preferred structure proposal.
2. The preferred structure proposal also requires the affirmative
vote of a majority of the votes cast by holders of shares of
Comcast Class A common stock, voting as a single class.
14. Q Is the AT&T Comcast transaction conditioned on approval of the
preferred structure proposal?
A No. The AT&T Comcast transaction is not conditioned on approval of the
preferred structure proposal.
15. Q What is the Preferred Structure?
A If holders of Comcast Class A common stock, voting as a single class,
approve the preferred structure proposal, AT&T Comcast's capital
structure upon completion of the AT&T Comcast transaction will be as
follows:
1. Class B common stock -- each share will have 15 votes and all
shares in the aggregate will have 33?% of the voting power of
the AT&T Comcast stock,
2. Class A common stock -- each share will have a number of votes
determined pursuant to a formula and all shares in the aggregate
will initially have 662/3 % of the voting power of the AT&T
Comcast stock, and
3. Class A Special common stock -- will be non-voting.
The 33 1/3% aggregate voting power of AT&T Comcast Class B common
stock will not be diluted by additional issuances of any other class
of AT&T Comcast stock and will be reduced only in limited
circumstances.
Under the Preferred Structure, holders of Comcast Class A common stock
will receive shares of AT&T Comcast Class A common stock
(approximately 22 million shares in the aggregate) and holders of AT&T
common stock will also receive shares of AT&T Comcast Class A common
stock (up to 1.235 billion shares in the aggregate). Upon completion
of the AT&T Comcast transaction, there will be outstanding
approximately 1.37 billion shares of AT&T Comcast Class A common
stock, assuming that the transaction with Microsoft described below is
completed and that AT&T Comcast is not required to make any additional
payments of AT&T Comcast common stock to AT&T Broadband shareholders
in connection with the AT&T Comcast transaction.
16. Q What is the Alternative Structure?
A If holders of Comcast Class A common stock, voting as a single class,
do not approve the preferred structure proposal, AT&T Comcast's
capital structure upon completion of the AT&T Comcast transaction will
be as follows:
1. Class B common stock - each share will have 15 votes and all
shares in the aggregate will have 33?% of the voting power of
AT&T Comcast stock,
2. Class A common stock - each share will have 1 vote and all shares
in the aggregate will have approximately 5.14% of the voting
power of AT&T Comcast stock,
3. Class A Special common stock - will be non-voting, and
4. Class C common stock - each share will have a number of votes
determined pursuant to a formula and all shares in the aggregate
will initially have approximately 6153/100% of the voting power
of AT&T Comcast stock.
The 33?% aggregate voting power of AT&T Comcast Class B common stock
and approximately 5.14% aggregate voting power of AT&T Comcast Class
A common stock will not be diluted by additional issuances of any
other class of AT&T Comcast stock and will be reduced only in limited
circumstances. Under the Alternative Structure, holders of Comcast
Class A common stock will receive shares of AT&T Comcast Class A
common stock (approximately 22 million shares in the aggregate) while
holders of AT&T common stock will receive shares of a different class
of AT&T Comcast common stock, the AT&T Comcast Class C common stock.
Upon completion of the AT&T Comcast transaction under the Alternative
Structure, there will be outstanding only approximately 22 million
shares of AT&T Comcast Class A common stock.
17. Q. Why is the Preferred Structure being recommended over the Alternative
Structure?
A The Comcast Board believes that holders of Comcast Class A common
stock would benefit from the increased liquidity of the AT&T Comcast
shares they receive under the Preferred Structure and that this
benefit outweighs the potential benefits of the greater per share
voting rights of the AT&T Comcast Class A common stock under the
Alternative Structure. If the Preferred Structure is implemented,
assuming the Microsoft transaction is completed and AT&T Comcast is
not required to make any additional payments of AT&T Comcast common
stock to AT&T Broadband shareholders in connection with the AT&T
Comcast transaction, upon completion of the AT&T Comcast transaction,
there will be outstanding approximately 1.37 billion shares of AT&T
Comcast Class A common stock. By contrast, if the Alternative
Structure is implemented and regardless of whether or not the
Microsoft transaction is completed or AT&T Comcast is required to
make any additional payments of AT&T Comcast common stock to AT&T
Broadband shareholders in connection with the AT&T Comcast
transaction, upon completion of the AT&T Comcast transaction, there
will only be outstanding approximately 22 million shares of AT&T
Comcast Class A common stock.
