<PAGE>
SCHEDULE 14A
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
[ ] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
[_] 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.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
LOGO COMCAST CORPORATION
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 1999
----------------
The Annual Meeting of Shareholders of Comcast Corporation (the "Company")
will be held on Monday, June 21, 1999 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 nine directors to serve for the ensuing year and until their
respective successors shall have been duly elected and qualified.
2. To consider a proposal to approve an amendment to the Comcast
Corporation 1996 Stock Option Plan.
3. To consider a proposal to approve amendments to the Comcast Corporation
1996 Executive Cash Bonus Plan.
4. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 1999 fiscal year.
5. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The close of business on May 3, 1999 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.
Because holders of the Class A Special Common Stock are not generally
entitled to vote and no resolution is proposed for the meeting for which a
vote of the Class A Special Common Stock is required by law, holders of Class
A Special Common Stock are not entitled to vote at the meeting. The enclosed
proxy statement is being sent to holders of Class A Special Common Stock for
information purposes only.
In the event that the meeting is adjourned for one or more periods
aggregating at least fifteen days due to the absence of a quorum, those
shareholders entitled to vote who attend the adjourned meeting, although
otherwise less than a quorum, shall constitute a quorum for the purpose of
acting upon any matter set forth in this notice.
All shareholders are cordially invited to attend the meeting. The Board of
Directors urges you to date, sign and return promptly the enclosed proxy with
respect to your shares of Class A Common Stock. The proxies are solicited by
the Board of Directors of the Company. The return of the proxy will not affect
your right to vote in person if you do attend the meeting. Copies of the
Company's Annual Report on Form 10-K and Summary Annual Report are enclosed.
STANLEY WANG
Secretary
May 14, 1999
<PAGE>
LOGO COMCAST CORPORATION
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 Monday, June 21, 1999 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 14, 1999.
The Board of Directors does not intend to bring any matters before the
meeting other than the matters specifically referred to in the notice of the
meeting, nor does the Board of Directors know of any matter which anyone else
proposes to present for action at the meeting. However, if any other matters
properly come before the meeting, the persons named in the accompanying proxy
or their duly constituted substitutes acting at the meeting will be deemed
authorized to vote or otherwise act thereon in accordance with their judgment
on such matters.
When your proxy card is returned properly signed, the shares represented
will be voted in accordance with your directions. In the absence of
instructions, the shares represented at the meeting by the enclosed proxy will
be voted "FOR" each of the nominees for the Board of Directors in the election
of directors and "FOR" each of the other proposals submitted to shareholders
in accordance with the foregoing notice of meeting and as set forth in this
Proxy Statement. Any proxy may be revoked at any time prior to its exercise by
notifying the Secretary in writing, by delivering a duly executed proxy
bearing a later date or by attending the meeting and voting in person.
Voting Electronically
Instead of submitting your vote by mail on the enclosed proxy card, the
Company's by-laws permit you to vote electronically via the Internet. Please
note that there are separate Internet voting arrangements depending on whether
shares registered in the Company's stock records are in your name or in the
name of a brokerage firm or bank.
The Internet voting procedures are designed to authenticate shareholders'
identities, to allow shareholders to vote their shares and to confirm that
their instructions have been properly recorded. Shareholders voting via the
Internet should understand that there may be costs associated with electronic
access, such as usage charges from Internet access providers and telephone
companies, that will be borne by the shareholder.
For Shares Registered Directly in the Name of the Shareholder
Shareholders with shares registered directly in their name in the Company's
stock records maintained by its transfer agent, The Bank of New York, may vote
their shares (1) via the Internet at the following address on the World Wide
Web: https://proxy.shareholder.com/comcast, (2) by mailing their signed proxy
card, or (3) by attending the meeting and voting in person. Specific
instructions to
1
<PAGE>
be followed by registered shareholders are set forth on the enclosed proxy
card. Votes submitted via the Internet through The Bank of New York described
herein must be received by 5:00 p.m. eastern standard time on June 20, 1999.
For Shares Registered in the Name of a Brokerage Firm or Bank
A number of brokerage firms and banks are participating in separate programs
that offer Internet voting options. Such programs are different from the
program provided by The Bank of New York for shares registered directly in the
name of the shareholder. If your shares are held in an account at a brokerage
firm or bank participating in any such program, you may vote those shares via
the Internet in accordance with instructions set forth on the voting form
provided to you by the brokerage firm or bank that holds your shares.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Outstanding Shares and Voting Rights
At the close of business on May 3, 1999, the record date, the Company had
outstanding [31,499,438] shares of Class A Common Stock, par value $1.00 per
share, 9,444,375 shares of Class B Common Stock, par value $1.00 per share,
and [699,483,529] shares of Class A Special Common Stock, par value $1.00 per
share. Share amounts have been adjusted retroactively to reflect the stock
split in the form of a dividend of one share of Class A Special Common Stock
for each share of Class A Common Stock, Class A Special Common Stock, and
Class B Common Stock paid on May 5, 1999 to shareholders of record as of the
close of business on April 20, 1999 (the "Stock Split").
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.
The presence, in person or by proxy, of shareholders entitled to cast a
majority of the votes which shareholders are entitled to cast on each matter
to be voted upon at the meeting will constitute a quorum for the meeting. In
the event that the meeting is adjourned for one or more periods aggregating at
least fifteen days due to the absence of a quorum, those shareholders entitled
to vote who attend the adjourned meeting, although otherwise less than a
quorum as described in the preceding sentence, shall constitute a quorum for
the purpose of acting upon any matter set forth in the foregoing notice of the
meeting.
In the election of directors, the nine 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 holders of all of the Class B Common Stock have indicated that they will
vote their 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.
2
<PAGE>
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 as of
February 28, 1999. 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 Beneficially of
Voting Class Name and Address of Beneficial Owner Owned Class
- ------------ ------------------------------------ ------------ -------
<S> <C> <C> <C>
Class A Common
Stock FMR Corp. 3,838,200(1) 12.2%
82 Devonshire Street
Boston, MA 02109
Capital Research and Management Company 1,940,000(2) 6.2%
333 South Hope Street
Los Angeles, CA 90071
Brian L. Roberts 799,099(3) 2.5%
1500 Market Street
Philadelphia, PA 19102-2148
Class B Common
Stock Brian L. Roberts 8,786,250(3) 93.0%
1500 Market Street
Philadelphia, PA 19102-2148
Ralph J. Roberts 658,125(4) 7.0%
1500 Market Street
Philadelphia, PA 19102-2148
</TABLE>
- --------
(1) The information contained in this table with respect to FMR Corp. ("FMR")
is based upon filings dated February 12, 1999, made on Schedule 13G by FMR
and its controlling shareholders, Edward C. Johnson, III, and Abigail P.
Johnson, setting forth information as of December 31, 1998. The Schedule
13G indicates that FMR has sole dispositive power as to all of such shares
and sole voting power as to 17,300 of such shares, that FMR's wholly owned
subsidiary Fidelity Management & Research Company ("Fidelity") is the
beneficial owner of 3,820,900 of such shares by reason of acting as an
investment adviser to various investment companies, that Fidelity
Contrafund, an investment company advised by Fidelity, is the beneficial
owner of 3,262,600 of such shares, and that Fidelity International Limited
and Fidelity Management Trust Company are the beneficial owners of 16,600
and 700 of such shares, respectively.
(2) The information contained in this table with respect to Capital Research
and Management Company ("Capital Research") is based upon filings dated
February 11, 1999, made on Schedule 13G by Capital Research setting forth
information as of December 31, 1998. The Schedule 13G indicates that
Capital Research has sole dispositive power as to all of such shares, and
that The Growth Fund of America, Inc., an investment company advised by
Capital Research, has sole voting power as to 1,680,000 of such shares.
(3) At February 28, 1999, Sural Corporation ("Sural"), a Delaware corporation,
owned 8,786,250 shares of the Company's outstanding Class B Common Stock
and 795,038 shares of the Company's outstanding Class A Common Stock. Mr.
Brian L. Roberts, President of the Company, owns stock representing
substantially all of the voting power of all classes of voting securities
of Sural. Pursuant to Rule 13d-3 under the Exchange Act, Mr. Brian L.
Roberts is deemed to be the beneficial owner of the shares of Class B
Common Stock and Class A Common Stock owned by
3
<PAGE>
Sural, and he is deemed to be the beneficial owner of an additional 4,061
shares of Class A Common Stock (including 1,356 shares owned by his wife, as
to which he disclaims beneficial ownership). Since each share of Class B
Common Stock is entitled to fifteen votes, the shares of Class A Common
Stock and Class B Common Stock owned by Sural and Mr. Brian L. Roberts
constitute approximately 77% of the voting power of the two classes of the
Company's voting Common Stock combined. The Class B Common Stock is
convertible on a share-for-share basis into Class A Common Stock or Class A
Special Common Stock. If Sural and Mr. Brian L. Roberts were to convert the
Class B Common Stock which they are deemed to beneficially own into Class A
Common Stock, Mr. Roberts would beneficially own 9,585,349 shares of Class A
Common Stock (approximately 23% of the Class A Common Stock).
(4) Includes 576,579 shares of Class B Common Stock owned by a limited
partnership the sole general partner of which is controlled by Mr. Ralph J.
Roberts. Mr. Ralph J. Roberts is Chairman of the Board of Directors of the
Company and the father of Mr. Brian L. Roberts.
4
<PAGE>
Security Ownership of Management
The following table sets forth certain information regarding the Class A
Common Stock (one vote per share) and the Class A Special Common Stock
(generally non-voting) beneficially owned by each director of the Company, by
Mr. Ralph J. Roberts (the "Chief Executive Officer," see note (12) below), and
by each of the Company's other four most highly compensated executive officers
during 1998 and by all directors and executive officers of the Company as a
group, as of February 28, 1999. 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.
Share amounts have been adjusted retroactively to reflect the Stock Split.
<TABLE>
<CAPTION>
Amount Percent
Beneficially Owned(1) of Class(1)
---------------------------- ---------------
Class A Class A
Name of Beneficial Owner Class A Special Class A Special
- ------------------------ ---------- ------------- ------- -------
<S> <C> <C> <C> <C>
John R. Alchin(3)........ -- 625,454(4) (2) (2)
Gustave G. Amsterdam..... 25,269 225,705 (2) (2)
Sheldon M. Bonovitz...... 17,566(5) 339,136(6) (2) (2)
Julian A. Brodsky(3)..... 234,146(7) 3,688,180(8) (2) (2)
Joseph L. Castle, II..... 375 37,769 (2) (2)
Brian L. Roberts(3)(9)... 799,099(10) 10,884,443(11) 2.5% 1.6%
Ralph J. Roberts(12)..... 319,070(13) 7,843,939(14) 1.0% 1.1%
Lawrence S. Smith(3)..... -- 406,940 (2) (2)
Bernard C. Watson........ -- 43,200 (2) (2)
Irving A. Wechsler....... 110,607 718,711 (2) (2)
Anne Wexler.............. -- 44,700 (2) (2)
All directors and
executive officers as a
group (12 persons)(3)... 1,547,023 25,265,846(1) 4.9% 3.6%
(5)(7)(10)(13) (4)(6)(8)(11)(14)(15)
</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, 1999 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, 1999: Mr. Alchin, 448,762 shares; Mr. Bonovitz,
43,200 shares; Mr. Brodsky, 1,764,002 shares; Mr. Castle, 32,400 shares;
Mr. Brian L. Roberts, 1,074,412 shares; Mr. Ralph J. Roberts, 5,570,892
shares; Mr. Smith, 292,542 shares; Mr. Watson, 43,200 shares; Mr.
Wechsler, 43,200 shares; Ms. Wexler, 43,200 shares; and all directors and
executive officers as a group, 9,595,548 shares. Does not include the
following shares which were issuable under options exercised prior to
February 28, 1999, but the receipt of which was irrevocably deferred
pursuant to the Company's Deferred Stock Option Plan: Mr. Amsterdam,
39,006 shares; Mr. Bonovitz, 9,276 shares; Mr. Brodsky, 789,326 shares;
Mr. Ralph J. Roberts, 2,921,518 shares; and Mr. Wechsler, 4,078 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,
including shares issuable under options exercisable within 60 days of
February 28, 1999, to purchase such shares: Mr. Alchin, 1,200 shares;
Mr. Brodsky, 1,600 shares; Mr. Brian L. Roberts, 2,600 shares; Mr. Smith,
840 shares; and all directors and executive officers as a group, 6,240
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.
5
<PAGE>
(4) Includes 30 shares of Class A Special Common Stock owned in the Comcast
Corporation Retirement--Investment Plan, as to which shares he disclaims
beneficial ownership.
(5) Includes 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 17,950 shares of Class A Special Common Stock held in trust or as
a custodian for his children, 6,513 shares owned by his wife, 252,528
shares held by him as trustee for a testamentary trust, and 10,476 shares
owned by a charitable foundation of which his wife is a trustee, as to all
of which shares he disclaims beneficial ownership.
(7) Includes 15,000 shares of Class A Common Stock owned by a charitable
foundation of which he and members of his family are directors and
officers, and 88,178 shares owned by Swallow Drive Fund, L.P., a limited
partnership the general partner of which is controlled by Mr. Brodsky and
his wife, as to all of which shares he disclaims beneficial ownership.
(8) Includes 15,000 shares of Class A Special Common Stock owned by a
charitable foundation of which he and members of his family are directors
and officers, and 674,562 shares owned by Swallow Drive Fund, L.P. See
note (7) above.
(9) Pursuant to Rule 13d-3 of the Exchange Act, Mr. Brian L. Roberts is also
deemed to be the beneficial owner of 100% of the outstanding shares of the
Company's Class B Common Stock owned by Sural. See note (3) to the table
under the caption "Principal Shareholders."
