<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COMCAST CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(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)(4) 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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] 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:
-------------------------------------------------------------------------
(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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Notes:
<PAGE>
[LOGO OF COMCAST(R) CORPORATION APPEARS HERE]
1500 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19102-2148
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 18, 1997
----------------
The Annual Meeting of Shareholders of Comcast Corporation (the "Company")
will be held on Wednesday, June 18, 1997 at 9:00 a.m. local time at the
offices of the Company, 1500 Market Street, 33rd Floor, Philadelphia,
Pennsylvania, for the following purposes:
1. To elect ten 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 the Comcast Corporation 1996
Executive Cash Bonus Plan.
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 1997 fiscal year.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The close of business on May 5, 1997 has been fixed as the record date for
the meeting. All shareholders of record at that time are entitled to notice
of, and all such holders of Class A Common Stock and Class B Common Stock are
entitled to vote at, the meeting and any adjournment or postponement thereof.
Holders of Class A Special Common Stock are not entitled to vote at 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, 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 to
give voting instructions 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. A copy of the Company's Annual Report on Form 10-K is attached and a
copy of its Summary Annual Report is enclosed.
STANLEY WANG
Secretary
May 16, 1997
<PAGE>
[LOGO OF COMCAST(R) CORPORATION APPEARS HERE]
1500 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19102-2148
----------------
PROXY STATEMENT
----------------
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 Wednesday, June 18, 1997
at 9:00 a.m. local time at the offices of the Company, 1500 Market Street,
33rd 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, 1997.
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 SECURITIES AND PRINCIPAL HOLDERS THEREOF
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on May 5, 1997, the record date, the Company had
outstanding [33,283,729] shares of Class A Common Stock, par value $1.00 per
share, 8,786,250 shares of Class B Common Stock, par value $1.00 per share,
and [283,525,310] shares of Class A Special Common Stock, par value $1.00 per
share.
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
and 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, Class A Common Stock and Class B Common Stock
shareholders shall not have cumulative voting rights.
1
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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 as to each such
matter. 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 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 ten 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" or "Against" 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 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 approval of each of the other proposals submitted to shareholders in
accordance with the foregoing notice of meeting and as set forth in this Proxy
Statement are assured.
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 at
the close of business on February 28, 1997. 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.
<TABLE>
<CAPTION>
AMOUNT PERCENT
TITLE OF NAME AND ADDRESS OF BENEFICIALLY OF
VOTING CLASS BENEFICIAL OWNER OWNED CLASS
- - ------------ ------------------- ------------ -------
<S> <C> <C> <C>
Class A Common Stock The Capital Group Companies, Inc. 2,692,500(1) 8.0%
333 South Hope Street
Los Angeles, CA 90071
Neuberger & Berman, LLC 2,145,521(2) 6.4%
605 Third Avenue
New York, NY 10158-3698
Ralph J. Roberts 2,164,107(3)(4) 6.5%
1500 Market Street
Philadelphia, PA 19102-2148
Class B Common Stock Ralph J. Roberts 9,444,375(4) 100.0%
1500 Market Street
Philadelphia, PA 19102-2148
</TABLE>
- - --------
(1) The information contained in this table with respect to The Capital Group
Companies, Inc. ("TCG") is based upon filings made on Form 13F by TCG and
its wholly owned subsidiaries, Capital Research and Management Company
("Capital Research") and Capital Guardian Trust Company ("Capital
Guardian"), setting forth information as of December 31, 1996. Based upon
such filings, 1,950,000 and 742,500 of these shares are beneficially
owned by Capital Research and Capital Guardian, respectively.
2
<PAGE>
(2) The information contained in this table with respect to Neuberger &
Berman, LLC ("Neuberger") is based upon a filing made on Schedule 13G by
Neuberger, setting forth information as of February 10, 1997. Based upon
such filing, beneficial ownership of 1,125,000 of these shares is shared
with Neuberger & Berman Management, Inc., a wholly owned subsidiary of
Neuberger. The Schedule 13G indicates that Neuberger has shared
dispositive power as to 2,145,521 shares, shared voting power as to
1,125,000 shares, and sole voting power as to 177,825 shares.
(3) At February 28, 1997, Sural Corporation ("Sural"), a Delaware corporation,
owned 1,845,037 shares of Class A Common Stock. Mr. Roberts, Chairman of
the Board of Directors of the Company, and members of his family own all
of the voting securities of Sural. Pursuant to Rule 13d-3 of the Exchange
Act, Mr. Roberts is deemed to be the beneficial owner of the shares of
Class A Common Stock owned by Sural. Also includes 319,070 shares owned
directly by Mr. Roberts. See also the last two sentences of note (4)
below.
(4) At February 28, 1997, Sural was the sole owner of the Company's Class B
Common Stock. Pursuant to Rule 13d-3 of the Exchange Act, Mr. Roberts is
deemed to be the beneficial owner of the shares of Class B Common Stock
owned by Sural. In addition to the shares owned by Sural, Mr. Roberts has
options to purchase 658,125 shares of Class B Common Stock, all of which
are currently exercisable. 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 constitute approximately 81% of the voting
power of the two classes of the Company's voting Common Stock combined
(82% if all other shares of Class A Common Stock which he is deemed to
beneficially own and shares underlying his options to purchase Class B
Common Stock currently exercisable are included). The Class B Common Stock
is convertible on a share-for-share basis into Class A Common Stock or
Class A Special Common Stock. If Sural and Mr. Roberts were to convert the
Class B Common Stock which they are deemed to beneficially own into Class
A Common Stock, Mr. Roberts would beneficially own 11,608,482 shares of
Class A Common Stock (approximately 27% of the Class A Common Stock). Mr.
Ralph J. Roberts has indicated his intention to transfer control of Sural
to Mr. Brian L. Roberts upon receipt of various regulatory and other
approvals required in connection with such transfer.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information regarding the Class A
Common Stock (one vote per share) and Class A Special Common Stock (generally
non-voting) beneficially owned by each director and nominee for director of
the Company, by Mr. Ralph J. Roberts (the "Chief Executive Officer"), and by
each of the Company's other four most highly compensated executive officers
during 1996 and by all directors and executive officers of the Company as a
group, at the close of business on February 28, 1997. 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.