18. Q What will happen to my Comcast shares if the AT&T Comcast transaction
is completed?
A Under both the Preferred Structure and the Alternative Structure,
each share of Comcast Class A common stock, Comcast Class B common
stock and Comcast Class A Special common stock that is outstanding
immediately prior to the completion of the mergers will be converted
in the Comcast merger into the right to receive one share of AT&T
Comcast Class A common stock, AT&T Comcast Class B common stock and
AT&T Comcast Class A Special common stock, respectively.
19. Q If I am also an AT&T shareholder, what will happen to my AT&T shares
if the AT&T Comcast transaction is completed?
A In the spin-off, AT&T shareholders will receive one share of AT&T
Broadband common stock for each share of AT&T common stock they hold.
AT&T shareholders will continue to hold their shares of AT&T common
stock after the AT&T Comcast transaction is completed, and those
shares will represent an interest in the communications business of
AT&T.
Assuming that AT&T Comcast is not required to make any additional
payments of AT&T Comcast common stock to AT&T Broadband shareholders
in connection with the AT&T Comcast transaction, if the AT&T
Broadband exchange ratio were determined as of May 14, 2002, the date
of effectiveness of the registration statement in which the joint
proxy statement/prospectus is included, AT&T Broadband shareholders
would receive 0.35 shares of AT&T Comcast Class A common stock (under
the Preferred Structure) or 0.35 shares of AT&T Comcast Class C
common stock (under the Alternative Structure) in the AT&T Broadband
merger for each of their shares of AT&T Broadband common stock.
Certain factors described in the joint proxy statement/prospectus
will result in the actual exchange ratio varying from the 0.35
estimate calculated as of May 14, 2002, the date of effectiveness of
the statement in which the joint proxy statement/prospectus is
included.
20. Q What do shareholders need to do now?
A After carefully reading and considering the information contained in
the joint proxy statement/prospectus, please respond by completing,
signing and dating your proxy card or voter instruction form and
returning it in the postage-paid envelope enclosed with the joint
proxy statement/prospectus or, if available, by submitting your proxy
or voting instructions by telephone or through the Internet as soon
as possible so that your shares may be represented at the meeting.
Voting is all that is necessary at this time. Shareholders should not
send in their stock certificates.
21. Q How can registered and beneficial shareholders vote their proxy?
A Registered shareholders and most beneficial holders that hold shares
through a bank or broker may vote by telephone or via the Internet. If
one of these options is available to you, we strongly encourage you to
use it because it is faster and less costly. Registered shareholders
of Comcast can vote by telephone by calling 1-877-779-8683 or via the
Internet at http:// www.eproxyvote.com/cmcsa1. If you are a beneficial
holder of Comcast common stock and you hold shares through a bank or
broker, you will receive separate voting instructions on the form you
receive from your bank or broker.
22. Q What if a shareholder returns the proxy card but does not mark it to
show how the shareholder is voting?
A If the proxy card is signed and returned without specifying voting
choices, the shares will be voted as recommended by the Comcast Board
of Directors.
23. Q Can a shareholder revoke and or change his/her vote after he or she
has delivered a proxy?
A Yes. You can change your vote at any time before your proxy is voted
at the meeting. You can do this in one of three ways.
(1) First, you can revoke your proxy.
(2) Second, you can submit a new proxy with a later date.
(3) Third, you can attend your meeting and vote in person.