(10) Includes 1,356 shares of Class A Common Stock owned by his wife, as to
which shares he disclaims beneficial ownership, and 795,038 shares of
Class A Common Stock owned by Sural. See note (3) to the table under the
caption "Principal Shareholders."
(11) Includes 2,712 shares of Class A Special Common Stock owned by his wife,
42,584 shares owned in the Comcast Corporation Retirement--Investment
Plan, and 10,000 shares owned by a charitable foundation of which he and
his wife are directors and officers, as to all of which shares he
disclaims beneficial ownership. Includes 9,581,288 shares owned by Sural,
but does not include additional shares of Class A Special Common Stock
issuable upon conversion of Class B Common Stock beneficially owned by
Mr. Brian L. Roberts. See note (3) to the table under the caption
"Principal Shareholders." If Sural and Mr. Brian L. Roberts were to
convert the Class B Common Stock which they are deemed to beneficially
own into Class A Special Common Stock, Mr. Roberts would beneficially own
19,670,693 shares of Class A Special Common Stock (approximately 2.8% of
the Class A Special Common Stock).
(12) The Company's by-laws do not provide for the position of "Chief Executive
Officer." For purposes of this Proxy Statement, the Company has
determined that Mr. Ralph J. Roberts should be deemed to be the Company's
chief executive officer.
(13) Does not include shares of Class A Common Stock issuable upon conversion
of Class B Common Stock beneficially owned by Mr. Ralph J. Roberts. If
Mr. Ralph J. Roberts and the limited partnership he controls (see note
(4) to the table under the caption "Principal Shareholders") were to
convert the shares of Class B Common Stock owned by them into Class A
Common Stock, Mr. Ralph J. Roberts would beneficially own a total of
977,195 shares of Class A Common Stock (approximately 3.0% of the Class A
Common Stock).
(14) Includes 262,900 shares of Class A Special Common Stock owned by a
charitable foundation of which he and his wife are trustees, as to which
shares he disclaims beneficial ownership, and 576,579 shares owned by a
limited partnership the general partner of which is controlled by him.
6
<PAGE>
Does not include shares of Class A Special Common Stock issuable upon
conversion of Class B Common Stock beneficially owned by Mr. Ralph J.
Roberts. If Mr. Ralph J. Roberts and the limited partnership he controls
(see note (4) to the table under the caption "Principal Shareholders") were
to convert the shares of Class B Common Stock owned by them into Class A
Special Common Stock, Mr. Ralph J. Roberts would beneficially own a total
of 8,502,064 shares of Class A Special Common Stock (approximately 1.2% of
the Class A Special Common Stock).
(15) Includes 30 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, 1998 through December 31, 1998 were made on a timely basis,
except for one report regarding a sale of stock by Mr. Daniel Aaron, who was a
director of the Company through September 23, 1998, for which a Form 4 was
inadvertently filed late.
7
<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 All Other
Annual Compensation Awards Compensation
-------------------------------- ------------ (Principally
Number of Split-Dollar
Other Annual Securities Insurance
Name and Bonus Compensation Underlying Benefits)
Principal Position(1) Year Salary($) ($)(2) ($)(3) Options(#) ($)(4)
- --------------------- ---- ---------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Roberts........ 1998 $1,000,000 $500,000 $1,998,687(5) 1,134,610(6) $7,369,463
Chairman of the 1997 870,185 -- 1,387,050(5) 117,738(6) 5,625,776
Board of Directors 1996 842,223 -- 1,182,376 -- 5,759,957
Julian A. Brodsky....... 1998 $ 689,063 $344,532 $ 23,409 605,000(6) $ 973,578
Vice Chairman of 1,600(7)
the Board of Directors 1997 656,250 328,125 26,483 105,000(6) 1,067,761
1996 625,000 300,000 14,121 4,000(7) 1,095,051
Brian L. Roberts........ 1998 $ 689,063 $713,250 $ 278,398 3,169,610(6) $ 222,026
President 7,800(7)
1997 656,250 687,000 42,883 160,160(6) 33,859
5,000(7)
1996 625,000 662,000 2,336 8,000(7) 33,249
Lawrence S. Smith....... 1998 $ 689,063 $413,800 $ 3,257 705,000(6) $ 30,361
Executive Vice
President 2,200(7)
1997 656,250 397,000 10,452 105,000(6) 34,899
200(7)
1996 625,000 381,000 1,126 4,000(7) 34,727
John R. Alchin.......... 1998 $ 579,813 $318,407 $ 48,411 587,500(6) $ 33,670
Senior Vice President-- 1,200(7)
Treasurer 1997 552,250 304,625 17,984 87,500(6) 37,845
1996 526,000 291,500 1,276 3,000(7) 35,230
</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 amounts in this column include bonuses earned by the named persons
under the Company's 1996 Executive Cash Bonus Plan, bonuses paid to the
named persons (except Messrs. Ralph J. Roberts and Brodsky) in 1998, 1997,
and 1996 relating to termination of the Company's discretionary bonus plan
(see "Report on Executive Compensation of the Compensation Committee's
Subcommittee on Performance-Based Compensation--Effect of Internal Revenue
Code Section 162(m)"), and guaranteed bonuses of $137,812, $131,250, and
$125,000 paid to Mr. Brian L. Roberts in 1998, 1997, and 1996,
respectively, and $5,512, $5,250, and $5,000 paid to Mr. Smith in 1998,
1997, and 1996, respectively.
(3) This column includes Company payments to the named executive officers to
cover their tax liabilities incurred in connection with: (a) local taxes
on stock option grants or exercises; (b) Company payments to Mr. Ralph J.
Roberts, Mr. Brodsky, and Mr. Brian L. Roberts to cover
8
<PAGE>
the premiums attributable to the term life insurance portion of split-
dollar life insurance policies or separate term life insurance policies
(see note (4)(b) below); (c) Company payments to cover premiums
attributable to the executive long-term disability plan (see note (4)(e)
below); and (d) other incidental taxable fringe benefits provided to the
named executive officers. Such amounts are calculated based upon the amount
of tax payable by the executive officers in accordance with the highest
individual income tax bracket.
(4) The amounts shown in this column principally represent benefits associated
with split-dollar life insurance 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
1998): (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 $6,259,876; Brodsky $948,554; Brian L. Roberts $21,074;
Smith $20,807; and Alchin $19,956), 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 1998 (Messrs. Ralph J. Roberts $2,810,147; Brodsky
$348,614; Brian L. Roberts $11,407; Smith $14,394; and Alchin $14,347);
(b) Company payments to named executive officers to cover their premiums
attributable to the term life insurance portion of the split-dollar life
insurance policies or separate term life insurance policies (Messrs. Ralph
J. Roberts $1,103,987; Brodsky $15,203; Brian L. Roberts $190,562; Smith
$1,610; and Alchin $1,490); (c) Company contributions to its 401(k)
Retirement--Investment Plan in the amount of $5,600 for each of the named
executive officers; (d) Company payments to its long-term disability plan
in the amount of $686 for each of the named executive officers (other than
Mr. Ralph J. Roberts, who did not participate in such plan); and (e)
Company payments to the named executive officers (other than Mr. Ralph J.
Roberts, who did not participate in such plan) to cover their premiums
attributable to the executive long-term disability plan (Messrs. Brodsky
$3,535; Brian L. Roberts $4,104; Smith $1,658; and Alchin $5,938).
(5) Also includes $15,379 and $33,581 paid to him to cover the taxes payable
by him with respect to estate and succession planning services provided to
him by the Company in 1998 and 1997, respectively.
(6) Represents the number of shares of the Company's Class A Special Common
Stock issuable upon exercise of options. Share amounts have been adjusted
retroactively to reflect the Stock Split pursuant to the terms of the 1996
Stock Option Plan.
(7) Represents the number of shares of the common stock of QVC, Inc., a 57%-
owned subsidiary of the Company, issuable upon exercise of: (a) options
granted to the named executive officers by the Compensation Committee of
the QVC, Inc. Board of Directors on April 18, 1996, November 28, 1997, or
April 30, 1998, pursuant to the 1995 QVC Stock Option and Stock
Appreciation Rights Plan (except for options to purchase 800 shares
granted to Mr. Smith on July 7, 1998, and options to purchase 4,600 shares
granted to Mr. Brian L. Roberts on October 26, 1998); and (b) options
identical to those granted April 18, 1996, assigned by the Company to Mr.
Brian L. Roberts on December 18, 1997. Such options were issued with
tandem stock appreciation rights exercisable in lieu of the options for
75% of the excess of the value of the QVC, Inc. common stock (as
determined pursuant to the 1995 QVC Stock Option and Stock Appreciation
Rights Plan) over the exercise price of such options. Such options have an
exercise price of $651.84 (for options granted July 7 and October 26,
1998), $688.14 (for all other options granted in 1998 and for options
granted in 1997), or $177.05 per share (for options granted in 1996),
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% on each of the first
five
9
<PAGE>
anniversaries of the date of grant (except for the options granted in 1996,
which vest 20% on grant and 20% on each January 1, 1997-2000), based on the
named executive's continued service to the Company. In all cases, vesting
is accelerated upon a change of control of QVC, Inc. The QVC, Inc. options
expire ten years after the date of grant. The value that might be realized
upon exercise of the options granted in 1998 immediately prior to their
expiration, assuming appreciation in the value of the underlying QVC, Inc.
common stock from the date of grant of 0%, 5% and 10% is as follows: 0%
appreciation--Messrs. Brodsky, Brian L. Roberts, Smith, and Alchin, $0; 5%
appreciation--Messrs. Brodsky, $692,428; Brian L. Roberts, $3,270,574;
Smith, $933,826; and Alchin, $519,321; 10% appreciation--Messrs. Brodsky,
$1,754,749; Brian L. Roberts, $8,288,277; Smith, $2,366,497; and Alchin,
$1,316,062. During 1998, such executive officers exercised certain of such
options to purchase shares of QVC, Inc. common stock and realized value
upon such exercises as follows: Messrs. Brodsky, 800 shares, $408,872;
Brian L. Roberts, 4,600 shares, $2,351,014; Smith, 800 shares, $408,872;
and Alchin, 600 shares, $306,654. At December 31, 1998, the excess of the
fair market value of QVC, Inc. common stock over the exercise price for
options outstanding based upon the most recent valuation date was as
follows: Messrs. Brodsky ($0 exercisable, $989,424 unexercisable); Brian L.
Roberts ($0 exercisable, $3,522,098 unexercisable); Smith ($2,146
exercisable, $1,059,238 unexercisable); and Alchin ($0 exercisable,
$742,068 unexercisable).
10
<PAGE>
Stock Option Grants
The following table contains information concerning grants of stock options
under the Company's 1996 Stock Option Plan to the Chief Executive Officer and
to each of the Company's other four most highly compensated executive officers
during 1998. No Comcast Corporation stock appreciation rights ("SARs") were
granted during 1998 to the Chief Executive Officer or to any of the Company's
other four most highly compensated executive officers. Share amounts and
exercise prices have been adjusted retroactively pursuant to the terms of the
1996 Stock Option Plan to reflect the Stock Split.
Stock Option Grants in 1998
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Terms(1)
-------------------------------------------- ----------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees Price Expiration
Name Granted(#) in 1998 ($/Sh) Dates(2) 0% 5% 10%
- ---- ---------- ---------- -------- ---------- --- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ralph J. Roberts........ 7,188(3) * $16.4313 01/09/03 $0 $ 18,927 $ 54,814
127,422 * 14.9375 01/09/08 0 1,197,017 3,033,475
576(3) * 18.6313 06/16/03 0 1,720 4,981
999,424 6.1% 16.9375 06/16/08 0 10,645,767 26,978,464
Julian A. Brodsky(4).... 105,000 * $14.9375 01/09/08 $ 0 $ 986,382 $ 2,499,685
500,000 3.1% 16.9375 06/16/08 0 5,325,951 13,497,006
Brian L. Roberts(4)..... 7,188(3) * $16.4313 01/09/03 $ 0 $ 18,927 $ 54,814
162,422 1.0% 14.9375 01/09/08 0 1,525,811 3,866,704
576(3) * 18.6313 06/16/03 0 1,720 4,981
2,999,424 18.4% 16.9375 06/16/08 0 31,949,573 80,966,490
Lawrence S. Smith(4).... 105,000 * $14.9375 01/09/08 $ 0 $ 986,382 $ 2,499,685
600,000 3.7% 16.9375 06/16/08 0 6,391,142 16,196,408
John R. Alchin(4)....... 87,500 * $14.9375 01/09/08 $ 0 $ 821,985 $ 2,083,071
500,000 3.1% 16.9375 06/16/08 0 5,325,951 13,497,006
All Outstanding
Common Shares(5)....... N/A N/A N/A N/A $ 0 $7,777,263,123 $19,706,689,182
</TABLE>
- --------
* Less than one percent of total options granted to employees in 1998.
(1) Illustrates, as to options, value that might be realized upon exercise of
options immediately prior to the expiration of their term, assuming
specified compounded rates of appreciation on the Class A Special Common
Stock over the term of the options, based on the market prices for the
Class A Special Common Stock when the options were granted. The 0%, 5% and
10% assumed rates of appreciation are not necessarily indicative of future
stock performance.
(2) All of the options to purchase Class A Special Common Stock were granted
on either January 9 or June 16, 1998 under the Company's 1996 Stock Option
Plan. Except as described in note (3) below, all options granted in 1998
have exercise prices equal to the fair market value on the date of grant
and generally become exercisable at the rate of 40% of the shares covered
thereby on the second anniversary of the date of grant, and 20% each on
the third, fourth, and fifth anniversary of the date of the grant, or, as
to one-half of the options granted on June 16, 1998 to named executives
other than the Chief Executive Officer (except as described in note (3)
below), at the rate of 20% of the shares covered thereby on the second
anniversary of the date of grant, another 10% on each of the third through
ninth anniversaries of the date of grant, and 10% six months prior to the
tenth anniversary of the date of grant. The options that expire on January
9, 2003 and June 16, 2003, as well as 17,712 of the options granted to
each of Messrs. Brodsky, Smith, and Alchin expiring June 16, 2008, are
incentive stock options. All other options granted are nonqualified stock
options.