<TABLE>
<CAPTION>
AMOUNT BENEFICIALLY OWNED(1) PERCENT OF CLASS(1)
---------------------------------- ----------------------
CLASS A CLASS A
NAME OF BENEFICIAL OWNER CLASS A SPECIAL CLASS A SPECIAL
- - ------------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
Daniel Aaron............ 189,310 662,675 (2) (2)
John R. Alchin(3)....... -- 239,125(4) (2) (2)
Gustave G. Amsterdam.... 25,269 141,018 (2) (2)
Sheldon M. Bonovitz..... 17,705(5) 232,163(6) (2) (2)
Julian A. Brodsky(3).... 280,559(7) 1,761,242 (2) (2)
Joseph L. Castle, II.... 375 20,797 (2) (2)
Brian L. Roberts(3)..... 4,061(8) 517,362(9) (2) (2)
Ralph J. Roberts(10).... 2,164,107(11) 10,506,929(12) 6.5% 3.6%
Lawrence S. Smith(3).... -- 314,159(13) (2) (2)
Bernard C. Watson....... -- 22,800 (2) (2)
Irving A. Wechsler...... 122,763 507,277 (2) (2)
Anne Wexler............. -- 19,050 (2) (2)
All directors and
executive officers as a
group (13 persons)(3).. 2,845,040(5)(7) 15,149,636(4)(6) 8.5% 5.2%
(8)(11) (9)(12)(13)(14)
</TABLE>
- - --------
(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 28, 1997 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 and executive officers as a group, hold
currently exercisable options or options exercisable within 60 days of
February 28, 1997: Mr. Aaron, 13,800 shares; Mr. Alchin, 189,565 shares;
Mr. Amsterdam, 18,300 shares; Mr. Bonovitz, 18,300 shares; Mr. Brodsky,
934,646 shares; Mr. Castle, 18,300 shares; Mr. Brian L. Roberts, 374,517
shares; Mr. Ralph J. Roberts, 4,412,566 shares; Mr. Smith, 269,930 shares;
Mr. Watson, 18,300 shares; Mr. Wechsler, 13,800 shares; Ms. Wexler, 18,300
shares; and all directors and executive officers as a group, 6,444,976
shares.
(2) Less than one percent of the applicable class.
(3) The following named executive officers also beneficially own shares of
common stock of QVC, Inc., a 57%-owned subsidiary of the Company, issuable
under currently exercisable options or options exercisable within 60 days
of February 28, 1997, to purchase such shares (see note (8) to the
"Summary Compensation Table"): Mr. Alchin, 1,200 shares; Mr. Brodsky,
1,600 shares; Mr. Brian L. Roberts, 3,200 shares; Mr. Smith, 1,600 shares;
and all directors and executive officers as a group, 7,600 shares. The
number of shares of common stock of QVC, Inc. beneficially owned by each
of them, and by all directors and executive officers as a group, represent
less than one percent of the common stock of QVC, Inc.
(4) Includes 15 shares of Class A Special Common Stock owned in the Comcast
Corporation Retirement-Investment Plan, as to which shares he disclaims
beneficial ownership.
4
<PAGE>
(5) Includes 5,486 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 11,189 shares of Class A Special Common Stock held in trust or as
a custodian for his children, 16,044 shares owned by his wife, 164,946
shares held by him as trustee for a testamentary trust, and 6,738 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 20,000 shares of Class A Common Stock owned by a charitable
foundation of which he and members of his family are directors and
officers, as to which shares he disclaims beneficial ownership.
(8) Includes 1,356 shares of Class A Common Stock owned by his wife, as to
which shares he disclaims beneficial ownership. See also note (4) to the
table under the caption "Principal Shareholders."
(9) Includes 678 shares of Class A Special Common Stock owned by his wife,
20,542 shares owned in the Comcast Corporation Retirement-Investment Plan,
and 59,140 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. See also note (4) to the table under the caption
"Principal Shareholders."
(10) Pursuant to Rule 13d-3 of the Exchange Act, Mr. Ralph J. Roberts is also
deemed to be the beneficial owner of 100% of the outstanding shares of
the Company's Class B Common Stock owned by Sural. See notes (3) and (4)
to the table under the caption "Principal Shareholders."
(11) Includes 1,845,037 shares of Class A Common Stock owned by Sural. See
notes (3) and (4) to the table under the caption "Principal
Shareholders."
(12) Includes 5,315,772 shares of Class A Special Common Stock owned by Sural
and 11,800 shares owned by a charitable foundation of which he and his
wife are trustees and as to which shares he disclaims beneficial
ownership. See also note (4) to the table under the caption "Principal
Shareholders."
(13) Includes 20,901 shares of Class A Special Common Stock owned in a Keogh
Plan, as to which shares he disclaims beneficial ownership.
(14) Includes 15 shares of Class A Special Common Stock owned by an executive
officer other than those named above in the Comcast Corporation
Retirement-Investment Plan, as to which shares beneficial ownership is
disclaimed.
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, 1996 through December 31, 1996 were made on a timely basis,
except for one report of a sale of stock by Joseph L. Castle, II and one
report of a sale of stock by Daniel Aaron, for which Forms 4 were
inadvertently filed late.
5
<PAGE>
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 Company's other four most highly compensated executive officers:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------- ---------------------
ALL OTHER
COMPENSATION
RESTRICTED NUMBER OF (PRINCIPALLY
OTHER ANNUAL STOCK SECURITIES SPLIT-DOLLAR
NAME AND BONUS ($) COMPENSATION AWARDS UNDERLYING INSURANCE
PRINCIPAL POSITION(1) YEAR SALARY ($) (2) ($) ($)(3) OPTIONS(#) BENEFITS)($)(4)
- - --------------------- ---- ---------- --------- ------------ ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ralph J. Roberts........ 1996 $ 842,223 $ -- $1,182,376(5)(6) $ -- -- $5,759,957(6)
Chairman of the 1995 821,360 -- 780,983(5)(6) -- -- 4,646,420(6)
Board of Directors 1994 800,000 -- 669,619(5) -- 2,220,000(7) 3,881,881
Julian A. Brodsky....... 1996 $ 625,000 $300,000 $ 14,121(5) $ -- 4,000(8) $1,095,051
Vice Chairman of the 1995 625,000 -- 24,705(5) -- 250,000(7) 1,285,803
Board of Directors 1994 561,750 -- 88,663(5) -- 805,000(7) 742,466
Brian L. Roberts........ 1996 $ 625,000 $662,000 $ 2,336 $ -- 8,000(8) $ 33,249
President 1995 625,000 242,000 96,881 -- 500,000(7) 32,383
1994 535,000 126,000 142,755(9) 308,000 535,000(7) 34,589
Lawrence S. Smith....... 1996 $ 625,000 $381,000 $ 1,126 $ -- 4,000(8) $ 34,727
Executive Vice 1995 600,000 61,000 39,755 -- 400,000(7) 33,924
President 1994 380,000 68,000 18,882 110,688 200,000(7) 37,041
John R. Alchin.......... 1996 $ 526,000 $291,500 $ 1,276 $ -- 3,000(8) $ 35,230
Senior Vice 1995 502,000 29,000 56,844 -- 300,000(7) 34,531
President-Treasurer 1994 355,000 31,000 20,140 -- 135,000(7) 38,318
</TABLE>
- - --------
(1) The Company's by-laws do not provide for the position of "Chief Executive
Officer." For purposes of 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 bonuses earned in 1996 include bonuses payable under the Comcast
Corporation 1996 Executive Cash Bonus Plan. See "Report of the
Compensation Committee and the Subcommittee on Performance-Based
Compensation on Executive Compensation--Bonuses" and "Proposal Two--
Approval of the Comcast Corporation 1996 Executive Cash Bonus Plan." In
addition, the column includes bonuses paid to the named persons in 1996,
1995 and 1994 relating to the termination of the Company's discretionary
bonus plan (see "Report of the Compensation Committee and the Subcommittee
on Performance-Based Compensation on Executive Compensation--Effect of
Internal Revenue Code Section 162(m)"), and guaranteed bonuses of $125,000
paid to Mr. Brian L. Roberts in 1996 and 1995 and $5,000 paid to Mr. Smith
in 1996.