If you choose either of the first two methods set forth above, you
must submit your notice of revocation or your new proxy to the
secretary of Comcast before the meeting. If your shares are held in
an account at a brokerage firm or bank, you should contact your
brokerage firm or bank to change your vote. If your shares are held
in the name of your broker, bank or other nominee and you wish to
change your vote by attending the meeting and voting in person, you
must obtain a proxy in your name from your broker, bank or other
nominee in order to vote by ballot at the meeting.
You may change your vote by submitting a new vote by telephone or via
the Internet regardless of whether you submitted your earlier proxy
by mail, telephone or via the Internet.
24. Q If my shares are held in an account in a brokerage firm or bank, will
my broker vote my shares for me?
A If you do not provide your broker with instructions on how to vote
your brokerage account shares, your broker will not be permitted to
vote them on any of the Comcast proposals. You should therefore be
sure to provide your broker with instructions on how to vote your
shares. A broker non-vote will have no effect on the outcome of any
of the Comcast proposals.
25. Q Should shareholders send in their physical stock certificates now?
A No. If you currently hold your Comcast shares in certificated form,
after the AT&T Comcast transaction is completed you will receive
written instructions from the exchange agent on how to exchange your
Comcast stock certificates for your AT&T Comcast shares. The only
action needed to be taken now is to vote.
26. Q What do shareholders who hold their Comcast shares in uncertificated
form have to do?
A If you currently hold your Comcast shares in uncertificated form,
after the AT&T Comcast transaction is completed your AT&T Comcast
shares will be delivered to you without your having to take any
action.
27. Q How will shareholders be notified what to do after completion of the
AT&T Comcast transaction?
A AT&T and Comcast will jointly designate an exchange agent to
coordinate (1) the exchange of Comcast common stock in the Comcast
merger for AT&T Comcast common stock, (2) the exchange of AT&T
Comcast common stock in respect of the AT&T Broadband common stock
converted in the AT&T Broadband merger and (3) the payment of cash to
the former holders of AT&T Broadband common stock instead of
fractional shares of AT&T Comcast common stock.
As soon as reasonably practicable after completion of the mergers,
the exchange agent will mail to each holder of record of a
certificate that immediately prior to the completion of the mergers
represented outstanding shares of
Comcast common stock (1) a letter of transmittal and (2) instructions
for effecting the surrender of the Comcast certificates in exchange
for shares of AT&T Comcast.
28. Q Which company is being acquired?
A For accounting purposes, the company that is being acquired is AT&T
Broadband. The identification of Comcast as the acquiring entity for
accounting purposes was made after careful consideration of all facts
and circumstances.
29. Q In what lines of businesses is Comcast involved?
A 1. Cable -- through the development, management and operation of
broadband communications networks, 2. Commerce -- through QVC,
its electronic retailing subsidiary, and 3. Content -- through
its consolidated subsidiaries Comcast Spectacor, Comcast
SportsNet, Comcast SportsNet Mid-Atlantic, Comcast Sports
Southeast, E! Entertainment Television, The Golf Channel and
Outdoor Life Network, and through its other programming
investments.
30. Q Why are the companies combining?
A Comcast and AT&T believe that the combined strengths of Comcast and
AT&T's broadband business will enable them to create the world's
premier broadband communications company. The AT&T Comcast transaction
will combine the companies' extensive broadband communications
networks, technologically advanced broadband delivery systems and
managerial expertise to build a business that Comcast and AT&T expect
will create substantial long-term value for shareholders of both
companies.
31. Q How will the AT&T Comcast transaction enhance Comcast's future
economic prospects?
A Comcast and AT&T believe that AT&T Comcast will grow the broadband
business with more efficiency to create stronger operating and
financial results than either Comcast or AT&T Broadband could achieve
on its own.
32. Q When do you expect to complete the AT&T Comcast transaction?
A Comcast expects to complete the AT&T Comcast transaction by the end of
2002.
33. Q What will the ticker symbols be for the classes of AT&T Comcast stock
and where will they be listed?