11
<PAGE>
(3) In accordance with the tax rules governing incentive stock options, these
options were granted at an exercise price equal to 110% of the fair market
value on the date of grant. The options become exercisable into shares of
the Company's Class A Special Common Stock at the rate of 40% of the
shares covered thereby on the second anniversary of the date of grant,
another 20% on each of the third and fourth anniversaries of the date of
grant, and the remaining 20% six months prior to the fifth anniversary of
the date of grant.
(4) In addition to the options described above, options to purchase shares of
the common stock of QVC, Inc., were granted, as follows: Messrs. Brodsky,
1,600 options on April 30, 1998 at an exercise price of $688.14; Brian L.
Roberts, 3,200 options on April 30, 1998 at an exercise price of $688.14
and 4,600 options on October 26, 1998 at an exercise price of $651.84;
Smith, 1,400 options on April 30, 1998 at an exercise price of $688.14 and
800 options on July 7, 1998 at an exercise price of $651.84; and Alchin,
1,200 options on April 30, 1998 at an exercise price of $688.14. See note
(7) under "Executive Compensation--Summary Compensation Table."
(5) Illustrates the aggregate appreciation in value of all shares of common
stock of the Company outstanding on December 31, 1998, based on the
assumed 0%, 5% and 10% rates of appreciation that produced the realizable
values of options granted to executive officers shown in this table
(measured from the dates of grant of the options to their expiration, on a
weighted average basis).
12
<PAGE>
Stock Option Exercises and Holdings
The following table sets forth information related to options exercised
during 1998 by the Chief Executive Officer and each of the Company's other
four most highly compensated executive officers during 1998, and the number
and value of options or SARs held at December 31, 1998 by such individuals.
Share amounts have been adjusted retroactively pursuant to the terms of the
1996 Stock Option Plan to reflect the Stock Split.
Aggregated Option Exercises in 1998
and Option Values at December 31, 1998
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares December 31, 1998(#) December 31, 1998($)
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................. 1,000,000 $16,955,858 9,158,074 1,252,348 $204,842,273 $16,679,656
Class B Common
Stock(1).............. 658,125(1) 26,522,556(1) -- -- -- --
Julian A. Brodsky(2)
Class A Special Common
Stock................. 60,534 $ 933,443 2,525,860 1,822,030 $ 56,797,902 $33,487,511
Brian L. Roberts(2)
Class A Special Common
Stock................. 228,540 $ 3,168,740 775,198 4,744,710 $ 15,798,082 $72,563,902
Lawrence S. Smith(2)
Class A Special Common
Stock................. 354,066 $ 4,983,160 306,652 1,616,834 $ 6,187,063 $28,431,251
John R. Alchin(2)
Class A Special Common
Stock................. 101,198 $ 1,654,829 328,394 1,331,382 $ 6,917,103 $23,410,274
</TABLE>
- --------
(1) The options to purchase Class B Common Stock exercised by Mr. Ralph J.
Roberts in 1998 were granted on May 12, 1986, and June 23, 1987, at a
weighted average exercise price of $2.85 per share, based on the fair
market value of the Class A Common Stock on the dates of grant, adjusted
for stock splits including the Stock Split. From the date such options
were granted to December 31, 1998, and under his leadership, the
cumulative annual return, including dividends, on the Company's Class A
Common Stock and Class A Special Common Stock was approximately 22% and
24%, respectively. Each share of Class B Common Stock, which is not
publicly traded, 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
realized on these options is based on the closing price of a share of
Class A Common Stock on the exercise date of the options.
(2) See also note (7) under "Executive Compensation--Summary Compensation
Table."
13
<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, 1999 at age 65 (or older). 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>
$ 600,000.................................................. $360,000
700,000.................................................. 420,000
800,000.................................................. 480,000
900,000.................................................. 540,000
1,000,000.................................................. 600,000
1,100,000.................................................. 660,000
1,200,000.................................................. 720,000
</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. In the case of Mr. Ralph
J. Roberts, Final Average Compensation may, under some circumstances, be
increased as described in "Agreements with Executive Officers--
Compensation Agreement with the Chief Executive Officer--Election to
Become a Consultant" below.
(2) This column represents the maximum benefits payable under the Plan.
The Company also has an agreement with Mr. Brodsky pursuant to which he is
entitled to a $30,000 payment each year for 15 years commencing upon his
termination of employment, subject to a vesting schedule. Any benefits
received under this agreement reduce the benefits to which Mr. Brodsky is
entitled under the Plan.
Executive Cash Bonus Plan
The Comcast Corporation 1996 Executive Cash Bonus Plan (the "Executive Cash
Bonus Plan") provides for an annual cash bonus to be paid to eligible
employees of the Company ("Participants") selected by the Subcommittee on
Performance-Based Compensation of the Compensation Committee of the Board of
Directors (the "Compensation Subcommittee") with respect to years from 1996
14
<PAGE>
(beginning July 1, 1996) through 2000 (each a "Plan Year"). The amendments
which are the subject of Proposal Three, described below, would extend the
Executive Cash Bonus Plan through 2003. The purpose of the Executive Cash
Bonus Plan is to provide performance-based cash bonus compensation in
accordance with a formula that is based on the financial success of the
Company as part of an integrated compensation program. The Executive Cash
Bonus Plan is intended to satisfy the requirements in Section 162(m) of the
Internal Revenue Code and regulations thereunder for "performance-based
compensation" to employees subject to that provision, which compensation is
deductible by the Company even if total compensation to an employee receiving
it exceeds $1 million in any year.
Eligibility. The Compensation Subcommittee has designated all of the
Company's named executive officers and five additional employees, one of whom
is an executive officer, as Participants in the Executive Cash Bonus Plan. The
Executive Cash Bonus Plan also provides that Participants may include such
other key executives as may be designated by the Compensation Subcommittee to
participate in the Executive Cash Bonus Plan from time to time. The
Compensation Subcommittee expects that Participants in the Executive Cash
Bonus Plan will be limited to employees whose compensation is or may be
subject to Section 162(m) (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 Executive Cash Bonus Plan in any prior Plan Year was less than the Target
Bonus for such prior Plan Year(s). In no event, however, can a Participant's
Target Bonus for any Plan Year exceed $1 million. The amendments which are the
subject of Proposal Three, described below, would increase the maximum amount
of a Participant's Target Bonus for any Plan Year to (a) 150% of the sum of a
Participant's base salary and any guaranteed bonus for such Plan Year, plus
(b) the amount, if any, by which the Participant's bonus under the Executive
Cash Bonus Plan in any prior Plan Year was less than the Target Bonus for such
prior Plan Year(s), but in no event to exceed $3 million for any Plan Year.
The Executive Cash Bonus Plan requires that at the beginning of each Plan
Year the Compensation Subcommittee establish two goals for the Company's Cash
Flow (as defined in the Executive Cash Bonus Plan) for such Plan Year, a First
Tier Goal and a Second Tier Goal (which shall be higher than the First Tier
Goal). Each Participant in the Executive Cash Bonus Plan is entitled to a
bonus with respect to a Plan Year which is equal to 66 2/3% of the
Participant's Target Bonus if the Company's Cash Flow for the Plan Year is at
least equal to the First Tier Goal, and 100% of the Target Bonus if the
Company's Cash Flow for the Plan Year is at least equal to the Second Tier
Goal. If the level of Cash Flow for the Plan Year is higher than the First
Tier Goal and lower than the Second Tier Goal, the bonus with respect to such
Plan Year shall be such percentage of the Participant's Target Bonus in excess
of 66 2/3% as is determined by prorating the difference between 66 2/3% and
100%. If the level of Cash Flow for a Plan Year is below the First Tier Goal
established with respect to such Plan Year, no bonus is payable under the
Executive Cash Bonus Plan for that Plan Year.
Each Participant shall be entitled to receive a bonus in accordance with the
Executive Cash Bonus Plan only after certification by the Compensation
Subcommittee that the performance goals have been satisfied. The bonus payment
under the Executive Cash Bonus Plan is to be paid to each Participant as soon
as practicable following the close of the applicable Plan Year.
The Compensation Subcommittee has discretion under the Executive Cash Bonus
Plan to reduce or eliminate the bonus otherwise payable to a Participant if it
determines that such a reduction or elimination of the bonus is in the best
interests of the Company.
15
<PAGE>
In the event any payment of a bonus otherwise payable under the Executive
Cash Bonus Plan occurs more than two months after the close of the Plan Year,
the amount of the bonus otherwise payable shall be increased by the amount
such bonus payment would earn if it were invested in an investment bearing a
7% annual rate of return, compounded daily, or such other reasonable rate of
interest as may be determined by the Compensation Subcommittee, during the
period from the close of the Plan Year with respect to which such bonus is
paid and the date the bonus is actually paid.
"Cash Flow" is defined in the Executive Cash Bonus Plan as the operating
income before depreciation and amortization for the Company and those of its
subsidiaries which are included with the Company in its consolidated financial
statements as prepared by the Company in accordance with generally accepted
accounting principles. In the event of a significant acquisition or
disposition of any assets, business division, company or other business
operations of the Company during a Plan Year that is reasonably expected to
have an effect on Cash Flow as otherwise determined under the terms of the
Executive Cash Bonus Plan, the Executive Cash Bonus Plan provides that the
First Tier Goal and the Second Tier Goal shall be adjusted to take into
account the impact of such acquisition or disposition so as to preserve the
relationship between the Cash Flow goals for the Plan Year and the Company's
performance in the prior comparable period, on a pro forma basis giving effect
to the acquisition or disposition, as further adjusted to reflect any aspects
of the transaction that should be taken into account to ensure comparability
between amounts in the prior Plan Year and the current Plan Year.
Administration. The Executive Cash Bonus Plan is administered by the
Compensation Subcommittee.
Amendment and Termination of the Plan. The Executive Cash Bonus Plan may be
terminated or revoked by the Company at any time and amended by the Company
from time to time, provided that neither the termination, revocation or
amendment of the Executive Cash Bonus Plan may, without the written approval
of the Participant, reduce the amount of a bonus payment that is due, but has
not yet been paid, and provided further that no changes that would increase
the amount of bonuses determined under provisions of the Executive Cash Bonus
Plan shall be effective without approval by the Compensation Subcommittee and
without disclosure to and approval by the shareholders of the Company in a
separate vote prior to payment of such bonuses. In addition, the Executive
Cash Bonus Plan may be modified or amended by the Compensation Subcommittee,
as it deems appropriate, in order to comply with any rules, regulations or
other guidance promulgated by the Internal Revenue Service with respect to
applicable provisions of the Internal Revenue Code as they relate to the
exemption for "performance-based compensation" under Section 162(m).
Agreements with Executive Officers
Compensation Agreement with the Chief Executive Officer
A Compensation and Deferred Compensation Agreement and Stock Appreciation
Bonus Plan with the Chief Executive Officer (the "1993 Compensation
Agreement") was approved by the Company's shareholders on June 22, 1994.
Certain terms of the 1993 Compensation Agreement expired on December 31, 1997,
and on December 16, 1997 the Company and the Chief Executive Officer entered
into a new Compensation and Deferred Compensation Agreement, as amended and
restated effective August 31, 1998 (the "1998 Compensation Agreement"), which
generally extends the terms of the 1993 Compensation Agreement with certain
modifications.
The 1998 Compensation Agreement provides that the Chief Executive Officer
will continue to serve as Chairman of the Board of Directors of the Company
until December 31, 2002, or until such time as he may elect to change his
status to that of a non-executive consultant, and that until he makes such
election he will continue to devote substantially all of his working time to
the Company, on the
16
<PAGE>
terms and conditions summarized below. If he elects to become a non-executive
consultant, he shall devote such time as is necessary to perform the functions
reasonably requested by the Company. In addition, for a period of five years
following any termination of the service period of the 1998 Compensation
Agreement, the Chief Executive Officer will perform such reasonable ceremonial
functions as the Company may request, and will promote the interests and
goodwill of the Company in such manner as the Company may reasonably request.
Base Salary. The 1998 Compensation Agreement provides that the Chief
Executive Officer will receive an annual base salary of $1 million beginning
in 1998, as adjusted (but never reduced, except pursuant to an overall plan to
reduce the compensation of all senior executive officers of the Company) in
order to reflect the greater of increases in the consumer price index
subsequent to 1997 and the average percentage increase in the base
compensation of the five employees of the Company (other than the Chief
Executive Officer) with the highest base compensation.
Bonus. The 1998 Compensation Agreement provides that so long as he continues
to serve as an executive of the Company the Chief Executive Officer will be
eligible to receive annual bonuses of up to 50% of his base salary in
accordance with the Company's Executive Cash Bonus Plan, based on performance
targets established by the Compensation Subcommittee.