(3) This column represents the dollar value of the shares of restricted stock
awarded to the named persons as of the date such shares were awarded. The
awards of restricted stock are made in shares of Class A Special Common
Stock ("Restricted Stock") pursuant to the Company's 1990 Restricted Stock
Plan. The award to Mr. Brian L. Roberts in 1994 vests 30% on January 2 of
the first year after grant, 15% on January 2 of each of the next two
years, and the balance on the following January 2. The award to Mr. Smith
in 1994 vested in its entirety on January 2, 1995. At December 31, 1996,
the unvested Restricted Stock holdings for Mr. Brodsky were 41,250 shares
(with a market value at that date of $734,766); for Mr. Brian L. Roberts
were 60,175 shares (with a market value at that date of $1,071,867); for
Mr. Smith were 12,375 shares (with a market value
6
<PAGE>
at that date of $220,430); and for Mr. Alchin were 12,375 shares (with a
market value at that date of $220,430). Mr. Ralph J. Roberts does not hold
any shares of Restricted Stock. Dividends are not payable and do not accrue
on unvested shares of Restricted Stock.
(4) The amounts shown in this column principally represent benefits associated
with split-dollar life insurance policies. In accordance with the terms of
the split-dollar life insurance policies, 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
1996): (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 (Messrs. Ralph J.
Roberts, $5,096,207; Brodsky, $1,077,863; Brian L. Roberts, $26,018; Smith,
$27,422; and Alchin, $28,000), 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 1996 (Messrs. Ralph J. Roberts, $1,914,544; Brodsky,
$288,736; Brian L. Roberts, $11,626; Smith, $15,159; and Alchin, $15,083);
(b) Company payments to the named executive officers to cover their
premiums attributable to the term life insurance portion of the split-
dollar life insurance policies (Messrs. Ralph J. Roberts, $658,500;
Brodsky, $11,268; Brian L. Roberts, $1,311; Smith, $1,385; and Alchin,
$1,310); (c) Company contributions to its 401(k) Retirement-Investment Plan
in the amount of $5,250 for each of the named executive officers; and (d)
Company payments to its long-term disability plan in the amount of $670 for
each of the named executive officers (other than Mr. Ralph J. Roberts, who
did not participate in such plan). See note (6) below.
(5) Includes amounts paid to offset tax liabilities incurred in connection with
Company payments to the named executive officers to cover their premiums
attributable to the term life insurance portion of the split-dollar life
insurance policies (see note (4)(b) above). Such amounts are calculated
based upon the amount of tax payable by the executive officers in
accordance with the highest individual income tax bracket.
(6) The amounts shown as "Other Annual Compensation" and "All Other
Compensation" applicable to Mr. Ralph J. Roberts in 1995 reflect certain
premiums for split-dollar life insurance policies paid in 1996 which
related to coverage in effect during 1995. If such premiums had been
treated as compensation in the year paid (1996), the amounts for 1995 for
Mr. Ralph J. Roberts would have been: Other Annual Compensation--$499,334,
and All Other Compensation--$3,286,173; and the amounts for 1996 would have
been: Other Annual Compensation--$1,464,025, and All Other Compensation--
$7,179,518.
(7) Represents the number of shares of the Company's Class A Special Common
Stock issuable upon exercise of options. The number of securities
underlying options granted prior to January 12, 1994 have been
retroactively adjusted for the three-for-two stock split in the form of a
50% stock dividend paid on February 2, 1994 to shareholders of record on
January 12, 1994.
(8) Represents the number of shares of the common stock of QVC, Inc., a 57%-
owned 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 18, 1996, pursuant to the 1995 QVC Stock
Option and Stock Appreciation Rights 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 Stock Option and Stock Appreciation Rights Plan)
over the exercise price of such options. Such options have an exercise
price of $177.05 per share, representing the value of the shares underlying
such options on the date of grant as determined pursuant to the 1995 QVC
Stock Option and Stock Appreciation Rights Plan, and such options vest 20%
upon grant and 20% on each January 1, 1997-2000, based on the named
executive's continued service to the Company, except that vesting is
accelerated upon a change of control of QVC, Inc. The QVC, Inc. options
expire April 18, 2006.
7
<PAGE>
The value that might be realized upon exercise of such options immediately
prior to April 18, 2006 (the expiration date of such options), assuming 0%,
5% and 10% annual compounded rates of appreciation on the QVC Common Stock
over the terms of the options is as follows: 0%--Messrs. Brodsky,
$1,381,040; Brian L. Roberts, $2,762,080; Smith, $1,381,040; Alchin,
$1,035,780; 5%--Messrs. Brodsky, $2,694,960; Brian L. Roberts, $5,389,920;
Smith, $2,694,960; Alchin, $2,021,220; 10%--Messrs. Brodsky, $4,710,760;
Brian L. Roberts, $9,421,520; Smith, $4,710,760; Alchin, $3,533,070. At
December 31, 1996, the excess of the fair market value of QVC, Inc. common
stock over the exercise price for such options based upon the most recent
valuation date was as follows: Messrs. Brodsky ($326,512 exercisable,
$1,306,048 unexercisable); Brian L. Roberts ($653,024 exercisable,
$2,612,096 unexercisable); Smith ($326,512 exercisable, $1,306,048
unexercisable); and Alchin ($244,884 exercisable, $979,536 unexercisable).
(9) Includes amounts paid to offset tax liabilities incurred in connection
with the exercise of stock options. The plan pursuant to which these
bonuses were paid was terminated by the Board of Directors as of December
31, 1993. See "Report of the Compensation Committee and the Subcommittee
on Performance-Based Compensation on Executive Compensation--Effect of
Internal Revenue Code Section 162(m)."
STOCK OPTION GRANTS
No Comcast Corporation stock options or stock appreciation rights ("SARs")
were granted during 1996 to the Chief Executive Officer or to any of the
Company's other four most highly compensated executive officers. The
Compensation Committee of the QVC, Inc. Board of Directors granted the named
executive officers (other than the Chief Executive Officer) options to
purchase common stock, together with tandem SARs of QVC, Inc., a 57%-owned
subsidiary of the Company. See "Summary Compensation Table" and note (8)
thereunder above.
8
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth information related to options exercised
during 1996 by the Chief Executive Officer and each of the Company's other
four most highly compensated executive officers during 1996, and the number
and value of options or SARs held at December 31, 1996 by such individuals.