A AT&T Comcast Class A common stock, AT&T Comcast Class A Special
common stock and, if the Alternative Structure is implemented, AT&T
Comcast Class C common stock will be quoted on The Nasdaq Stock
Market under the ticker symbols "CMCSA," "CMCSK" and, if applicable,
"CMCSJ," respectively.
34. Q Is the Comcast merger a taxable event?
A Comcast expects that the Comcast merger will be tax-free for U.S.
federal income tax purposes to Comcast shareholders.
35. Q Is approval of the AT&T Consumer Services Group tracking stock
proposal, the AT&T reverse stock split proposal and the proposals
relating to the various AT&T annual meeting matters linked to the AT&T
Comcast transaction?
A No. The AT&T Comcast transaction is completely separate from the AT&T
Consumer Services Group tracking stock proposal, the AT&T reverse
stock split proposal and the proposals relating to the various AT&T
annual meeting matters. Approval of one is not a prerequisite or a
condition to the other.
36. Q What kind of share issuance will there be to AT&T Broadband
shareholders and Microsoft upon completion of the AT&T Comcast
transaction?
A AT&T Comcast will issue up to 1.235 billion shares of AT&T Comcast
common stock to holders of AT&T Broadband common stock in the AT&T
Broadband merger, not including 115 million shares to be issued to an
affiliate of Microsoft in the Microsoft transaction (which is
described in question 48) and assuming that AT&T Comcast is not
required to make any additional payments of AT&T Comcast common stock
to AT&T Broadband shareholders in connection with the AT&T Comcast
transaction.
37. Q What will the exchange ratio be per class of stock to shareholders of
Comcast common stock?
A The exchange ratio will be fixed at 1 to 1. Each share of Comcast
Class A common stock, Comcast Class B common stock and Comcast Class
A Special common stock that is outstanding immediately prior to the
completion of the mergers will be converted in the Comcast merger
into the right to receive one share of AT&T Comcast Class A common
stock, AT&T Comcast Class B common stock and AT&T Comcast Class A
Special common stock, respectively.
38. Q What will the exchange ratio be for Comcast stock options?
A AT&T Comcast will issue options to purchase shares of AT&T Comcast
common stock in exchange for all outstanding stock options of Comcast,
based on an exchange ratio of 1 to 1.
39. Q Will fractional shares be issued?
A No fractional shares will be issuable in the Comcast merger because
the Comcast exchange ratio is fixed at 1 to 1.
40. Q What percentage of AT&T Comcast's economic interest and voting power
will Comcast Corporation shareholders hold upon completion of the AT&T
Comcast transaction?
A Assuming the transaction with Microsoft is completed and AT&T Comcast
is not required to make any additional payments of AT&T Comcast
common stock to AT&T Broadband shareholders in connection with the
AT&T Comcast transaction, Comcast shareholders will own approximately
40.0% of AT&T Comcast's economic interest; and if the Preferred
Structure is implemented, 34.4% of AT&T Comcast's voting power or, if
the Alternative Structure is implemented, 38.5% of AT&T Comcast's
voting power.
41. Q What percentage of AT&T Comcast's economic interest will Comcast
Class A shareholders, Comcast Class B shareholders and Comcast Class A
Special shareholders hold upon completion of the AT&T Comcast
transaction?
A Assuming the transaction with Microsoft is completed and AT&T Comcast
is not required to make any additional payments of AT&T Comcast
common stock to AT&T Broadband shareholders in connection with the
AT&T Comcast transaction, Comcast Class A shareholders, Comcast Class
B shareholders and Comcast Class A Special shareholders, who
presently own approximately 2.3%, 1.0% and 96.7%, respectively, of
Comcast's economic interest, will own approximately 1.0%, 0.4% and
38.6%, respectively, of AT&T Comcast's economic interest.
42. Q What percentage of AT&T Comcast's voting power will Comcast Class A
shareholders hold upon completion of the AT&T Comcast transaction if
the Preferred Structure is implemented?