Split-Dollar Life Insurance. The 1998 Compensation Agreement requires the
Company to continue to provide and to maintain the split-dollar insurance
protection provided to the Chief Executive Officer under the 1993 Compensation
Agreement, and in addition to provide additional survivorship split-dollar
life insurance to the Chief Executive Officer and his spouse. Such split-
dollar insurance protection includes certain split-dollar insurance provided
pursuant to the 1993 Compensation Agreement to replace the potential benefits
represented by the Company's terminated discretionary bonus plan with respect
to the appreciation through March 15, 1994, in the options for Class A Special
Common Stock previously awarded to the Chief Executive Officer, taking into
account the financial position of the Company and the tax deductibility of any
such payments. See "Report of the Compensation Committee and the Subcommittee
on Performance-Based Compensation on Executive Compensation." Under the split-
dollar life insurance arrangements, the Company pays a portion of the annual
premiums for certain single-life and joint-and-survivor life insurance
policies for the Chief Executive Officer, and upon payment of the policies at
the death of the Chief Executive Officer or of the survivor of the Chief
Executive Officer and his spouse, as applicable, the Company recovers all of
the cumulative premiums previously paid by the Company for the whole-life
portion of such policies. The Chief Executive Officer is responsible for
payment of the portion of such annual premiums representing the cost of term
insurance for each year. The Company 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 that he is required to pay; in
addition, the Company will increase the bonus by an amount sufficient to pay
any income tax or gift tax liability incurred in connection with payment of
the bonus (collectively, the "Split-Dollar Bonus").
Supplemental Death Benefit. Upon the death of the Chief Executive Officer,
the 1998 Compensation Agreement requires the Company to pay a supplemental
death benefit of $30 million (the "Death Benefit") to the personal representa-
tives of the Chief Executive Officer. The 1998 Compensation Agreement substi-
tuted the Death Benefit for two bonus arrangements included in the 1993 Com-
pensation Agreement that were based on appreciation of the Company's Class A
Common Stock from the date of grant of options to purchase Class B Common
Stock to the date of exercise. The Compensation Subcommittee determined that
the after-tax present value cost to the Company of the Death Benefit was ap-
proximately equal to the cost of the bonuses that would otherwise have been
paid. The Company must pay the Death Benefit within six months from the date
of the Chief Executive Officer's death.
Termination. The 1998 Compensation Agreement will terminate upon the Chief
Executive Officer's death, at the Company's option upon his disability, or for
cause (as such terms are defined in
17
<PAGE>
the 1998 Compensation Agreement) upon a vote of not less than two-thirds of
the entire membership of the Company's Board of Directors. If his employment
is terminated by reason of his death or disability, the Company shall continue
to pay his annual base salary on a monthly basis to him or his spouse, during
their lifetimes, for a maximum of five years, and the Accrued Cash Bonus, the
Benefit Plans (as such terms are defined in the 1998 Compensation Agreement)
and the Death Benefit will continue to be payable. In the event of death, all
of his outstanding stock options will vest fully and remain exercisable for
their remaining terms. If his employment is terminated by the Company in
violation of the 1998 Compensation Agreement, he shall remain entitled to
substantially all of the benefits under the 1998 Compensation Agreement.
Noncompetition and Confidentiality. Under the 1998 Compensation Agreement,
the Chief Executive Officer agrees not to compete with the Company during his
employment and for five years after termination of his employment. The
agreement also requires him to maintain the confidentiality of certain
information of the Company, and not to use such information except for the
benefit of the Company, at all times during his employment and after
termination of his employment. Breach of any of such obligations constitutes
cause for termination of the 1998 Compensation Agreement and terminates the
Company's obligations for payments subsequent to any discharge of the Chief
Executive Officer.
Change of Control Provisions. Prior to any "Change of Control" (as defined
below), the Company must establish and fund a grantor trust, the amounts in
which will be subject to claims of the Company's creditors in the case of the
Company's bankruptcy, for the purpose of paying all deferred compensation,
nonqualified retirement benefits, and split-dollar life insurance premiums and
bonuses for the Chief Executive Officer then applicable. Upon the occurrence
of a Change of Control, such trust must become irrevocable (if not already
irrevocable), and the Company must continue to make payments into such trust
to maintain sufficient amounts therein to fund all benefits subject to the
trust. A "Change of Control" is defined as occurring when persons other than
the Chief Executive Officer and members of his family or trusts for their
benefit acquire voting power over more than 50% of the voting stock of the
Company.
Election to Become a Consultant. The Chief Executive Officer may at any
time, upon 30 days notice to the Company, elect to change his position from
that of an executive to that of consultant to the Company. In such event, he
shall continue to receive all of the compensation provided under the 1998 Com-
pensation Agreement, other than the bonus under the Executive Cash Bonus Plan.
If he elects to become a consultant, the Chief Executive Officer's entitlement
to retirement benefits under the Company's Supplemental Executive Retirement
Plan will be adjusted annually to reflect 150% of his base salary as a consul-
tant, but his benefits under such plan will not in any event exceed the bonus
he could have received under the 1998 Compensation Agreement had he continued
to work as an executive.
Employment Agreements with Messrs. Smith and Alchin
The Company has entered into employment agreements with two other named
executive officers of the Company: Lawrence S. Smith, the Company's Executive
Vice President, and John R. Alchin, the Company's 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
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Employment Period subsequent to 1995 the base salary is increased by the
greater of 5% or the percentage increase during the previous year in the
consumer price index.
Pursuant to the agreements, each of the executives is eligible to receive an
annual performance bonus, commencing in 1996, of up to 50% of his base salary
for the applicable year. The amount of the bonus is determined annually by the
Compensation Subcommittee, based on the performance of the Company and of the
executive during such year, and is payable in cash or in shares of Class A
Special Common Stock of the Company, at the discretion of the Compensation
Subcommittee.
Each agreement provides that the executive's employment may be terminated
without cause by the Company and that he may resign voluntarily. If the
executive's employment is terminated without cause, he is entitled to receive
his then-current base salary and all insurance, medical or other similar
benefits for a period of one 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 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 executive to maintain the confidentiality of
certain information of the Company, and not to use such information except for
the benefit of the Company, at all times during his employment and after
termination of his employment. Breach by the executive of any of such
obligations constitutes cause for termination of the applicable agreement, and
terminates the Company's obligations for payments subsequent to any discharge
of the executive.
Each of the agreements provides that it shall continue in effect upon the
merger of the Company into another entity, or in similar events.
Term Life Insurance Agreement with Mr. Brian L. Roberts
The Company has entered into a Term Life Insurance Premium and Tax Bonus
Agreement dated as of September 23, 1998 (the "Term Life Insurance Agreement")
with Mr. Brian L. Roberts, the Company's President. The Term Life Insurance
Agreement provides that, as additional compensation to Mr. Brian L. Roberts,
the Company will reimburse him for all of the premiums on certain specified
20- and 15-year level-premium term life insurance policies aggregating $170
million in insurance on his life, and that the Company will pay him an
additional bonus equal to the income tax payable on such reimbursement and the
bonus. The annual amount of the premiums to be reimbursed under the Term Life
Insurance Agreement is approximately $189,000 through 2012 and $177,000 from
2013-2017.
The Term Life Insurance Agreement provides that prior to any "Change of
Control" (as defined below), the Company must establish a grantor trust, the
amounts in which will be subject to claims of the Company's creditors in the
case of the Company's bankruptcy, for the purpose of paying all premium
reimbursements and tax bonuses for the remaining life of the policies subject
to the Term Life Insurance Agreement. Upon the occurrence of a Change of
Control, such trust must become irrevocable (if not already irrevocable), and
the Company must make payments into such trust in an amount equal to the full
amount required to be paid during the remaining term of the insurance
policies. A "Change of Control" is defined as occurring when persons other
than the Chief Executive Officer and members of his family or trusts for their
benefit acquire voting power over more than 50% of the voting stock of the
Company. The Term Life Insurance Agreement does not terminate upon termination
of the employment of Mr. Brian L. Roberts by the Company.
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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, 1998
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, 1993 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.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Comcast Class A................................. 64 73 74 134 242
Comcast Class A Special......................... 66 77 75 134 250
Peer Group Index................................ 75 86 74 133 262
S&P 500 Stock Index............................. 101 139 171 229 294
</TABLE>
20
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Report on Executive Compensation of the Compensation Committee's
Subcommittee on Performance-Based Compensation
Compensation Policy. The Compensation Committee (the "Committee") is
responsible for making recommendations to the Board of Directors on executive
compensation. In 1998, the Committee deferred to its Subcommittee on
Performance-Based Compensation (the "Compensation Subcommittee") on virtually
all compensation decisions for the Company's executive officers in light of
the Compensation Subcommittee's designated responsibility 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, and for approval of
agreements with the Chief Executive Officer and Mr. Brian L. Roberts.
The goal of the Committee and the Compensation Subcommittee is to attract
and retain highly qualified executive officers and key employees in an effort
to enhance shareholder value. The Company attempts to realize these 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 Subcommittee
are disinterested non-employee directors as well as "outside directors" (as
defined in Section 162(m) of the Internal Revenue Code).
Each year a general review of the Company's executive compensation is
conducted, except for the compensation of the Chief Executive Officer, which
was determined under the 1993 Compensation Agreement and separately reviewed
in connection with the execution of the 1998 Compensation Agreement. A key
factor in the assessment of the Company's executive officers is the Company's
overall performance, in light of their principal responsibility for overall
corporate policy-making, management and administration. For 1998, the
Committee's review also 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 73 media companies, including 12 substantial competitors in the cable
industry employment market. 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.
The principal forms of executive compensation used by the Company in recent
years are base salary, bonuses, and stock options, and, for certain
executives, split-dollar (whole) life insurance policies and term insurance
policies. The Company seeks to achieve a mix of these various forms of
compensation which will properly compensate and motivate its executives on an
individual basis commensurate with their relative levels of seniority and
responsibility. The goal is to provide the 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 an independent compensation consultant.
As discussed below, a variety of factors are considered in arriving at the
compensation paid to the Company's executive officers other than the Chief
Executive Officer. No specific weighting was assigned to any of the factors
considered in determining the remuneration paid to the named executive
officers for 1998.
Base Salary. The Company's philosophy with respect to setting base salary is
to compensate its executive officers with reasonable current income on a
competitive basis. The Compensation Subcommittee increased the base salary of
the Chief Executive Officer by approximately 15% in 1998
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in connection with entering into the 1998 Compensation Agreement. The base
salaries of Messrs. Brian L. Roberts, Brodsky, Smith, and Alchin were
increased by 5% each in 1998. The base salaries of Messrs. Smith and Alchin
were increased pursuant to the terms of their employment agreements with the
Company. No specific objective measures of individual or corporate performance
were reviewed in determining the base salary of executive officers for 1998.
Bonuses. In August 1996, the Compensation Subcommittee adopted the Executive
Cash Bonus Plan, which was approved by the Company's shareholders on June 18,
1997. Under the Executive Cash Bonus Plan, prior to the amendment which is the
subject of Proposal Three below, each executive designated by the Compensation
Subcommittee 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 Compensation Subcommittee. Based on the Company's cash flow
for such period, 100% of the target bonuses were earned for 1998 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
Compensation Subcommittee 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.
The bonuses awarded to Messrs. Brian L. Roberts and Smith for 1998 included
annual guaranteed bonuses of $137,812 and $5,512, 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 1998 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. The Compensation
Subcommittee believes that reliance upon such incentives is advantageous to
the Company because it fosters a long-term commitment by the recipients to the
Company and motivates these executives to seek to improve the long-term market
performance of the Company's stock. Stock options produce value to executives
only if the price of the Company's stock appreciates, thereby directly linking
the interests of the executives with those of its shareholders.
In 1998, the Compensation Subcommittee awarded stock options to each of the
named executive officers. Such option grants were generally based on a
proportional relationship to the recipients' expected cash compensation,
taking into account prior option grants, and were consistent with options
granted at the same time to other members of senior management of the Company.
The Compensation Subcommittee also awarded Mr. Brian L. Roberts a grant of
options to purchase 3 million shares (adjusted to reflect the Stock Split, and
conditional, as to 1,169,610 shares, on approval of the amendment to the
Company's 1996 Stock Option Plan which is the subject of Proposal Two below)
based on the recommendation of its independent compensation consultant and its
review of Mr. Brian L. Roberts' achievements on behalf of the Company over the
previous five years.
Equity Ownership Policy. In 1998, the Company's Board of Directors adopted a
minimum equity ownership policy applicable to substantially all executives of
the Company with base salaries in excess of $150,000, as well as to directors.
Executives and directors subject to such policy may not sell shares of common
stock of the Company unless, following such sale, they continue to own at
least an amount of such common stock with a value equal to a multiple of their
annual base compensation from the Company. The Chief Executive Officer, Mr.
Brian L. Roberts, the Company's President, and all non-employee directors are
required to own stock with a value of five times base compensation; other
22
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executives are required to own stock with a value of one-and-a-half to four
times their base compensation, depending on base compensation. Each of the
other executive officers named in this Proxy Statement is required under the
policy to own Company stock with a value of at least 3.5 times his base
compensation. For purposes of the policy, stock owned by an applicable
person's spouse and children, and 60% of the value of an applicable person's
vested in-the-money stock options and deferred stock account is considered
owned by the applicable person. The Compensation Subcommittee believes that
such policy serves to align more fully the interests of management under the
Company's equity-based incentive compensation programs with the interests of
the Company's shareholders.
Compensation of Chief Executive Officer. The Company's by-laws do not
provide for a "Chief Executive Officer" of the Company. The Company has
determined that, for 1998, 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 1998 was determined under the
terms of the 1993 Compensation Agreement and the 1998 Compensation Agreement.
The 1993 Compensation Agreement was entered into effective September 9, 1993,
as amended March 16, 1994, and approved by the Company's shareholders on June
22, 1994. See "Agreements with Executive Officers--Compensation Agreement with
the Chief Executive Officer." The levels of compensation provided under the
1993 Compensation Agreement and the 1998 Compensation Agreement were
determined based on a review by the Committee and Compensation Subcommittee
and the Company's independent compensation consultant of compensation levels
of chief executive officers at other companies in comparable industries and of
certain chief executive officers in other industries who, like Mr. Ralph J.