AGGREGATED OPTION EXERCISES IN 1996 AND OPTION VALUES AT DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1996(#) DECEMBER 31, 1996($)
------------------------- ----------------------------
SHARES
ACQUIRED
ON VALUE
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Roberts
Class A Special Common
Stock................. 838 $ 4,784 4,412,566 767,154 $21,094,432 $5,080,158
Class B Common Stock... -- -- 658,125 -- 7,848,259(1) --
Julian A. Brodsky(2)
Class A Special Common
Stock................. 6,750 $ 71,438 861,317 1,095,555 $ 4,834,647 $3,838,912
Class A Common Stock... 65,601 797,708 -- -- -- --
Brian L. Roberts(2)
Class A Special Common
Stock................. 10,084 $ 58,823 205,388 1,011,474 $ 522,042 $2,178,931
Class A Common Stock... 7,697 93,596 -- -- -- --
Lawrence S. Smith(2)
Class A Special Common
Stock................. 19,296 $ 243,716 165,874 620,288 $ 724,585 $1,821,373
John R. Alchin(2)
Class A Special Common
Stock................. -- $ -- 100,335 476,652 $ 507,602 $1,417,494
</TABLE>
- - --------
(1) Each share of Class B Common Stock is convertible into one share of Class
A Common Stock or Class A Special Common Stock, at the option of the
holder, and entitles the holder to fifteen votes per share. Each record
holder of Class A Common Stock is entitled to one vote per share. The
illustrated value of these options is based on the closing price of a
share of Class A Common Stock on December 31, 1996. In addition, in
accordance with the Compensation Agreement (see "Agreements with Executive
Officers--Compensation Agreement with the Chief Executive Officer"
elsewhere in this Proxy Statement), the Chief Executive Officer is
entitled to certain bonuses payable upon exercise of his Class B options
to offset tax liabilities incurred in connection with the exercise of such
options. At December 31, 1996, the Company's potential liability relating
to such bonuses (based upon the market price of the Class A Common Stock
on such date) was approximately $6.1 million and fluctuates based on the
market value of the Company's Class A and Class B Common Stock. As of
April 29, 1997, the potential liability for such bonuses was approximately
$5.1 million. For more detail regarding the bonuses, see "Agreements with
Executive Officers--Compensation Agreement with the Chief Executive
Officer."
(2) See also note (8) under "Summary Compensation Table."
9
<PAGE>
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 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 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 provided 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, 1997 at age 65. The benefits shown below are
subject to reduction for Social Security benefits.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE
COMPENSATION(1) 30 OR MORE(2)
--------------- ----------------
<S> <C>
$300,000 $180,000
400,000 240,000
500,000 300,000
600,000 360,000
700,000 420,000
800,000 480,000
900,000 540,000
</TABLE>
- - --------
(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.
(2) This column represents the maximum benefits payable under the 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 at or after attaining age 65, subject to a vesting
schedule. Any benefits received under this agreement reduce the benefits to
which Mr. Brodsky is entitled under the 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 "Compensation Agreement") was
approved by the Company's shareholders on June 22, 1994.
The 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, 1997, and will continue to devote substantially all of his
working time to the Company, on the terms and conditions summarized below. In
addition, for a five year period following termination of the Compensation
Agreement, he is
10
<PAGE>
required to perform certain functions, as the Company may request from time to
time, to promote the interests and goodwill of the Company.
Base Salary. The Compensation Agreement provides that the Chief Executive
Officer will receive an annual base salary of $800,000 beginning in 1993, as
adjusted (but never reduced) in order to reflect increases in the consumer
price index subsequent to 1993.
Split-Dollar Life Insurance. The Compensation Agreement requires the Company
to provide and maintain insurance protection under the Company's Split-Dollar
Life Insurance Plan for the Chief Executive Officer and his spouse in an
amount which represented a total net after-tax cost to the Company of
approximately $6.6 million at the time of implementation of the Compensation
Agreement. Under the Split-Dollar Life Insurance Plan generally, the Company
pays a portion of the annual premiums for joint-and-survivor life insurance
policies for certain senior executive officers, and upon payment of the
policies at death (or in the case of the Chief Executive Officer, of him and
his spouse), the Company recovers all of the cumulative premiums previously
paid by the Company for the whole-life portion of such policies. The Company
will also continue to pay the Chief Executive Officer an annual cash bonus in
an amount equal to the portion of the annual premium for such life insurance
protection that he is required to pay under the Split-Dollar Life Insurance
Plan (i.e., the portion of the premium representing the cost of term
insurance); in addition, for the insurance required to be maintained under the
Compensation Agreement the Company will increase the bonus by an amount
sufficient to pay any income tax liability incurred in connection with payment
of the bonus (collectively, the "Split-Dollar Bonus").
Tax Grossed-Up Bonus and Stock Appreciation Bonus. Under the Compensation
Agreement, the Company will pay mandatory cash bonuses to the Chief Executive
Officer to offset income tax liability on certain of the income recognized
upon exercise of his current nonqualified stock options for Class B Common
Stock of the Company, to the extent such income is recognized due to
appreciation in the value of such stock prior to September 9, 1993, the date
of the Compensation Agreement (the "Tax Grossed-Up Bonus"), and a separate
stock appreciation bonus essentially duplicating the Tax Grossed-Up Bonus for
appreciation subsequent to the date of the Compensation Agreement, subject to
a maximum of 125% of the appreciation of the Class A Common Stock in excess of
$20.583 per share times the number of options for Class B Common Stock
exercised (the "Stock Appreciation Bonus"). The requirement that the Company
pay a Tax Grossed-Up Bonus or Stock Appreciation Bonus will apply
notwithstanding termination of the Company's discretionary bonus plan
effective December 31, 1993.
Stock Option Grants. The Compensation Agreement provided for the award to
the Chief Executive Officer of nonqualified options to purchase 2,220,000
shares of the Company's Class A Special Common Stock at the closing market
price for such stock on March 15, 1994. This one-time option grant represented
approximately 75% of the unexercised nonqualified options to purchase Class A
Special Common Stock previously awarded to him, and the new options generally
vest and expire at the same times as, and in proportion to, the vesting and
expiration dates of the previously outstanding options. The purpose of the
special option grant in the Compensation Agreement was to replace, in part,
the potential benefits which had been provided by the Company's terminated
discretionary bonus plan.
The Compensation Agreement provides that the Chief Executive Officer will
not receive further option grants through December 31, 1995. The Compensation
Agreement also provides that the Company will consider means of replacing 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 of the Compensation Committee
and the Subcommittee on Performance-Based Compensation on Executive
Compensation."
11
<PAGE>
Termination. The 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 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 Split-Dollar Bonus, the Tax Grossed-Up Bonus, and the
Stock Appreciation Bonus will continue to be payable. In the event of death,
all of his outstanding options will vest fully and remain exercisable for
their remaining terms. 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.
Employment Agreements with Messrs. Smith and Alchin
The Company has entered into employment agreements with two named executive
officers of the Company, Lawrence S. Smith, the Company's Executive Vice
President, and John R. Alchin, the Company's Senior Vice President and
Treasurer. The following is a description of the material terms of such
agreements.
The term of such agreements is from January 1, 1995 through December 31,
2000 (the "Employment Period"). Mr. Smith and Mr. Alchin each agree to work
full time for the Company during the Employment Period.
The agreement with Mr. Smith provided for a base salary of $600,000 in 1995,
and the agreement with Mr. Alchin provided for a base salary of $500,000 in
1995. In each case, for each year in the Employment Period subsequent to 1995
the base salary is increased by the greater of five percent 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, of up to 50% of his base salary
for the applicable year. The amount of the bonus will be determined annually
by the Subcommittee on Performance-Based Compensation of the Board of
Directors of the Company (the "Compensation Subcommittee"), based on the
performance of the Company and of the named 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. The Comcast Corporation 1996
Executive Cash Bonus Plan being submitted to shareholders at the 1997 Annual
Meeting is intended to satisfy Messrs. Smith's and Alchin's bonus rights under
their employment agreements.