A If the Preferred Structure is implemented, assuming the transaction
with Microsoft is completed and AT&T Comcast is not required to make
any additional payments of AT&T Comcast common stock to AT&T
Broadband shareholders in connection with the AT&T Comcast
transaction, Comcast Class A shareholders, who presently own
approximately 13.4% of Comcast's voting power, will own approximately
1.1% of AT&T Comcast's voting power.
43. Q What percentage of AT&T Comcast's voting power will Comcast Class A
shareholders hold upon completion of the AT&T Comcast transaction if
the Alternative Structure is implemented?
A If the Alternative Structure is implemented, assuming the transaction
with Microsoft is completed and AT&T Comcast is not required to make
any additional payments of AT&T Comcast common stock to AT&T
Broadband shareholders in connection with the AT&T Comcast
transaction, Comcast Class A shareholders will own approximately
5.14% of AT&T Comcast's voting power.
44. Q What percentage of AT&T Comcast's voting power will Comcast Class B
shareholders hold upon completion of the AT&T Comcast transaction
under each capital structure proposed?
A Under either capital structure, Comcast Class B shareholders, who
presently own approximately 86.6% of Comcast's voting power, will own
33?% of AT&T Comcast's voting power.
45. Q What percentage of AT&T Comcast's voting power will Comcast Class A
Special shareholders hold upon completion of the AT&T Comcast
transaction under each capital structure proposed?
A Under either capital structure, Comcast Class A Special shareholders,
who presently have no voting rights, will own AT&T Comcast Class A
Special stock, which also will have no voting rights.
46. Q Who will hold the remaining percentage of AT&T Comcast's economic
interest and voting power upon completion of the AT&T Comcast
transaction?
A Assuming the transaction with Microsoft is completed and AT&T Comcast
is not required to make any additional payments of AT&T Comcast common
stock to AT&T Broadband shareholders in connection with the AT&T
Comcast transaction, Microsoft will hold AT&T Comcast's remaining
approximately 5.3% economic interest and 4.95% voting power.
47. Q What are the conditions to completion for the AT&T Comcast
transaction?
A 1. approval by AT&T shareholders of the AT&T transaction proposal
and the AT&T Comcast charter proposal and approval by Comcast
shareholders of the Comcast transaction proposal and the AT&T
Comcast charter proposal (but not the preferred structure
proposal);
2. expiration or termination of the applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended;
3. the absence of any law, regulation or order prohibiting the
completion of the AT&T Comcast transaction;
4. receipt of all required regulatory approvals other than those the
failure of which to be obtained would not reasonably be expected
to have a material adverse effect on either Comcast or AT&T
Broadband;
5. accuracy of the representations and warranties of the other
party, including with respect to the absence of a material
adverse effect;
6. receipt and continuing effectiveness of an Internal Revenue
Service ruling or rulings, or an opinion from tax counsel
acceptable to Comcast and AT&T, to the effect that, for U.S.
federal income tax purposes, the AT&T Broadband spin-off will be
tax-free to AT&T and its shareholders, the mergers will not cause
the AT&T Broadband spin-off to fail to be qualified as a tax-free
transaction, and the AT&T Broadband spin-off will not cause the
distributions by AT&T of the common stock of AT&T Wireless
Services, Inc. or of Liberty Media to fail to qualify as tax-free
transactions;
7. receipt by each party of an opinion of its counsel to the effect
that the combination of AT&T Broadband and Comcast will qualify
as a tax-free transaction for U.S. federal income tax purposes;
8. performance by Sural LLC in all material respects of its
obligations under the support agreement; and
9. receipt of appropriate note consents, or the defeasance, purchase
or acquisition of indebtedness, in respect of at least 90% in
aggregate principal amount of the securities issued under the
AT&T indenture, dated as of September 7, 1990, and outstanding as
of December 19, 2001.