Roberts, were founders of companies and the persons primarily responsible for
the growth of such companies over a substantial period of time. The Committee
and Compensation Subcommittee also took into account its assessment of the
importance of maintaining the continued active participation of the Chief
Executive Officer in 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 period from 1993 to 1998, and the Chief
Executive Officer's prior compensation levels during those periods. The
Committee and Compensation Subcommittee did not consider specific performance
measures in approving the 1993 Compensation Agreement and the 1998
Compensation Agreement, except to the extent that the 1993 Compensation
Agreement provided for stock option grants in 1994 that were inherently
related to 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 1998
Compensation Agreement, and, pursuant to the Company's undertaking in the 1993
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. In connection with the 1998 Compensation Agreement, the
Compensation Subcommittee substituted the $30 million Death Benefit for two
bonus arrangements included in the 1993 Compensation Agreement that were based
on appreciation of the Company's Class A Common Stock from the date of grant
to the date of exercise of the Chief Executive Officer's options to purchase
Class B Common Stock. The Compensation Subcommittee determined that the after-
tax present value
23
<PAGE>
cost to the Company of the Death Benefit was approximately equal to the cost
of the bonuses that would otherwise have been paid. In connection with the
1998 Compensation Agreement, the Compensation Subcommittee also provided
additional split-dollar life insurance benefits to the Chief Executive
Officer. The Compensation Subcommittee was advised by the Company's
independent compensation consultant that all compensation provided under the
1998 Compensation Agreement was appropriate.
In 1998, as in 1997, the Compensation Subcommittee also authorized the
Company to provide certain estate planning services to the Chief Executive
Officer in connection with the transfer of control of the Company to Mr. Brian
L. Roberts in October 1997 and related transactions involving them and other
members of the Chief Executive Officer's family, which were deemed to provide
significant benefits to the Company, as well as to reimburse the Chief
Executive Officer for income taxes payable on the value of such services. The
relevant transactions have been completed.
Effect of Internal Revenue Code Section 162(m). Effective January 1, 1994,
Section 162(m) of the Internal Revenue Code provides that certain compensation
in excess of $1 million paid to the chief executive officer and the four most
highly compensated executive officers of a public company (determined as of
the last day of the company's tax year) will not be deductible for federal
income tax purposes.
The Compensation Subcommittee engages in an ongoing review of the Company's
compensation practices for purposes of obtaining the maximum continued
deductibility of compensation paid by the Company consistent with its existing
commitments and ongoing competitive needs. Certain forms of compensation are
not included in determining whether the $1 million limit under Section 162(m)
has been exceeded, such as certain "performance based" compensation adopted by
a committee of at least two outside directors and approved by shareholders,
compensation paid under binding written contracts (including nonqualified
stock options) in effect prior to the proposal of the new provision, and
compensation paid pursuant to certain plans approved by shareholders prior to
enactment of the new provision. These forms of compensation continue to be
deductible without regard to Section 162(m). In general, compensation pursuant
to nonqualified options granted to date under the Company's 1987 Stock Option
Plan and 1996 Stock Option Plan will continue to be deductible for federal
income tax purposes when the options are exercised.
Certain compensation was awarded during 1998 after consideration of the
termination of a plan (approved by the Company's shareholders on September 17,
1986) under which the Board of Directors had discretion to award cash bonuses
to employees or directors exercising nonqualified options to reimburse such
persons for the income taxes payable by them upon exercise of the options and
receipt of the bonus. The Committee determined that the discretionary bonus
plan did not come within any of the exceptions to Section 162(m), and that if
bonuses were to be awarded under such plan in 1994 or thereafter, they might
not be deductible. In addition, in light of the appreciation in the Company's
Common Stock over the period 1987-1993, the Board of Directors determined that
continuation of the bonus plan could impose significant cash burdens on the
Company in future years. Accordingly, the Board of Directors terminated the
discretionary bonus plan as of December 31, 1993.
As part of the Committee's ongoing effort to replace the potential benefits
provided by the Company's terminated discretionary bonus plan, the Committee
awarded lump-sum bonuses, or, in the case of the Chief Executive Officer,
split-dollar life insurance benefits, in an amount generally calculated
(together with similar compensation awarded in 1994 through 1996) to produce
the same after-tax cost to the Company as the potential benefits under the
terminated discretionary bonus plan with respect to appreciation in previously
awarded nonqualified options prior to March 15, 1994. The Company's
compensation consultant advised the Committee that its actions terminating the
discretionary bonus plan and awarding the compensation described above were
appropriate and reasonable. The Committee expects to continue to maintain the
split-dollar life insurance
24
<PAGE>
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 1994-1998.
The Compensation Subcommittee adopted the Executive Cash Bonus Plan to
conform to the requirements of Section 162(m) for deductibility of the bonus
payments awarded under such plan. See "Executive Cash Bonus Plan."
With respect to the 1993 and 1998 Compensation Agreements, a portion of the
compensation paid to the Chief Executive Officer will not or may not be
deductible under Section 162(m) to the extent it is paid during the course of
his employment as an executive officer of the Company. The amount of
compensation paid to the Chief Executive Officer in 1998 that is expected to
be nondeductible to the Company is approximately $659,000. In addition,
approximately $605,000 of the compensation paid to Mr. Brian L. Roberts, the
Company's President, is also expected to be nondeductible under Section
162(m), due in part to the vesting of certain restricted stock awarded to him
in 1994, the fair market value of which was considered non-performance-based
compensation for tax purposes in 1998.
The Compensation Subcommittee determined that the Company should provide the
above-described compensation regardless of its nondeductibility or potential
nondeductibility, based on, among other things, (1) its determination of a
fair and competitive compensation level for the officers involved taking into
account their contributions to the Company, which, in the case of the Chief
Executive Officer, extend over the course of the Company's history and (2) the
relatively minimal effect on the Company of forgoing deductibility of the
specific annual compensation in excess of $1 million.
Members of the Compensation Subcommittee
Gustave G. Amsterdam
Joseph L. Castle
Members of the Compensation Committee
Gustave G. Amsterdam (Chairman)
Sheldon M. Bonovitz
Joseph L. Castle
Compensation of Directors
Each member of the Board of Directors who is not an employee of the Company
(a "non-employee director") receives an annual fee of $35,000 ($20,000 prior
to 1999), plus $2,000 for each meeting of the Board of Directors attended
($1,500 prior to 1999) and $1,000 for each meeting of any committee of the
Board of Directors attended which is not held in conjunction with a meeting of
the Board of Directors ($750 prior to 1999). In addition, any non-employee
director who serves as the chairperson of a committee of the Board of
Directors receives an annual fee of $1,000. Each director is also reimbursed
for incidental travel expenses for meetings attended. Mr. Amsterdam also
receives $1,000 ($750 prior to 1999) as compensation for each meeting attended
as the designee of the Board of Directors on a committee of the Company's
management.
The Company's 1996 Stock Option Plan provides that each non-employee
director will be granted annually, on each February 1, an option to purchase
5,400 shares of Class A Special Common Stock (except that the first such grant
to a new non-employee director will be an option to purchase 9,000 shares) at
an exercise price per share equal to the fair market value of a share of Class
A Special Common Stock on the date of grant. Each such option becomes
exercisable six months after the date of grant and generally expires five
years from the date of grant. Effective January 1, 1999, non-employee
directors of the Company must continuously own shares of the Company's common
stock with a value at least
25
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equal to five times their base annual compensation from the Company, including
60% of the value of vested, in-the-money stock options and deferred stock
accounts.
Certain Related Party Transactions
Mr. Sheldon M. Bonovitz, a director of the Company, is Chairman and Chief
Executive Officer of the law firm of Duane, Morris & Heckscher LLP, which
provides services to the Company from time to time.
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 provides services to the Company and
received payments for such services from the Company of approximately $231,000
in 1998.
Mr. Daniel Aaron, a director of the Company during part of 1998, 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 1998. During 1998, Mr. Aaron also earned the following amounts
related to his prior service as a full-time executive officer of the Company:
$51,387 under the Company's Supplemental Executive Retirement Plan, $30,000
under the Company's Executive Deferred Compensation Plan, and bonuses
aggregating $40,289 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. Aaron retired from the Board
of Directors on September 23, 1998.
Compensation Committee Interlocks and Insider Participation
Mr. Sheldon M. Bonovitz, a member of the Compensation Committee, is Chairman
and Chief Executive Officer of the law firm of Duane, Morris & Heckscher LLP,
which provides services to the Company from time to time. Mr. Bonovitz is a
nephew by marriage of Mr. Ralph J. Roberts and a cousin by marriage of Mr.
Brian L. Roberts. Mr. Bonovitz is not a member of the Compensation
Subcommittee, which, during 1998, performed substantially all functions of the
Compensation Committee with respect to senior executives of the Company,
including administration of the Company's stock option and restricted stock
plans, the bonus plans applicable to senior executives of the Company, and all
agreements with Messrs. Roberts.
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PROPOSAL ONE
ELECTION OF DIRECTORS
At the meeting, the shareholders will elect nine directors to hold office
for the ensuing year and until their respective successors have been duly
elected and qualified. Should any one or more of these nominees become
unavailable to accept nomination or election as a director, the persons named
in the enclosed proxy will vote the shares which they represent for the
election of such other persons as the Board of Directors may recommend, unless
the Board of Directors reduces the number of directors. Each of the nominees
currently is serving as a director of the Company.
The following sets forth certain information about each nominee:
Ralph J. Roberts, 79, has served as a director and Chairman of the Board of
Directors of the Company for more than five years. He is the President and a
director of Sural. Mr. Roberts devotes the major portion of his time to the
business and affairs of the Company. He is the father of Mr. Brian L. Roberts.
Mr. Roberts is also a director of Comcast Cable Communications, Inc., Comcast
Cellular Corporation, and Jones Intercable, Inc.
Julian A. Brodsky, 65, 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
Comcast Cable Communications, Inc., Comcast Cellular Corporation, and RBB
Fund, Inc.
Brian L. Roberts, 39, has served as President of the Company and a director
for more than five years. He is a Vice President and a director of Sural. Mr.
Roberts devotes the major portion of his time to the business and affairs of
the Company. He is a son of Mr. Ralph J. Roberts. Mr. Roberts is also a
director of Comcast Cable Communications, Inc., Comcast Cellular Corporation,
At Home Corporation, The Bank of New York Company, Inc., and Jones Intercable,
Inc.
Gustave G. Amsterdam, 90, 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, 62, has been a director of the Company for more than
five years. Mr. Bonovitz has been a partner specializing in tax matters with
the law firm of Duane, Morris & Heckscher LLP for more than five years and is
currently Chairman and Chief Executive Officer of that firm. Mr. Bonovitz is 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.
Joseph L. Castle, II, 66, has been a director of the Company for more than
five years. Mr. Castle has been, for more than five years, a financial
consultant and is the Chairman and Chief Executive Officer and a director of
Castle Energy Corporation, an independent oil and gas exploration and
production company. Mr. Castle is also a director of Charming Shoppes, Inc.
Bernard C. Watson, 71, has been a director of the Company for more than five
years. Prior to his retirement in 1997, Dr. Watson was Chairman of the Board
of Directors of Health Management Alternatives Foundation from 1993 through
1997. Until 1993, he had been President and Chief Executive Officer of the
William Penn Foundation for more than five years.
Irving A. Wechsler, 78, has been a director of the Company for more than
five years. Mr. Wechsler is currently of counsel in the firm of Wechsler,
Wolsh and Associates, Certified Public Accountants, in Pittsburgh,
Pennsylvania, where he had previously been a partner for more than five years.
27
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Anne Wexler, 69, 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 Dreyfus Corporation Index Funds, The
Dreyfus Corporation Mutual Funds, New England Electric System, Nova
Corporation, and Wilshire Target Funds, Inc.
Committees and Meetings of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee, and a Nominating Committee. The Compensation Committee
has a Subcommittee on Performance-Based Compensation.
Messrs. Ralph J. Roberts (Chairman), Amsterdam, Bonovitz, and Brian L.
Roberts serve as members of the Executive Committee, which held six meetings
during 1998. The Executive Committee acts for the directors in the intervals
between meetings of the Board of Directors.
Messrs. Amsterdam, Bonovitz, Castle, Watson, and Wechsler (Chairman) serve
as members of the Audit Committee, which held two meetings during 1998. The
Audit Committee meets with the Company's independent public accountants,
counsel, internal audit department and management to discuss the scope and
results of the annual audit, internal accounting procedures and certain other
questions of accounting policy.
Messrs. Amsterdam and Castle serve as members of the Subcommittee on
Performance-Based Compensation of the Compensation Committee, which held eight
meetings during 1998. The Compensation Subcommittee's functions include
responsibility for the Company's stock option, restricted stock and bonus
plans, establishing performance-based criteria and goals for compensation to
senior executive officers, and approving certain agreements with the Chief
Executive Officer and Mr. Brian L. Roberts. Messrs. Amsterdam (Chairman),
Bonovitz, and Castle serve as members of the Compensation Committee, which
considers and determines all other compensation matters relating to the
Company's executive officers. The Compensation Committee held eight meetings
during 1998, in conjunction with meetings of the Compensation Subcommittee.