Each agreement provides that the named 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 year 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 Comcast Corporation Deferred
Compensation Plan.
Under each of the agreements, the named executive agrees not to compete with
the Company during his employment and for one year after termination of his
employment (which period was extended in June 1996 to two years). The
agreements also require each named 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 named 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 named 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.
12
<PAGE>
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, 1996
with the cumulative total return on the Standard & Poor's 500 Stock Index and
with a selected peer group consisting of the Company and five other companies
engaged in the cable communications industry: Cablevision Systems Corporation
(Class A); Jones Intercable, Inc.; TCA Cable TV, Inc.; Tele-Communications,
Inc. (Class A); and Time Warner, Inc. The comparison assumes $100 was invested
on December 31, 1991 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.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMCAST CLASS A 117 220 140 162 162
- - --------------------------------------------------------------------------------
COMCAST CLASS A SPECIAL 110 220 144 168 166
- - --------------------------------------------------------------------------------
S&P 500 108 118 120 165 203
- - --------------------------------------------------------------------------------
PEER GROUP 127 196 146 167 145
- - --------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE AND THE SUBCOMMITTEE ON PERFORMANCE-BASED
COMPENSATION ON EXECUTIVE COMPENSATION
Compensation Policy. The Compensation Committee (the "Compensation
Committee") is responsible for making recommendations to the Board of
Directors on executive compensation. The Subcommittee on Performance-Based
Compensation (the "Compensation Subcommittee") is responsible for 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 and bonus plans. As used in this Report,
the term "Committee" shall refer to the Compensation Committee and the
Compensation Subcommittee, regardless of whether they acted separately or
together.
The goal of the Committee 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 goals by providing competitive
compensation and permitting executive officers to take an ownership stake in
the Company commensurate with their relative levels of seniority and
responsibilities. The members of the Compensation Committee and the
Compensation Subcommittee are disinterested non-employee directors and the
members of the Compensation Subcommittee are "outside directors" (as defined
in Section 162(m) of the Internal Revenue Code).
Each year the Committee conducts a review of the Company's executive
compensation, except for the compensation of the Chief Executive Officer,
which is determined under the Compensation Agreement. In 1996, this review
included a comprehensive report from an independent compensation consultant
which prepared a competitive analysis/survey of the Company's executive
compensation program in comparison to programs maintained by approximately 85
media companies, including 20 substantial competitors in the cable industry.
These companies represent a broad sampling of the Company's most direct
competitors for executive talent and include the principal companies included
in the peer group index in the Stock Performance Graph included elsewhere in
this Proxy Statement. In light of the nature of their responsibilities,
particularly the fact that the executive officers have overall corporate
policy making, management and administrative responsibilities and are not
directly responsible for the operating units of the Company, a key factor in
the Committee's assessment of such officers is the Company's overall
performance.
The principal forms of executive compensation used by the Company in recent
years are base salary, bonuses, stock options and restricted stock (which the
Committee did not grant in 1996), and, for certain executives, split-dollar
(whole) life 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. The Committee's goal is to provide the named
executive officers with total compensation that, based on individual and
Company performance viewed over an appropriate period of time, is generally
between the 50th and 75th percentile of total compensation for executives with
comparable positions at peer companies, as confirmed by the independent
compensation consultant retained by the Company.
As discussed below, the Committee considers a variety of factors in arriving
at the compensation paid to the Company's executive officers other than the
Chief Executive Officer. No specific weighting was assigned by the Committee
to any of the factors considered in determining the remuneration paid to the
named executive officers for 1996.
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 base salary of the Chief Executive Officer was
increased by approximately 2.5% in 1996 pursuant to the terms of his
Compensation Agreement. The base salaries of Messrs. Smith and Alchin were
increased by 5% each in 1996 pursuant to the terms of their employment
agreements with the Company (in the case of Mr. Smith, $5,000 of such increase
was awarded in the form of a guaranteed bonus). No base salary
14
<PAGE>
increases were awarded to Messrs. Brian L. Roberts or Brodsky in 1996. The
Committee did not review any specific measures of individual or corporate
performance in the determination of base salary of executive officers for
1996.
In 1996, in conjunction with the issuance to certain named executive
officers (other than the Chief Executive Officer) of options to purchase
common stock of QVC, Inc., the Committee undertook a further review of the
total compensation of each such named executive officer, including such
options. Based on the advice of the Company's independent compensation
consultant, the Committee determined not to adjust the compensation of any of
such officers, subject, however, to agreements by Messrs. Brian L. Roberts and
Brodsky to enter into agreements not to compete with the Company for one year
following termination of their employment and, in the case of Messrs. Smith
and Alchin, their agreement to extend the term of their existing employment
agreements and non-competition obligations by an additional year.
Bonuses. In August 1996, the Committee adopted the Comcast Corporation 1996
Executive Cash Bonus Plan (the "Executive Cash Bonus Plan"), subject to
approval by the Company's shareholders at the 1997 Annual Meeting, and
designated each of the named executive officers other than the Chief Executive
Officer and Mr. Brodsky as participants in such plan. See "Proposal Two--
Approval of the Comcast Corporation 1996 Executive Cash Bonus Plan." Under the
Executive Cash Bonus Plan, each executive designated by the Committee is
eligible to earn an annual bonus of up to 50% of his base salary and
guaranteed bonus, based on annual cash flow performance targets established by
the Committee. For 1996, the Committee established targets of cash flow
increases of 6% (which would produce 66 2/3% of the target bonus) and 9%
(which would produce 100% of the target bonus) for the period July 1, 1996
through December 31, 1996, compared to the similar period in 1995. Cash flow
increases between 6% and 9% would produce a bonus prorated between 66 2/3% and
100% of the target bonus. Based on the Company's cash flow for such periods,
100% of the target bonuses were earned for 1996 under the plan.
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 with Messrs. Smith and Alchin. The Committee
selected increases in cash flow as the single most significant measure of
operating performance of the Company and other companies in the Company's
industries.
Notwithstanding that Mr. Brodsky was not designated as a participant in the
Executive Cash Bonus Plan, the Committee determined to award him a bonus of
$300,000 with respect to 1996, contingent (as with the bonuses under the
Executive Cash Bonus Plan) on approval of the Executive Cash Bonus Plan by the
Company's shareholders at the 1997 Annual Meeting. Such bonus was awarded
based on the Committee's assessment of Mr. Brodsky's continued contribution to
the success of the Company and to achievement of the target levels set for
bonuses under the Executive Cash Bonus Plan.
The bonuses awarded to Messrs. Brian L. Roberts and Smith for 1996 included
annual guaranteed performance bonuses of $125,000 and $5,000, respectively, in
addition to the bonuses 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) in 1996 related to termination of the
Company's discretionary bonus plan, as discussed below.
Equity-Based Incentive Compensation. The Company's equity-based incentive
compensation is in the form of stock option grants and restricted stock
awards. The Committee 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 its
shareholders.