48. Q What is the Microsoft transaction?
A Comcast, AT&T and AT&T Comcast entered into an exchange agreement with
Microsoft whereby at the time of the AT&T Broadband spin-off Microsoft
will exchange $5 billion of quarterly income preferred securities, or
QUIPS, issued by AT&T Finance Trust I, an AT&T subsidiary, for a
number of shares of AT&T Broadband common stock that will be converted
in the AT&T Broadband merger into 115 million shares of AT&T Comcast
Class A common stock under the Preferred Structure or AT&T Comcast
Class C common stock under the Alternative Structure. To the extent
necessary so that Microsoft will not hold more than 4.95% of AT&T
Comcast's voting power as a result of the AT&T Comcast transaction,
Microsoft has agreed to accept shares of the non-voting AT&T Comcast
Class A Special common stock in the AT&T Broadband merger, on a
one-for-one basis, instead of shares of voting AT&T Comcast common
stock.
49. Q What happens if the Microsoft transaction is not completed?
A 1. If the Microsoft transaction is not completed, Comcast Class A
shareholders, Comcast Class B shareholders, Comcast Class A
Special shareholders and AT&T shareholders will own approximately
1%, 0.4%, 40.6% and 57.7%, respectively, of AT&T Comcast's
economic interest upon completion of the AT&T Comcast
transaction.
2. In addition, if the Microsoft transaction is not completed, AT&T
Comcast Class A shareholders, under the Preferred Structure, or
AT&T Comcast Class C shareholders, under the Alternative
Structure, will own an additional 4.95% of AT&T Comcast's voting
power upon completion of the AT&T Comcast transaction.
3. If the transaction with Microsoft is not completed, AT&T Comcast
may have significant additional debt and more stringent
limitations on its ability to issue equity. AT&T Broadband will
either assume AT&T's obligations to Microsoft under the trust
preferred securities, or QUIPS, issued by AT&T Finance Trust I or
pay AT&T an amount in cash equal to the fair market value of the
QUIPS and indemnify AT&T for certain possible related
liabilities.
50. Q What is the Hart-Scott-Rodino Antitrust Improvements Act of 1976?
A In general, the Act requires that certain proposed acquisitions of
voting stock or assets must be reported to the Federal Trade
Commission and the Department of Justice prior to consummation. The
parties must then wait a specified period, usually 30 days (15 days
in the case of a cash tender offer or a bankruptcy sale), before they
may complete the transaction. Whether a particular acquisition is
subject to these requirements depends upon the value of the
acquisition and the size of the parties as measured by their sales
and assets. Small acquisitions, acquisitions involving small parties,
and other classes of acquisitions that are less likely to raise
antitrust concerns are excluded from the Act's coverage.
On February 21, 2002, Comcast and AT&T received a request from the
Department of Justice, the reviewing agency, for additional
information and documentary material regarding the mergers. Comcast
and AT&T intend to cooperate with DOJ staff in producing the
requested documents and other information. Unless
extended by agreement of the parties, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 waiting period will expire thirty calendar
days after Comcast and AT&T certify to the DOJ that they have
substantially complied with the DOJ's request for additional
information.
51. Q What atypical governance arrangements will be implemented for AT&T
Comcast upon completion of the AT&T Comcast transaction?
A In connection with the AT&T Comcast transaction, AT&T Comcast will
implement a number of governance arrangements that are atypical for a
large, publicly held corporation. A number of these arrangements
relate to the election of the AT&T Comcast Board.
o The term of the AT&T Comcast Board upon completion of the AT&T
Comcast transaction will not expire until the 2004 annual
meeting of AT&T Comcast shareholders. Since AT&T Comcast
shareholders will not have the right to call special meetings of
shareholders or act by written consent and AT&T Comcast
directors will be able to be removed only for cause, AT&T
Comcast shareholders will not be able to replace the initial
AT&T Comcast Board members prior to that meeting.
o After the 2004 annual meeting of AT&T Comcast shareholders, AT&T
Comcast directors will be elected annually. Even then, however,
it will be difficult for an AT&T Comcast shareholder, other than
Sural LLC or a successor entity controlled by Brian L. Roberts,
to elect a slate of directors of its own choosing to the AT&T
Comcast Board. Brian L. Roberts, through his control of Sural
LLC or a successor entity, will hold a 33?% nondilutable voting
interest in AT&T Comcast stock.