Ms. Wexler (Chairperson) and Messrs. Castle and Watson serve as members of
the Nominating Committee, which met once during 1998. Mr. Daniel Aaron was
also a member of the Nominating Committee in 1998. The Nominating Committee
reviews the size and composition of the Board of Directors and is responsible
for recommending nominees to serve on the Board of Directors. In carrying out
its responsibilities, the Nominating Committee will consider candidates
recommended by other directors, employees and shareholders. Written
suggestions for candidates to serve as directors if nominated and elected
should be sent to the President of the Company at Comcast Corporation, 1500
Market Street, Philadelphia, Pennsylvania 19102-2148. The Company's by-laws
require that written notice of the intent to make a nomination at a meeting of
shareholders must be received by the President of the Company (a) with respect
to an election to be held at an annual meeting, not less than 90 days in
advance of the date which is the one year anniversary of the prior year's
annual meeting of shareholders, and (b) with respect to an election to be held
at a special meeting, the close of business on the seventh day following the
day on which notice of a special meeting of shareholders for the election of
directors is given to shareholders. The notice must contain: (a) the name and
address of the shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the shareholder
is a holder of record of the Company's stock entitled to vote at the meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the shareholder; (d) such
other information regarding each nominee proposed by such shareholder as would
have been required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange
28
<PAGE>
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 ten meetings in 1998. No member of the Board of
Directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by
all committees of the Board of Directors on which such director served.
PROPOSAL TWO
TO APPROVE AN AMENDMENT TO THE
COMCAST CORPORATION 1996 STOCK OPTION PLAN
The Company's 1996 Stock Option Plan (the "1996 Plan") is the Company's
basic plan for awarding options to purchase shares of the Company's Class A
Special Common Stock to the Company's employees and non-employee directors. A
description of the terms of the 1996 Plan is provided below. The Company's
shareholders will vote at the meeting on a proposal to increase the limit on
the number of shares for which options may be granted under the 1996 Plan to
any individual in a single calendar year from 2 million shares to 10 million
shares (adjusted to reflect the Stock Split).
Prior to June 1998, the 1996 Plan included a provision that limits option
grants to any employee in a single calendar year to 2 million shares (after
adjustment to reflect the Stock Split). Pursuant to Section 162(m) of the
Internal Revenue Code, stock option plans such as the 1996 Plan must state the
maximum number of options that can be awarded to an employee during a
specified period, which must be approved by shareholders, in order for the
company issuing the stock to be able to obtain full tax deductibility when
nonqualified options awarded under the plan are exercised by the chief
executive officer or one of the four other executive officers with the highest
compensation.
In June 1998, the Compensation Subcommittee amended the 1996 Plan to
increase the annual limit to 4 million shares (after adjustment to reflect the
Stock Split), and it further increased the annual limit to 10 million shares
in March 1999, in each case subject to approval by the Company's shareholders
at the 1999 Annual Meeting of Shareholders. The first such amendment was
effected in connection with awarding Mr. Brian L. Roberts, the Company's
President, options to purchase 2,999,424 shares of Class A Special Common
Stock at $16.9375 per share, the fair market value of the Class A Special
Common Stock on the date of grant as determined under the 1996 Plan, and 576
shares of Class A Special Common Stock at $18.6313 per share (after adjustment
to reflect the Stock Split). The options so awarded have a term of ten years
from the date of grant (five years in the case of the option for 576 shares).
Based on continuous employment by the Company, half of such options vest at
the rate of 40% of the shares covered thereby on the second anniversary of the
date of grant, and 20% on each of the third, fourth, and fifth anniversaries
of the date of the grant (or, in the case of the option for 576 shares, six
months prior to such fifth anniversary), and half vest at the rate of 20% of
the shares covered thereby on the second anniversary of the date of grant,
another 10% on each of the third through ninth anniversaries of the date of
grant, and 10% six months prior to the tenth anniversary of the date of grant.
Provided the amendment to the 1996 Plan is approved by shareholders, the
Compensation Subcommittee intends to grant Mr. Brian L. Roberts options for up
to 4 million shares of Class A Special Common Stock in each of 1999 and 2000,
at exercise prices not less than the fair market value of the Class A Special
Common Stock on the applicable dates of grant. Options granted to him in 1999
to date do not exceed the former 2 million share limit (adjusted to reflect
the Stock Split).
No other person has been awarded options to purchase more than 2 million
shares of the Company's common stock (adjusted to reflect the Stock Split)
under the 1996 Plan in any year. For information on stock option grants under
the 1996 Plan to the Chief Executive Officer and to each of the Company's
other four most highly compensated executive officers during 1998, see "Stock
Option Grants in 1998" above.
29
<PAGE>
The following table shows the benefits Mr. Brian L. Roberts will receive, if
Proposal Two is adopted by the Company's shareholders, in excess of the
benefits he would receive under the unamended 1996 Plan. All share amounts and
exercise prices are adjusted to reflect the Stock Split. Options which may be
awarded in the future are not included in the table, as their value cannot be
determined.
NEW PLAN BENEFITS
1996 Stock Option Plan
<TABLE>
<CAPTION>
Additional
Options to
Purchase Value of
Class A Special Exercise Expiration Unvested
Name and Position Common Stock Price Date Options
- ----------------- --------------- -------- ------------- --------------
<S> <C> <C> <C> <C>
Brian L. Roberts,
President.............. 1,169,610 $16.9375 June 16, 2008 $14,620,125(1)
</TABLE>
- --------
(1) Value based on the difference between the April 19, 1999 closing price and
the exercise price of the options (the fair market value of shares on June
16, 1998).
Description of the 1996 Plan
The following is a summary of the material features of the 1996 Plan.
The 1996 Plan provides for the grant of options to purchase shares of the
Company's Class A Special Common Stock to employees (whether or not members of
the Board of Directors) of the Company and its parents or subsidiaries
("Affiliates") within the meaning of Sections 424(e) and (f) of the Internal
Revenue Code of 1986, as amended (the "Code"), as designated by the Company's
Board of Directors or a committee of two or more of its non-employee members
appointed by the Board of Directors, and for the grant of options to non-
employee directors of the Company. Except to the extent an option granted
under the 1996 Plan is specifically designated as a nonqualified option (as
defined below) or otherwise becomes a nonqualified option after grant, options
granted to employees of the Company or its Affiliates under the 1996 Plan are
intended to qualify as qualified stock options (sometimes hereinafter referred
to as "ISOs") within the meaning of Section 422(b) of the Code. Options
granted under the 1996 Plan to non-employee directors of the Company, options
granted to employees under the 1996 Plan which are specifically designated as
nonqualified options, and options otherwise ineligible for treatment as an ISO
are hereinafter referred to as "nonqualified options."
No Options may be granted under the 1996 Plan after March 12, 2006.
The 1996 Plan is intended as an additional incentive to employees and non-
employee directors to enter into or remain in the employ of the Company or its
Affiliates or to serve on the Board of Directors of the Company or any of its
Affiliates and to devote themselves to the Company's success by providing them
with an opportunity to acquire or increase their proprietary interest in the
Company through the receipt of options to purchase the Company's Class A
Special Common Stock.
ISOs and nonqualified options are sometimes hereinafter collectively
referred to as "Options." Recipients of Options are hereinafter referred to as
"Optionees." Shares of the Company's Class A Special Common Stock are
sometimes hereinafter referred to as "Shares." Shares which may be issued upon
exercise of Options are hereinafter referred to as "Option Shares." The
members of the committee or subcommittee of the Board of Directors
administering the 1996 Plan is sometimes referred to, with respect to the Plan
subject to their administration, as the "Committee."
30
<PAGE>
Eligibility
All employees of the Company and its Affiliates are eligible to receive ISOs
under the 1996 Plan. All employees, officers and non-employee directors of the
Company and its Affiliates are eligible to receive nonqualified options under
the 1996 Plan. An employee may receive more than one Option under the 1996
Plan but only on the terms and subject to the restrictions of the 1996 Plan.
In determining the eligible participants to whom Options are granted under
the 1996 Plan and the number of Shares covered by such Options, the Committee
may take into account the nature of such participant's services and
responsibilities, his or her present and potential contributions to the
Company's success and such other factors as the Committee may deem relevant.
The 1996 Plan provides that the maximum number of shares of the Class A
Special Common Stock for which Options may be issued to any single individual
in any calendar year is 10 million shares (adjusted for the Stock Split),
subject to adjustment as described under "Purchase of Shares Under the 1996
Plan" below and subject to shareholder approval. The 1996 Plan provides that
each non-employee director of the Company shall receive a grant of Options to
purchase 5,400 shares of Class A Special Common Stock on each February 1,
except that any non-employee director first elected to the Board of Directors
after March 13, 1996, shall receive a grant of Options to purchase 9,000
shares of Class A Special Common Stock on February 1 of such newly elected
director's first year as a member of the Board of Directors.
Shares Covered By The 1996 Plan
The 1996 Plan provides for the grant of Options to purchase up to an
aggregate of 40 million shares of the Company's Class A Special Common Stock
(adjusted for the Stock Split). If an Option granted under the 1996 Plan
expires or terminates without having been exercised in full, the Option Shares
allocable to the unexercised portion of such Option will be available for the
grant of additional Options under the 1996 Plan, to the extent additional
Options thereunder may be granted.
Administration
The 1996 Plan provides that it will be administered by the Subcommittee on
Performance-Based Compensation of the Compensation Committee of the Board of
Directors, or any other committee or subcommittee designated by the Board of
Directors of the Company, provided it is composed of two or more non-employee
members of the Board of Directors of the Company, each of whom is an "outside
director" within the meaning of the Code. Currently, the Subcommittee on
Performance-Based Compensation of the Compensation Committee of the Board of
Directors administers the 1996 Plan.
The Committee is authorized under the 1996 Plan to determine the Optionees
to whom and the times at which the Options are granted and become exercisable.
Subject to the provisions of the 1996 Plan, the Committee also is authorized
to determine the number of Shares issuable upon exercise of each Option and
other terms and conditions of the Option. In addition, the 1996 Plan provides
that the Committee may determine whether an Option is intended to be an ISO.
Under certain circumstances, the Committee may have the power to accelerate or
extend the exercise date of outstanding Options. See "Amendments," "Methods of
Exercise" and "Termination" below.
The individual option document (the "Option Document") for each Option sets
forth the terms of such Option. The Option Documents are in such form as the
Committee shall from time to time approve. The interpretation and construction
by the Committee of any provision of the 1996 Plan, or of any Option Document,
is final, binding and conclusive.
31
<PAGE>
Purchase of Shares Under the 1996 Plan
Under the 1996 Plan, the Committee sets forth in each Option Document the
exercise price for the Option Shares covered thereby (the "Option Price"),
provided that the Option Price of ISOs may not be less than 100% of the fair
market value of such Shares on the date or at the time that the Option is
granted. In addition, if an ISO is granted to an Optionee who then owns,
directly or by attribution under Section 424(d) of the Code, shares possessing
more than 10% of the total combined voting power of all classes of stock of
the Company or an Affiliate, the Option Price must be at least 110% of the
fair market value of such Shares on the date the Option is granted. The 1996
Plan provides that "fair market value" shall generally be determined based on
the last reported sale price of Shares on the last trading day prior to the
date on which such value is determined.
The number of Shares of Class A Special Common Stock for which Options may
be granted under the 1996 Plan, and the number of Shares of Class A Special
Common Stock issuable upon exercise of Options granted under the 1996 Plan,
and the exercise price for such Options, are subject to adjustment in the
event of a stock dividend, stock split or certain other capital adjustments.
No adjustment will be made in respect of the issuance of Shares on the
conversion of other securities of the Company that are convertible into such
class or classes of Shares.
Amendments
The Committee, with the consent of an Optionee, may amend the provisions of
Option Documents under the 1996 Plan. Under the 1996 Plan, consent of the
Optionee is not required for acceleration of the expiration date of an Option
in the event of the dissolution or liquidation of the Company or upon the
occurrence of certain other corporate transactions. See "Termination" below.
The Committee, with the consent of the Optionee, may amend the provisions of
the 1996 Plan to the extent necessary to maintain ISOs as incentive stock
options within the meaning of the Code.
The Committee may amend the 1996 Plan from time to time in such manner as it
may deem advisable. However, amendments to change the class of individuals
eligible to receive ISOs under the 1996 Plan, extend the expiration date of
the 1996 Plan, decrease the minimum Option Price of an ISO granted under the
1996 Plan or increase the aggregate 40 million share maximum number of Shares
for which Options may be granted (other than as a result of adjustments in the
event of a stock dividend, stock split or certain other capital adjustments)
are not effective unless shareholder approval is obtained within twelve months
before or after such action. In addition, provisions of the 1996 Plan relating
to grants of Options to non-employee directors that determine (i) which
directors are granted Options pursuant to such provisions; (ii) the number of
Shares subject to Options granted under such provisions; (iii) the Option
Price of such Shares; and (iv) the timing of grants of Options pursuant to
such provisions may not be amended more than once every six months, other than
to comport with the Code or the Employee Retirement Income Security Act of
1974, if applicable.
The power of the Board of Directors or the Committee to amend Option
Documents or the 1996 Plan may be subject to limitations contained in
applicable provisions of the Code and federal securities laws and regulations.
Methods of Exercise
An Option granted under the 1996 Plan may be exercised by the Optionee only
by written notice to the Company. The notice required under the 1996 Plan must
specify the number of Shares to be purchased and must be accompanied by
payment in full of the purchase price. Payment may be made in cash, by
certified check payable to the order of the Company, or by a combination of
the foregoing. In addition, if the Committee so provides in an Option
Document, payment may be made all or in part in shares of Class A Special
Common Stock or Class A Common Stock; provided, however, that the Option
Shares may not be paid for in shares of Class A Special Common Stock or Class
A Common
32
<PAGE>
Stock if such method of payment would result in liability under Section 16(b)
of the Securities Exchange Act of 1934, or if the Optionee does not own as of
the date the relevant option is exercised a number of shares held for at least
six months at least equal to the number of shares used to pay the exercise
price of the Option.
There is no limitation on the number of Shares an Optionee may acquire under
the 1996 Plan in any given year through the exercise of outstanding Options,
except as may be provided by the Committee in an Option Document.