15
<PAGE>
The Committee did not issue stock option grants or restricted stock awards
to its named executive officers in 1996. Its decision not to make such grants
and awards was based on the consideration of grants and awards made in
previous years, which the Committee believed afforded adequate equity-based
incentives to the named executive officers. The Committee also took into
account its plan to adopt the Executive Cash Bonus Plan in which certain of
the named executive officers would participate.
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 1996, Mr. Ralph J. Roberts, the Chairman of the Company's
Board of Directors, was its chief executive officer for purposes of this Proxy
Statement.
The Chief Executive Officer's compensation for 1996 was determined under the
terms of the Compensation Agreement. The Compensation Agreement was entered
into effective September 9, 1993, as amended March 16, 1994, and approved by
shareholders at the Annual Meeting of Shareholders on June 22, 1994. See
"Agreements with Executive Officers--Compensation Agreement with the Chief
Executive Officer." The levels of compensation provided under the Compensation
Agreement were determined based on a review by the Committee 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 also took into
account its assessment of the importance of maintaining the continued active
participation of the Chief Executive Officer in the Company's affairs over the
period covered by the Compensation Agreement, the Company's growth and overall
performance during the ten years prior to 1993, and the Chief Executive
Officer's prior compensation levels during that period. The Committee did not
consider specific performance measures in approving the Compensation
Agreement, except to the extent that the Compensation Agreement provided for
stock option grants in 1994 that were inherently related to 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.
Such compensation consisted of the salary and benefits fixed by the
Compensation Agreement (adjusted, in the case of salary, according to the
cost-of-living formula contained in the Compensation Agreement) and, pursuant
to the Company's undertaking in the Compensation Agreement to replace the
potential benefits provided by the Company's terminated discretionary bonus
plan, additional split-dollar life insurance benefits in an amount fixed in
1994 and generally calculated 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 the Chief Executive Officer's previously
awarded nonqualified options prior to March 15, 1994. 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-tax cost of the additional split-dollar
life insurance benefits, and advised the Committee that its actions awarding
such benefits were appropriate and reasonable.
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 $1.0 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.
The Committee 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
16
<PAGE>
compensation are not included in determining whether the $1.0 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.
Certain compensation was awarded during 1996 after consideration of the
termination of a plan (approved by 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 1987-1993, the Board 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, four types of
compensation were awarded to named executive officers in 1996. The Committee
awarded lump-sum bonuses, or, in the case of the Chief Executive Officer,
additional split-dollar life insurance benefits, in an amount generally
calculated (together with similar compensation awarded in 1994 and 1995) 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. Such
additional split-dollar life insurance benefits generally correspond to the
benefits subject to the Compensation Agreement, except that they include for
the Chief Executive Officer an additional bonus to offset federal gift taxes
on the portion of the annual insurance premiums representing the cost of term
insurance, which are imposed because the Chief Executive Officer's life
insurance benefits would be received by a trust for the benefit of his
children. The Committee also extended the additional bonus to apply to the
benefits subject to the Compensation Agreement, which does not otherwise
provide for such bonus. Finally, the Committee extended for three years the
expiration date of the Chief Executive Officer's options to acquire 405,000
shares of Class B Common Stock at an exercise price of $4.84 per share, which
would otherwise have expired in May 1996. The Company's compensation
consultant advised the Committee that its actions terminating the
discretionary bonus plan and awarding the compensation described above were
appropriate and reasonable.
As of the end of 1996, the Committee has completed the process of replacing
the potential benefits provided by the terminated discretionary bonus plan
with other forms of compensation. 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 1994-1996.
The Committee 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 "Proposal Two--Approval of the Comcast Corporation 1996
Executive Cash Bonus Plan."
With respect to the Compensation Agreement, 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
17
<PAGE>
the course of his employment as an executive officer of the Company. The
amount of compensation paid to the Chief Executive Officer in 1996 that is
expected to be nondeductible to the Company is approximately $277,000. In
addition, the Compensation Agreement provides for payment of a mandatory Tax
Grossed-Up Bonus upon exercise of any of the Chief Executive Officer's options
to acquire Class B Common Stock of the Company, which, if paid during the
course of his employment as one of the five most highly paid executive
officers of the Company, would not be deductible under Section 162(m). See
"Agreements with Executive Officers--Compensation Agreement with the Chief
Executive Officer."
The Committee 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 Chief Executive Officer taking into account his
unique and invaluable contributions to the Company over the course of the
Company's history, (2) the benefits to the Company if the Chief Executive
Officer's incentive to retain Class B Common Stock obtained upon exercise of
options is maximized, (3) the relatively minimal effect on the Company of
forgoing deductibility of the specific annual compensation (other than the Tax
Grossed-Up Bonus) in excess of $1.0 million, and (4) the possibility that the
Tax Grossed-Up Bonus would not be required to be paid at a time when payment
would be nondeductible. In addition, the Committee believes that the Company's
former discretionary bonus plan which was terminated effective December 31,
1993 (and pursuant to which bonuses had generally been granted in an amount
sufficient to reimburse persons exercising nonqualified stock options for tax
liabilities incurred in connection with the exercise of such options and
receipt of the bonus), despite technically failing to come within any of the
exceptions to Section 162(m)'s nondeductibility rule, represented an
appropriate potential benefit to him based on appreciation in the Company's
stock subsequent to the dates on which the Chief Executive Officer was awarded
nonqualified options. In entering into the Compensation Agreement, it
determined not to deprive him of the opportunity to receive such compensation
in connection with exercise of his options to purchase Class B Common Stock
solely because of the possibility that all or a portion of such benefit would
not be deductible for federal income tax purposes.
MEMBERS OF THE COMPENSATION COMMITTEE
Gustave G. Amsterdam (Chairman)*
Sheldon M. Bonovitz
Joseph L. Castle*
* Members of the Subcommittee
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 $20,000, plus $1,500 for
each meeting of the Board of Directors attended and $750 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 outside
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 $750 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.
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CERTAIN RELATED PARTY TRANSACTIONS
Mr. Daniel Aaron, a director of the Company and its former Vice Chairman of
the Board of Directors, serves as a consultant to the Company on an as needed
basis. Pursuant to this arrangement, Mr. Aaron earned $86,250 during 1996.
During 1996, Mr. Aaron also earned the following amounts related to his prior
service as a full-time executive officer of the Company: $48,851 under the
Company's Supplemental Executive Retirement Plan, $30,000 under the Company's
Executive Deferred Compensation Plan, and bonuses aggregating $29,021 under a
split-dollar life insurance arrangement pursuant to which, in 1994, Mr. Aaron
had exchanged certain of his rights to receive deferred compensation for life
insurance benefits with an equivalent after-tax cost to the Company on a
present value basis.
Mr. Sheldon M. Bonovitz, a director of the Company, is a partner in the law
firm of Duane, Morris & Heckscher, which provides services to the Company from
time to time.