In addition, AT&T Comcast will adopt a shareholder rights plan upon
completion of the AT&T Comcast transaction that will prevent any
holder of AT&T Comcast stock, other than any holder of AT&T Comcast
Class B common stock or any of such holder's affiliates, from
acquiring AT&T Comcast stock representing more than 10% of AT&T
Comcast's voting power without the approval of the AT&T Comcast
Board. In addition to the governance arrangements relating to the
AT&T Comcast Board, Comcast and AT&T have agreed to a number of
governance arrangements which will make it difficult to replace the
senior management of AT&T Comcast.
o Upon completion of the AT&T Comcast transaction, C. Michael
Armstrong, Chairman of the Board and CEO of AT&T, will be the
Chairman of the Board of AT&T Comcast.
o Brian L. Roberts, President of Comcast, will be the CEO and
President of AT&T Comcast. After the 2005 annual meeting of AT&T
Comcast shareholders, Brian L. Roberts will also be the Chairman
of the Board of AT&T Comcast. o Prior to the sixth anniversary
of the 2004 annual meeting of AT&T Comcast shareholders, unless
Brian L. Roberts ceases to be Chairman of the Board or CEO of
AT&T Comcast prior to such time, the Chairman of the Board and
CEO of AT&T Comcast will be able to be removed only with the
approval of at least 75% of the entire AT&T Comcast Board. This
supermajority removal requirement will make it unlikely that C.
Michael Armstrong or Brian L. Roberts will be removed from their
management positions.
52. Q What is the role of Sural LLC in the AT&T Comcast transaction?
A Sural LLC, which is controlled by Brian L. Roberts, President of
Comcast, and as of the record date owned approximately 86.7% of the
combined voting power of Comcast common stock, has entered into a
support agreement with, among others, AT&T pursuant to which it has
agreed to vote its shares of Comcast common stock in favor of the
Comcast proposals. Sural's vote in favor of the Comcast transaction
proposal and the AT&T Comcast charter proposal will be sufficient to
approve such proposals at the Comcast meeting without the vote of any
other Comcast shareholder.
53. Q What will be the composition of the AT&T Comcast Board and who will
manage AT&T Comcast?
A The AT&T Comcast Board will initially be comprised of twelve
individuals, five of whom will be AT&T directors designated by AT&T
from the AT&T Board immediately prior to completion of the AT&T
Comcast transaction, five of whom will be existing Comcast directors
designated by Comcast from the Comcast Board immediately prior to
completion of the AT&T Comcast transaction and two of whom will be
independent persons jointly designated by Comcast and AT&T.
Except for pre-approved designees, the individuals designated by each
of Comcast and AT&T will be mutually agreed upon by Comcast and AT&T.
Ralph J. Roberts, Brian L. Roberts, Sheldon M. Bonovitz, Julian A.
Brodsky and Decker Anstrom are pre-approved Comcast director
designees and C. Michael Armstrong is the sole pre-approved AT&T
director designee.
o Brian L. Roberts, President of Comcast, will become Chief
Executive Officer and President of AT&T Comcast. The other
members of senior management of AT&T Comcast upon completion of
the AT&T Comcast transaction will be selected by Brian L.
Roberts in consultation with C. Michael Armstrong.
o C. Michael Armstrong, Chairman of the Board and Chief Executive
Officer of AT&T, will become Chairman of the Board of AT&T
Comcast and will serve as Chairman of the Board until the 2005
annual meeting of AT&T Comcast shareholders, but he will serve
as non-executive Chairman of the Board after April 1, 2004 and
until the 2005 annual meeting of AT&T Comcast shareholders.
54. Q Based on historic data what kind of trading prices can AT&T Comcast
shareholders expect?
A As AT&T and Comcast complete the AT&T Comcast transaction, shares of
AT&T Comcast common stock will begin trading publicly for the first
time. Until an orderly trading market for AT&T Comcast common stock
develops, and after that time as well, there may be significant
fluctuations in price.