Termination
The term during which an Option may be exercised is set out in the
individual Option Document, but may not exceed (i) ten years from the date of
grant or, (ii) with respect to ISOs, five years from the date of grant if the
Optionee on the date of grant owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of an Affiliate.
An Optionee's right to exercise any part of an Option granted pursuant to
the 1996 Plan terminates on the first to occur of: (i) expiration of the
Option term specified in the Option Document, which is subject to the
limitations described in the preceding paragraph; (ii) expiration of three
months from the date when the Optionee ceases to be an employee of the Company
or an Affiliate for any reason other than disability (as defined in Section
22(e)(3) of the Code), death or a finding of the Committee that the employee
has breached his or her employment contract with, or has been engaged in any
sort of disloyalty to, or has disclosed trade secrets of, the Company or an
Affiliate, provided that the Committee may specify in an Option Document that
an Option may be exercisable during a longer period after the Optionee ceases
to be an employee, but in no event later than the expiration of the Option
term specified in the Option Document; (iii) expiration of one year from the
date the Optionee's employment with the Company or an Affiliate terminates as
a result of an Optionee's death or disability; (iv) the date set by the
Committee as an accelerated expiration date in the event of the dissolution or
liquidation of the Company or any other transaction in which an unaffiliated
third party acquires more than 50% of the voting power for election of
directors of the Company; or (v) the date of a finding by the Committee that
the Optionee has breached his or her employment contract with the Company or
an Affiliate, has been engaged in any sort of disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his or her
employment, or has disclosed trade secrets of the Company or an Affiliate. In
the event of such a finding by the Committee, in addition to immediate
termination of the Option, the Optionee, upon a determination by the
Committee, will forfeit all Option Shares for which the Company has not yet
delivered stock certificates representing the Option Shares, upon refund by
the Company of the exercise price of the Option.
Transferability of Options
In general, Options granted under the 1996 Plan are not transferable by the
Optionee except by will or by the laws of descent and distribution, and,
during the lifetime of the Optionee, Options may be exercised only by the
Optionee. However, the 1996 Plan provides that the Committee may, in its
discretion, provide in an Option Document or an amendment thereto that such
Options may be transferred to members of the Optionee's immediate family, or
trusts or partnerships the sole beneficiaries or partners of which are members
of the Optionee's immediate family or the Optionee, provided that such
transfer is without consideration. Any Options so transferred will remain
subject to all conditions applicable to the Options, as set forth in the 1996
Plan or the relevant Option Documents, except that the consent of the
transferee of the Options (rather than that of the original Optionee) will be
required in order to amend the transferred Options. See "Amendments" above.
Any Option which is made transferable to the extent provided in the 1996 Plan
will be a nonqualified option.
33
<PAGE>
Cash Rights
The 1996 Plan provides that the Committee may, in its sole discretion, give
an Optionee the right to receive the value of any nonqualified Option in cash
upon exercise of the Option rather than to pay the exercise price of the
Option and receive Shares. Such rights must be attached to specific Options
and are subject to the same vesting, expiration and transferability terms as
the Options to which they are attached. Options and associated cash rights may
not be exercised separately.
Withholding of Taxes
Whenever the Company is required to deliver or transfer Shares of Class A
Special Common Stock in connection with the exercise of an Option under the
1996 Plan, the Company has the right to require the Optionee to remit or
otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such shares or to take
whatever action it deems necessary to protect its interests with respect to
tax liabilities in connection with the issuance of such shares.
Under the 1996 Plan, tax liabilities incurred in connection with the
exercise of an Option will be satisfied by the Company's withholding a portion
of the Option Shares underlying the Option that have a fair market value
approximately equal to the minimum amount of taxes required to be withheld by
the Company under applicable law, unless otherwise determined by the Committee
with respect to any Optionee. However, the Committee may permit an Optionee to
elect to have taxes withheld in excess of the minimum amount required to be
withheld by the Company (provided the Optionee certifies at the time of such
election that he or she has held for at least six months a number of Shares at
least equal to the number of all Option Shares withheld in excess of the
minimum amount), or to pay to the Company in cash all or a portion of the
taxes to be withheld upon the exercise of an Option. The Committee may add
such other requirements and limitations regarding these elections as it deems
appropriate.
Federal Income Taxation
The following discussion is intended to point out the general principles of
current federal income tax law applicable to the Options issued under the 1996
Plan.
Incentive Stock Options. For the purposes of the regular income tax
currently imposed under the Code, the holder of an Option under the 1996 Plan
which is an ISO will not recognize taxable income upon either the grant or
exercise of the Option.
The Optionee will recognize long-term capital gain or loss on a disposition
of the Option Shares acquired upon exercise of an ISO provided the Optionee
does not dispose of the Option Shares within two years from the date the ISO
was granted and within one year after the Option Shares were transferred to
the Optionee. For purposes of determining such gain or loss, the Optionee's
basis in such Shares will, in general, be the Optionee's Option Price. Under
present law, long-term capital gain is subject to an effective tax rate of
20%, while ordinary income may be taxed at a maximum effective rate of 39.6%.
If the Optionee satisfies both of the holding periods described above, then
the Company will not be allowed a deduction by reason of the exercise of the
ISO.
The amount, if any, by which the fair market value of an Option Share at the
time of exercise (determined without regard to certain transfer restrictions)
exceeds the Option Price will be included in the computation of the Optionee's
"alternative minimum taxable income," generally in the year he or she
exercises the ISO, for purposes of the "alternative minimum tax" imposed by
Section 55 of the Code. If an Optionee pays alternative minimum tax, the
amount of such tax paid that is attributable to the exercise of ISOs will be
allowed as a credit against regular tax liability in subsequent years in which
the Optionee's regular tax liability (reduced by certain other tax credits)
exceeds his or her
34
<PAGE>
tentative minimum tax. Further, the Optionee's basis in Option Shares acquired
through exercise of an ISO will, for alternative minimum tax purposes, equal
the fair market value of the Option Shares taken into account in determining
the Optionee's alternative minimum taxable income.
As a general rule, if the Optionee disposes of the Option Shares before
satisfying the holding period requirements discussed above (a "disqualifying
disposition"), his or her gain recognized on the disqualifying disposition
will be taxed as ordinary income to the extent of the difference between the
fair market value of the Option Shares on the date of exercise and the
adjusted basis of the Option Shares (or, in certain cases, the excess of the
amount realized on disposition over the adjusted basis, if such excess is less
than the amount arrived at by the former calculation), and the Company will be
entitled to a deduction in that amount.
The gain (if any) in excess of the amount recognized as ordinary income on a
disqualifying disposition will be long-term or short-term capital gain,
depending upon the length of time the recipient held the Option Shares prior
to the disposition.
Optionees may be permitted to exercise ISOs by transferring to the Company
shares of the Company's Class A Special Common Stock or Class A Common Stock
then held by the Optionee ("Prior Shares") having a market value equal to the
Option Price of the Shares to be purchased (see "Methods of Exercise" above).
If the Optionee acquired the Prior Shares by exercise of an ISO and the
Optionee has not satisfied the holding period requirements described above for
the Prior Shares, then the transfer will be treated as a disqualifying
disposition by the Optionee of the Prior Shares. However, if the Optionee did
not acquire the Prior Shares by exercise of an ISO or if the Optionee has
satisfied the holding period requirements applicable to the Prior Shares, then
the Optionee will not recognize gain or loss upon the exchange. In that case,
the Optionee's basis and holding period (for purposes other than the Option
holding period rules) in the Prior Shares will carry over to a corresponding
number of Option Shares received. The Optionee's basis in any additional
Option Shares received will be zero and his or her holding period will begin
on the date the Optionee becomes the owner of such Shares.
If an Option granted under the 1996 Plan which is intended to be an ISO
fails to qualify as such under applicable rules and regulations of the Code,
such Option will be subject to the general principles of Federal income tax
law discussed below with respect to nonqualified options.
Nonqualified Options. For Federal income tax purposes, the holder of an
option that is not an ISO (a "nonqualified option") will not recognize taxable
income at the time of grant, and the Company will not be allowed a deduction
by reason of the grant of a nonqualified option. The Optionee will in general
recognize ordinary income upon exercise of the nonqualified option, in an
amount equal to the excess of the fair market value of the Option Shares
received at the time of exercise (including Option Shares withheld by the
Company to satisfy tax withholding obligations) over the exercise price of the
nonqualified option, and the Company will be allowed a deduction in that
amount.
Upon disposition of the Option Shares, the Optionee will recognize long-term
or short-term capital gain or loss, depending upon the length of time he or
she held the Option Shares prior to disposition. The amount of long-term or
short-term capital gain or loss recognized by the Optionee upon disposition of
the Option Shares will be an amount equal to the difference between the amount
realized on the disposition and the Optionee's basis in the Option Shares
(which basis is ordinarily the fair market value of the Option Shares on the
date the Option was exercised).
Optionees may be permitted to exercise nonqualified options by transferring
to the Company shares having a market value equal to the Option Price of the
Shares to be purchased (see "Methods of Exercise" above). In that case, no
income will be recognized on the receipt of a corresponding number of Option
Shares, and the Optionee's basis and holding period in the Prior Shares will
carry
35
<PAGE>
over to the corresponding number of Option Shares received. The Optionee's
basis in such additional Option Shares received will equal the amount
includable in the Optionee's income and his or her holding period will begin
on the date the Optionee becomes the owner of such shares.
Certain Optionees may be permitted to transfer nonqualified options to
members of their immediate family, or certain trusts or partnerships, without
consideration. See "Transferability of Options" above. In the case of any
nonqualified option so transferred, the original Optionee will recognize
income upon the exercise of the option by the transferee to the same extent as
if the original Optionee had exercised the option, and the Company's
concurrent deduction will also be the same. The transferee's basis and holding
period in the stock received upon exercise of the transferred option will be
the same basis and holding period as would have applied had the original
Optionee exercised the option in the same manner used by the transferee to
exercise the option.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE COMCAST CORPORATION 1996 STOCK OPTION PLAN.
PROPOSAL THREE
TO APPROVE AMENDMENTS TO THE COMCAST
CORPORATION 1996 EXECUTIVE CASH BONUS PLAN
The Comcast Corporation 1996 Executive Cash Bonus Plan (the "Executive Cash
Bonus Plan"), which is described above under the heading "Executive Cash Bonus
Plan," is the annual cash bonus plan applicable to the Company's named
executive officers and five additional employees, one of whom is an executive
officer. The company's shareholders will vote at the meeting on a proposal to
extend the Executive Cash Bonus Plan through calendar year 2003 and to
increase the annual limit on bonuses under the Executive Cash Bonus Plan
generally from the lesser of 50% of a participant's base salary and guaranteed
bonus (plus any Target Bonus from previous years that was not earned in full)
or $1 million to the lesser of 150% of a participant's base salary and
guaranteed bonus (plus any Target Bonus from previous years that was not
earned in full) or $3 million.
The Compensation Subcommittee, which administers the Executive Cash Bonus
Plan, determined that the increase in maximum Target Bonus was advisable to
give the Compensation Subcommittee and the Company greater flexibility to pay
competitive cash compensation to the Company's existing senior executives and
to persons the Company wishes to recruit to such positions, while making a
greater portion of such compensation conditional on the Company's achieving
objective annual performance measures set in advance by the Compensation
Subcommittee, and while preserving the Company's ability to deduct such
compensation for federal income tax purposes. Section 162(m) of the Internal
Revenue Code of 1986 requires that the Executive Cash Bonus Plan contain an
annual limit on any bonuses to be awarded, and that such limit be approved by
the Company's shareholders.
Section 162(m) also requires that plans such as the Executive Cash Bonus
Plan be reapproved by shareholders no less frequently than every five years.
The Executive Cash Bonus Plan was approved by shareholders on June 18, 1997
with respect to Plan Years 1996-2000. The Compensation Subcommittee and the
Company believe that the Executive Cash Bonus Plan is extremely useful as the
Company's principal means of providing cash incentive bonus compensation to
senior executives, and that it should be extended through calendar year 2003.
For 1999, the Compensation Subcommittee has granted Mr. Brian L. Roberts,
the Company's President, a Target Bonus in excess of the 50%/$1 million limit
that applied prior to the proposed amendment of the Executive Cash Bonus Plan,
subject to approval of such amendment by the Company's shareholders at the
1999 Annual Meeting of Shareholders. No Target Bonuses have been
36
<PAGE>
granted for years subsequent to 1999. The following table shows the benefits
Mr. Brian L. Roberts will receive, if Proposal Three is adopted by the
Company's shareholders, in excess of the benefits he would receive under the
unamended Executive Cash Bonus Plan.
NEW PLAN BENEFITS
Executive Cash Bonus Plan
<TABLE>
<CAPTION>
Dollar Value of
Name and Position Additional Benefits
----------------- -------------------
<S> <C>
Brian L. Roberts, President.............................. $1,000,000(1)
</TABLE>
- --------
(1) Assumes all performance goals for 1999 are achieved and maximum Target
Bonus is paid.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENTS TO THE COMCAST CORPORATION 1996 EXECUTIVE CASH
BONUS PLAN.
PROPOSAL FOUR
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 2000 must be received by January 15, 2000 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.
37
<PAGE>
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.
38
<PAGE>
[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 Monday,
June 21, 1999 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:
Unless otherwise specified, the shares will be voted "FOR" the election of
all nine nominees for director and "FOR" the other proposals set forth on the
reverse side. This Proxy also delegates discretionary authority to vote with
respect to any other business which may properly come before the meeting and any
adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING, PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K OF COMCAST CORPORATION.