Ms. Anne Wexler, a director of the Company, is 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. Hill
and Knowlton Public Affairs Worldwide provide services to the Company and
received payments for such services from the Company of approximately $316,000
in 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Ralph J. Roberts, Brodsky, and Brian L. Roberts, none of whom serve
on the Compensation Committee of the Company, are also executive officers and
directors of Storer Communications, Inc., and Comcast UK Cable Partners
Limited, each a subsidiary of the Company, and in such capacities have
participated in decisions regarding the compensation of certain executive
officers of the respective corporations. Messrs. Ralph J. Roberts, Brodsky,
and Brian L. Roberts do not, however, receive any additional compensation for
serving as such executive officers or directors. Mr. Brian L. Roberts is the
son of Mr. Ralph J. Roberts.
Mr. Bonovitz, a member of the Compensation Committee, is a partner in the
law firm of Duane, Morris & Heckscher, which provides services to the Company
from time to time.
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 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, 77, 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. Mr. Roberts is also a director of Storer
Communications, Inc., and Comcast UK Cable Partners Limited.
Julian A. Brodsky, 63, 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 the major portion of
his time to the business and affairs of the Company. He is also a director of
Storer Communications, Inc., RBB Fund, Inc., and Comcast UK Cable Partners
Limited.
Brian L. Roberts, 37, has served as President of the Company and a director
for more than five years. Mr. Roberts serves as Vice President and a director
of Sural. Mr. Roberts devotes the major
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portion of his time to the business and affairs of the Company. He is the son
of Mr. Ralph J. Roberts. Mr. Roberts is also a director of Teleport
Communications Group, Inc., Storer Communications, Inc., and Comcast UK Cable
Partners Limited.
Daniel Aaron, 71, has served as a director of the Company for more than five
years. He served as Vice Chairman of the Board of Directors of the Company for
more than five years until his retirement in February 1991. He continues to
serve as a consultant to the Company.
Gustave G. Amsterdam, 88, 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, 60, 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 for more than five years. Mr.
Bonovitz is a nephew by marriage of Ralph J. Roberts and a cousin by marriage
of Brian L. Roberts. Mr. Bonovitz is also a director of Surgical Laser
Technologies, Inc., and MEDIQ, Incorporated.
Joseph L. Castle, II, 64, 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.,
and Mark Centers Trust.
Bernard C. Watson, 69, has been a director of the Company for more than five
years. Dr. Watson has been Chairman of the Board of Directors of Health
Management Alternatives Foundation since 1993. Prior to assuming his current
position, he was President and Chief Executive Officer of the William Penn
Foundation for more than five years.
Irving A. Wechsler, 76, has been a director of the Company for more than
five years. Mr. Wechsler has been, for more than five years, a partner in the
firm of Wechsler, Wolsh and Associates, Certified Public Accountants, in
Pittsburgh, Pennsylvania.
Anne Wexler, 67, 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 Alumax, Inc., The Continental Corporation, The Dreyfus
Corporation Index Funds, The Dreyfus Corporation Mutual Funds, New England
Electric System, and Nova 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. Ralph J. Roberts (Chairman), Amsterdam and Bonovitz serve as members
of the Executive Committee, which held three meetings during 1996. The
Committee acts for the directors in the intervals between meetings of the
Board.
Messrs. Amsterdam, Bonovitz, Castle, Watson and Wechsler (Chairman) serve as
members of the Audit Committee, which held three meetings during 1996. The
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 (Chairman), Bonovitz and Castle serve as members of the
Compensation Committee, which held four formal meetings during 1996. The
Committee considers and determines
20
<PAGE>
all compensation matters relating to the Company's executive officers (other
than matters which are handled by the Subcommittee as described below).
Messrs. Amsterdam and Castle serve as members of the Subcommittee on
Performance-Based Compensation, which held one additional meeting during 1996.
The Subcommittee's functions include administrating the Company's stock
option, restricted stock and bonus plans and establishing performance-based
criteria and goals for compensation to senior executive officers.
Messrs. Aaron, Castle and Watson and Ms. Wexler (Chairperson) serve as
members of the Nominating Committee, which met one time during 1996. The
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 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 six meetings in 1996. 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, except
for Ms. Wexler, who attended five out of seven meetings.
PROPOSAL TWO
APPROVAL OF THE COMCAST CORPORATION
1996 EXECUTIVE CASH BONUS PLAN
On August 15, 1996, the Subcommittee on Performance-Based Compensation (the
"Compensation Subcommittee") adopted the Comcast Corporation 1996 Executive
Cash Bonus Plan (the "Executive Cash Bonus Plan" or the "Plan"), subject to
approval by the Company's shareholders at the 1997 Annual Meeting.
DESCRIPTION OF THE EXECUTIVE CASH BONUS PLAN
The following is a summary of the material features of the Executive Cash
Bonus Plan.
The Executive Cash Bonus Plan provides for an annual cash bonus to be paid
to eligible employees of the Company selected by the Compensation Subcommittee
("Participants") with respect to years
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from 1996 (beginning July 1, 1996) through 2000 (each a "Plan Year"). The
purpose of the 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 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 $1,000,000 in
any year.
Eligibility. The Executive Cash Bonus Plan provides that the Participants in
the Plan shall be Brian L. Roberts, Lawrence S. Smith, John R. Alchin, Stanley
L. Wang, and such other key executives as may be designated by the
Compensation Subcommittee to participate in the Plan from time to time. The
Compensation Subcommittee has not designated any other employees to
participate in the Plan in 1996 or 1997, although the Compensation
Subcommittee has authorized a bonus for Mr. Julian A. Brodsky with respect to
1996, contingent upon shareholder approval of the Plan. The Compensation
Subcommittee expects that Participants in the Plan will be limited to
employees whose compensation is or may be subject to Section 162(m)
(generally, the Company's executive officers).
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) one-half 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 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 $1,000,000.
The 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 Plan) for such year, a First Tier Goal and a Second Tier Goal (which shall
be higher than the First Tier Goal). Each Participant in the 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 Plan
for that Plan Year.
Each Participant shall be entitled to receive a bonus in accordance with the
Plan only after certification by the Committee that the performance goals have
been satisfied. The bonus payment under the Plan is be paid to each
Participant as soon as practicable following the close of the applicable Plan
Year.
The Compensation Subcommittee has discretion under the 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.
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, 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.
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"Cash Flow" is defined in the 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 Plan, the 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.
For 1996, the "Plan Year" is defined as the period from July 1, 1996 to
December 31, 1996, and the Target Bonus is based on each Participant's base
salary and any guaranteed bonus for calendar year 1996. The First Tier Goal
established by the Compensation Subcommittee for the 1996 Plan Year was a 6%
increase in Cash Flow compared to the equivalent period in 1995. The Second
Tier Goal established by the Compensation Subcommittee for the 1996 Plan Year
was a 9% increase in Cash Flow compared to the equivalent period in 1995.
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 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 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 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).
NEW PLAN BENEFITS
The following bonuses have been earned under the Executive Cash Bonus Plan
by the Chief Executive Officer and each of the Company's other four most
highly compensated executive officers, all executive officers as a group, all
non-executive directors as a group, and all non-executive officer employees as
a group with respect to the 1996 Plan Year, and will be paid provided that the
Company's shareholders approve the Plan. The amounts shown below represent
100% of the Target Bonuses for the 1996 Plan Year for each of the individuals
or groups shown, based on the Company's achievement of the Second Tier Goal
for the 1996 Plan Year.