55. Q What kind of dividends can AT&T Comcast shareholders expect to
receive?
A AT&T Comcast does not currently intend to pay dividends after
completion of the AT&T Comcast transaction.
56. Q Does Comcast have a shareholder rights plan, and will AT&T Comcast
have a shareholder rights plan?
A Comcast does not currently have a shareholder rights plan in effect.
AT&T Comcast will adopt a shareholder rights plan upon completion of
the AT&T Comcast transaction. The rights plan will prevent any holder
of AT&T Comcast stock, other than any holder of AT&T Comcast Class B
common stock or any of such holder's affiliates, from acquiring AT&T
Comcast stock representing more than 10% of AT&T Comcast's voting
power without the approval of the AT&T Comcast Board.
57. Q What are the risks associated with the AT&T Comcast transaction?
A To review risks associated with the AT&T Comcast transaction, please
see the heading "Risk Factors" in Chapter One of the joint proxy
statement/prospectus.
58. Q What opinion did the financial advisors draw about the soundness and
fairness of the Comcast merger?
A Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, financial
advisors to Comcast, each rendered an opinion dated December 19, 2001
to the effect that as of that date and based upon and subject to the
assumptions, qualifications and limitations set forth therein, the
conversion ratios in the Comcast merger applicable to holders of
Comcast common stock, in the aggregate, were fair, from a financial
point of view, to Comcast shareholders, taken together.
Note: The following notice is included to meet certain legal requirements:
FORWARD-LOOKING STATEMENTS
The enclosed information contains forward-looking statements within the
meaning of the "safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. Investors are cautioned that such
forward-looking statements with respect to revenues, earnings, performance,
strategies, prospects and other aspects of the businesses of AT&T Corp.
("AT&T"), Comcast Corporation ("Comcast") and, after the completion of the
proposed transaction between AT&T and Comcast, AT&T Comcast Corporation ("AT&T
Comcast") are based on current expectations that are subject to risks and
uncertainties. A number of factors could cause actual results or outcomes to
differ materially from those indicated by such forward-looking statements.
These factors include, but are not limited to, risks and uncertainties set
forth in AT&T's, Comcast's and AT&T Comcast's filings with the Securities and
Exchange Commission ("SEC"), including risks and uncertainties relating to:
failure to obtain and retain expected synergies from the proposed transaction,
delays in obtaining, or adverse conditions contained in, any required
regulatory approvals, changes in laws or regulations, availability and cost of
capital and other similar factors. Readers are referred to AT&T's and Comcast's
most recent reports filed with the SEC. AT&T, Comcast and AT&T Comcast are
under no obligation to (and expressly disclaim any such obligation to) update
or alter their forward-looking statements whether as a result of new
information, future events or otherwise.
ADDITIONAL INFORMATION
In connection with the proposed transaction, AT&T, Comcast and AT&T
Comcast have filed a joint proxy statement/prospectus with the SEC. INVESTORS
AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE JOINT PROXY
STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION BECAUSE IT CONTAINS
IMPORTANT INFORMATION. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus and other documents containing information
about AT&T, Comcast and AT&T Comcast, without charge, at the SEC's web site at
http://www.sec.gov. Free copies of AT&T's filings may be obtained by directing
a request to AT&T Corp., 295 North Maple Avenue, Basking Ridge, N.J. 07920,
Attention: Investor Relations. Free copies of Comcast's and AT&T Comcast's
filings may be obtained by directing a request to Comcast Corporation, 1500
Market Street, Philadelphia, Pennsylvania 19102-2148, Attention: General
Counsel.
AT&T, Comcast and their respective directors, executive officers and other
members of their management and employees may be soliciting proxies from their
respective stockholders in connection with the proposed transaction.
Information concerning Comcast's participants in the solicitation is contained
in a filing made by Comcast with the Commission pursuant to Rule 14a-12 on July
9, 2001.