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COMCAST CORPORATION 1996 EXECUTIVE CASH BONUS PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE ($)
----------------- ----------------
<S> <C>
Ralph J. Roberts........................................ $ --
Chairman of the Board of Directors
Julian A. Brodsky....................................... $ --(1)
Vice Chairman of the Board of Directors
Brian L. Roberts........................................ $ 387,600(2)
President
Lawrence S. Smith....................................... $ 325,600(2)
Executive Vice President
John R. Alchin.......................................... $ 271,300(2)
Senior Vice President--Treasurer
Executive Officers as a Group........................... $1,174,400(1)(2)
Non-Executive Directors as a Group...................... $ --
Non-Executive Officer Employees as a Group.............. $ --
</TABLE>
- - --------
(1) Mr. Brodsky has not been designated a Participant in the Plan, but has
been awarded a separate cash bonus of $300,000 with respect to 1996,
contingent on shareholder approval of the Plan.
(2) Includes interest at 7%, compounded daily, from January 1, 1997 to the
approximate date of payment of the bonus(es) provided that the Plan is
approved at the 1997 Annual Meeting (approximately 3.25% of the amount
shown).
Maximum Target Bonuses for Plan Participants in 1997 are approximately equal
to the amounts shown above for 1996, less the portion of such amounts
constituting interest (approximately $38,200 in the aggregate), except that
the Target Bonuses have increased by 5% (an aggregate of approximately
$56,800) based on the increase in the Participants' salaries and guaranteed
bonuses. It is not expected that payment of any bonuses earned under the Plan
for 1997 would be delayed beyond the date on which Participants are entitled
to earn interest under the Plan. There can be no assurance that the target
performance goals will be met by the Company for any year during the term of
the plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE COMCAST CORPORATION 1996 EXECUTIVE CASH BONUS PLAN.
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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 1998 must be received by January 16, 1998 in order to be
considered for inclusion in the Company's proxy statement and form of proxy
relating to that meeting. Shareholder proposals should be directed to Stanley
L. Wang, Senior 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."
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.
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[FORM OF PROXY -- CLASS A]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF COMCAST CORPORATION
The undersigned, a holder of Class A Common Stock of COMCAST
CORPORATION, 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 18, 1997 at 9:00 a.m., at the offices of the Company,
1500 Market Street, 33rd 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:
1. [_] FOR all ten nominees for director listed below.
[_] WITHHOLD AUTHORITY to vote for all ten nominees for director
listed below.
[_] FOR all ten nominees for director listed below, EXCEPT WITHHOLD
AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S) WHOSE NAME(S) IS (ARE) LINED
THROUGH. Nominees: Ralph J. Roberts, Julian A. Brodsky, Brian L. Roberts, Daniel
Aaron, Gustave G. Amsterdam, Sheldon M. Bonovitz, Joseph L. Castle, II, Bernard
C. Watson, Irving A. Wechsler, and Anne Wexler.
2. To approve the Comcast Corporation 1996 Executive Cash Bonus 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.
Unless otherwise specified, the shares will be voted "FOR" the election
of all ten nominees for director and "FOR" the other proposals set forth above.
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.
(Please sign and date on reverse side)
1
<PAGE>
(Continued from other side)
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING, PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K OF COMCAST CORPORATION.
Date: _______________, 1997
-------------------------
Signature of Shareholder
-------------------------
Signature of Shareholder
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.
PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
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APPENDIX
COMCAST CORPORATION
1996 EXECUTIVE CASH BONUS PLAN
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 of the Board of Directors.
"Company" shall mean Comcast Corporation, a Pennsylvania corporation, and
any successor thereto.
"First Tier Goal" shall mean the performance goal, measured in terms of
level of Cash Flow, as established by the Committee for each Plan Year. The
First Tier Goal is the performance measure which, if achieved, permits payment
to each Participant of 66 2/3% of the Participant's Target Bonus. The Committee
shall in all events establish the First Tier Goal for each Plan Year no later
than 90 days after the first day of the Plan Year or, if sooner, within the
first 25% of the Plan 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 meet the
First Tier Goal will be achieved.
<PAGE>
"Participant" shall mean those persons eligible to participate in the Plan
in accordance with Section 3.
"Plan" shall mean the 1996 Comcast Corporation 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 for 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 of the Committee that is higher
than the level of Cash Flow chosen for the Plan Year as the First Tier Goal.
"Target Bonus" shall mean, with respect to any Participant for any Plan
Year, the sum of (a) 50% of the Participant's base salary and any guaranteed
bonus (other than any bonus awarded on account of the termination as of December
31, 1993, of the Company's discretionary cash bonus plan) as of the first day of
the Plan Year and (b) the amount, if any, of such Participant's Target Bonus for
any prior Plan Year which was not earned due to failure to meet the First Tier
Goal or the Second Tier Goal; provided, however, that in no event shall any
Participant's Target Bonus for any Plan Year exceed $1,000,000.
3. PARTICIPATION
-------------
The Participants in the Plan shall be Brian L. Roberts, Lawrence S. Smith,
John R. Alchin, Stanley Wang, and such other key executives as may be designated
by the Committee to participate in the Plan from time to time.
4. TERM OF PLAN
------------
Subject to approval of the Plan by the Committee and the shareholders of
the Company, the Plan shall be in effect as of July 1, 1996 and shall continue
until all amounts required to be paid with respect to all Plan Years up through
and including the Plan Year ending December 31, 2000 are paid by the Company,
unless 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 performance goals set forth in Section 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
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which the bonus is to be paid. Notwithstanding anything contained herein to the
contrary, no bonus shall be payable under the Plan 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. AMOUNTS OF PERFORMANCE-BASED COMPENSATION BONUS
-----------------------------------------------
BONUS
- - -----
(a) Each Participant in the Plan shall be 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 100% and 66 2/3% according to the
level of Cash Flow in excess of the First Tier Goal divided by the difference
between 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 payable 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.
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<PAGE>
(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 or 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
expenses and liabilities arising out of his own membership on the Committee.
(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 be paid by the Company.
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<PAGE>
(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 the examination at the principal office of the Company
(or at such other location as may be determined by the Committee), a copy of the
Plan and such of its records, or copies thereof, as may pertain to any benefits
of such Participant under the Plan.
8. EFFECTIVE DATE, TERMINATION AND AMENDMENT
-----------------------------------------
(a) Effective Date of Participation in Plan. Subject to
---------------------------------------
shareholder and Committee approval of the Plan, participation in this Plan shall
be effective as of July 1, 1996 and shall continue thereafter until the Plan is
terminated.
(b) Amendment and Termination of the Plan. The 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 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 Plan shall be effective without approval by the Committee 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 Plan may be
modified or amended by the Committee, 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 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 reply 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 understand that any
-------------------
benefits under this Plan are in addition to any and all benefits to which a
participant may
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<PAGE>
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) Separability. If any term or condition of the Plan
------------
shall be invalid 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 Company. The Company reserves the right to dismiss any
employee (including a Participant), or otherwise deal with any employee
(including a Participant) to the same extent as though the 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 be paid to his 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 any such 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 laws of the Commonwealth of
Pennsylvania, except to the extent that such laws are preempted by the Federal
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 the 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.
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