(Continued and to be dated and signed on the reverse side)
Comcast Corporation
P.O. Box 11059
New York, N.Y. 10203-0059
[logo of Comcast Corporation appears here]
<TABLE>
<CAPTION>
VOTE BY INTERNET
24 HOURS A DAY, 7 DAYS A WEEK
<S> <C> <C>
INTERNET MAIL
https://proxy.shareholder.com/comcast
Use the Internet to vote your proxy. Mark, sign and date your proxy card
Have your proxy card in hand when and return it in the postage-paid
you access the website. You will be envelope we have provided.
prompted to enter your control number
located in the box below, to create
an electronic ballot.
Your Internet vote authorizes the named provider to vote If you have submitted your proxy by the Internet
your shares in the same manner as if you marked, signed there is no need for you to mail back your proxy.
and returned the proxy card.
-----------------------------------------
CONTROL NUMBER
FOR INTERNET VOTING
-----------------------------------------
DETACH PROXY CARD HERE IF YOU ARE NOT
VOTING BY INTERNET
</TABLE>
<PAGE>
1. Election of nine Directors
[ ] FOR all nine nominees for director listed below.
[ ] WITHHOLD AUTHORITY to vote for all nine nominees for director
listed below.
[ ] * EXCEPTIONS
* EXCEPT WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S)
WHOSE NAME(S) IS (ARE) LINED THROUGH. Nominees: 01-Ralph J. Roberts, 02-Julian
A. Brodsky, 03-Brian L. Roberts, 04-Gustave G. Amsterdam, 05-Sheldon M.
Bonovitz, 06-Joseph L. Castle, II, 07-Bernard C. Watson, 08-Irving A. Wechsler,
and 09-Anne Wexler.
2. To approve an amendment to the Comcast Corporation 1996 Stock Option
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve amendments to the Comcast Corporation 1996 Executive Cash
Bonus Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. To vote on such other business which may properly come before the
meeting.
Change of Address and/or Comments mark here [ ]
NOTE: Please sign this Proxy exactly as name(s)
appear(s) in address. When signing as attorney-
in-fact, executor, administrator, trustee or
guardian, please add your title as such, and if
signer is a corporation, please sign with full
corporate name by duly authorized officer or
officers and affix the corporate seal. When stock
is issued in the name of two or more persons, all
such persons should sign.
Dated: , 1999
-----------------
----------------------------
Signature of Shareholder
----------------------------
Signature of Shareholder
Votes must be indicated (x) in black or blue
ink.
PLEASE SIGN, DATE AND RETURN IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
<PAGE>
APPENDIX 1
- ----------
COMCAST CORPORATION
1996 STOCK OPTION PLAN
----------------------
(As Amended and Restated, Effective March 3, 1999)
1. Purpose of Plan
The purpose of the Plan is to assist the Company in retaining valued
employees, officers and directors by offering them a greater stake in the
Company's success and a closer identity with it, and to aid in attracting
individuals whose services would be helpful to the Company and would contribute
to its success.
2. Definitions
(a) "Affiliate" means, with respect to any Person, any other Person
---------
that, directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, the term
"control," including its correlative terms "controlled by" and "under common
control with," mean, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
(b) "Board" means the board of directors of the Sponsor.
-----
(c) "Cash Right" means any right to receive cash in lieu of Shares
----------
granted under the Plan and described in Paragraph 3(a)(iii).
(d) "Cause" means:
-----
(i) for an employee of a Company, a finding by the Committee,
after full consideration of the facts presented on behalf of both the
Company and the employee, that the employee has breached his employment
contract with a Company, has disclosed trade secrets of a Company or has
been engaged in any sort of disloyalty to a Company, including, without
limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his employment.
(ii) for a Non-Employee Director, a finding by the
Committee, after full consideration of the facts presented on behalf of
both the Company and the Director, that such Non-Employee Director has
disclosed trade secrets of a Company, or has been engaged in any sort of
disloyalty to a Company, including, without
<PAGE>
limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his service as a Non-Employee Director.
(e) "Change of Control" means any transaction or series of
-----------------
transactions as a result of which any Person who was a Third Party immediately
before such transaction or series of transactions owns then-outstanding
securities of the Sponsor having more than 50 percent of the voting power for
the election of directors of the Sponsor.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
----
(g) "Comcast Plan" means any restricted stock, stock bonus, stock
------------
option or other compensation plan, program or arrangement established or
maintained by the Company or an Affiliate, including but not limited to this
Plan, the Comcast Corporation 1997 Deferred Stock Option Plan, the Comcast
Corporation 1990 Restricted Stock Plan and the Comcast Corporation 1987 Stock
Option Plan.
(h) "Committee" means the committee described in Paragraph 5.
---------
(i) "Common Stock" means the Sponsor's Class A Special Common
------------
Stock, par value, $1.00.
(j) "Company" means the Sponsor and each of the Parent Companies
-------
and Subsidiary Companies.
(k) "Date of Grant" means the date as of which an Option is
-------------
granted.
(l) "Disability" means a disability within the meaning of section
----------
22(e)(3) of the Code.
(m) "Election Date" means the date on which an individual is first
-------------
elected to the Board as a Non-Employee Director, or is elected to the Board as a
Non-Employee Director following a period of one year or more during which such
individual was not a member of the Board.
(n) "Fair Market Value." If Shares are listed on a stock exchange,
-----------------
Fair Market Value shall be determined based on the last reported sale price of a
Share on the principal exchange on which Shares are listed on the last trading
day prior to the date of determination, or, if Shares are not so listed, but
trades of Shares are reported on the Nasdaq National Market, the last quoted
sale price of a Share on the Nasdaq National Market on the last trading day
prior to the date of determination.
(o) "Grant Date" means each February 1st after the date of
----------
adoption of the Plan by the Board.
-2-
<PAGE>
(p) "Immediate Family" means an Optionee's spouse and lineal
----------------
descendants, any trust all beneficiaries of which are any of such persons and
any partnership all partners of which are any of such persons.
(q) "Incentive Stock Option" means an Option granted under the Plan,
----------------------
designated by the Committee at the time of such grant as an Incentive Stock
Option within the meaning of section 422 of the Code and containing the terms
specified herein for Incentive Stock Options; provided, however, that to the
-----------------
extent an Option granted under the Plan and designated by the Committee at the
time of grant as an Incentive Stock Option fails to satisfy the requirements for
an incentive stock option under section 422 of the Code for any reason, such
Option shall be treated as a Non-Qualified Option.
(r) "Non-Employee Director" means an individual who is a member of the
---------------------
Board, and who is not an employee of a Company, including an individual who is a
member of the Board and who previously was an employee of a Company.
(s) "Non-Qualified Option" means:
--------------------
(i) an Option granted under the Plan, designated by the Committee
at the time of such grant as a Non-Qualified Option and containing the
terms specified herein for Non-Qualified Options; and
(ii) an Option granted under the Plan and designated by the
Committee at the time of grant as an Incentive Stock Option, to the extent
such Option fails to satisfy the requirements for an incentive stock option
under section 422 of the Code for any reason.
(t) "Option" means any stock option granted under the Plan and
------
described in either Paragraph 3(a)(i) or Paragraph 3(a)(ii).
(u) "Optionee" means a person to whom an Option has been granted under
--------
the Plan, which Option has not been exercised in full and has not expired or
terminated.
(v) "Other Available Shares" means, as of any date, the excess,
----------------------
if any of:
(i) the total number of Shares owned by an Optionee; over
(ii) the sum of:
(x) the number of Shares owned by such Optionee for less
than six months; plus
-3-
<PAGE>
(y) the number of Shares owned by such Optionee that
has, within the preceding six months, been the
subject of a withholding certification pursuant to
Paragraph 16(b) or any similar withholding
certification under any other Comcast Plan; plus
(z) the number of Shares owned by such Optionee that
has, within the preceding six months, been received
in exchange for Shares surrendered as payment, in
full or in part, of the exercise price for an option
to purchase any securities of the Sponsor or an
Affiliate under any Comcast Plan, but only to the
extent of the number of Shares surrendered.
For purposes of this Paragraph 2(v), a Share that is subject to a deferral
election pursuant to another Comcast Plan shall not be treated as owned by an
Optionee until all conditions to the delivery of such Share have lapsed. For
purposes of Paragraphs 7(d), 8(d) and 16(b), the number of Other Available
Shares shall be determined separately for the Sponsor's Class A Special Common
Stock, par value, $1.00, and for the Sponsor's Class A Common Stock, par value,
$1.00.
(w) "Outside Director" means a member of the Board who is an "outside
----------------
director" within the meaning of section 162(m)(4)(C) of the Code and applicable
Treasury Regulations issued thereunder.
(x) "Parent Company" means all corporations that, at the time in
--------------
question, are parent corporations of the Sponsor within the meaning of section
424(e) of the Code.
(y) "Person" means an individual, a corporation, a partnership, an
------
association, a trust or any other entity or organization.
(z) "Plan" means the Comcast Corporation 1996 Stock Option Plan.
----
(aa) "Roberts Family." Each of the following is a member of the
--------------
Roberts Family:
(i) Brian L. Roberts;
(ii) a lineal descendant of Brian L. Roberts; or
(iii) a trust established for the benefit of any of Brian L.
Roberts and/or a lineal descendant or descendants of Brian L. Roberts.
-4-
<PAGE>
(bb) "Share" or "Shares" means:
----- ------
(i) for all purposes of the Plan, a share or shares of Common
Stock or such other securities issued by the Sponsor as may be the subject
of an adjustment under Paragraph 11.
(ii) solely for purposes of Paragraphs 2(n), 2(v), 7(d),
8(d) and 16(b), the term "Share" or "Shares" also means a share or shares
of the Sponsor's Class A Common Stock, par value, $1.00.
(cc) "Sponsor" means Comcast Corporation, a Pennsylvania
-------
corporation, including any successor thereto by merger, consolidation,
acquisition of all or substantially all the assets thereof, or otherwise.
(dd) "Subsidiary Companies" means all corporations that, at the
--------------------
time in question, are subsidiary corporations of the Sponsor within the meaning
of section 424(f) of the Code.
(ee) "Ten Percent Shareholder" means a person who on the Date of
-----------------------
Grant owns, either directly or within the meaning of the attribution rules
contained in section 424(d) of the Code, stock possessing more than 10% of the
total combined voting power of all classes of stock of his employer corporation
or of its parent or subsidiary corporations, as defined respectively in sections
424(e) and (f) of the Code, provided that the employer corporation is a Company.
(ff) "Terminating Event" means any of the following events:
-----------------
(i) the liquidation of the Sponsor; or
(ii) a Change of Control.
(gg) "Third Party" means any Person other than a Company,
-----------
together with such Person's Affiliates, provided that the term "Third Party"
shall not include the Sponsor, an Affiliate of the Sponsor or any member or
members of the Roberts Family.
(hh) "1933 Act" means the Securities Act of 1933, as amended.
--------
(ii) "1934 Act" means the Securities Exchange Act of 1934, as
--------
amended.
-5-
<PAGE>
3. Rights To Be Granted
(a) Types of Options and Other Rights Available for Grant.
-----------------------------------------------------
Rights that may be granted under the Plan are:
(i) Incentive Stock Options, which give an Optionee who is an
employee of a Company the right for a specified time period to purchase a
specified number of Shares for a price not less than the Fair Market Value
on the Date of Grant;
(ii) Non-Qualified Options, which give the Optionee the
right for a specified time period to purchase a specified number of Shares
for a price determined by the Committee; and
(iii) Cash Rights, which give an Optionee the right for a
specified time period, and subject to such conditions, if any, as shall be
determined by the Committee and stated in the option document, to receive a
cash payment of such amount per Share as shall be determined by the
Committee and stated in the option document, in lieu of exercising a Non-
Qualified Option.
(b) Limit on Grant of Options. Subject to the approval of the
-------------------------
Sponsor's shareholders, effective June 16, 1998, the maximum number of Shares
for which Options may be granted to any single individual in any calendar year,
adjusted as provided in Paragraph 11, shall be 5,000,000 Shares.
(c) Presumption of Incentive Stock Option Status. Each Option granted
--------------------------------------------
under the Plan to an employee of a Company is intended to be an Incentive Stock
Option, except to the extent any such grant would exceed the limitation of
Paragraph 9 and except for any Option specifically designated at the time of
grant as an Option that is not an Incentive Stock Option.
4. Shares Subject to Plan
Subject to adjustment as provided in Paragraph 11, not more than
20,000,000 Shares in the aggregate may be issued pursuant to the Plan upon
exercise of Options. Shares delivered pursuant to the exercise of an Option
may, at the Sponsor's option, be either treasury Shares or Shares originally
issued for such purpose. If an Option covering Shares terminates or expires
without having been exercised in full, other Options may be granted covering the
Shares as to which the Option terminated or expired.
-6-
<PAGE>
5. Administration of Plan
(a) Committee. The Plan shall be administered by the Subcommittee on
---------
Performance Based Compensation of the Compensation Committee of the Board or any
other committee or subcommittee designated by the Board, provided that the
committee administering the Plan is composed of two or more non-employee members
of the Board, each of whom is an Outside Director. Notwithstanding the
foregoing, if Non-Employee Directors are granted Options in accordance with the
provisions of Paragraph 8, the directors to whom such Options will be granted,
the timing of grants of such Options, the Option Price of such Options and the
number of Option Shares included in such Options shall be as specifically set
forth in Paragraph 8. No member of the Committee shall participate in the
resolution of any issue that exclusively involves an Option granted to such
member.
(b) Meetings. The Committee shall hold meetings at such times and
--------
places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.
(c) Exculpation. No member of the Committee shall be personally
-----------
liable for monetary damages for any action taken or any failure to take any
action in connection with the administration of the Plan or the granting of
Options thereunder unless (i) the member of the Committee has breached or failed
to perform the duties of his office, and (ii) the breach or failure to perform
constitutes self-dealing, wilful misconduct or recklessness; provided, however,
-----------------
that the provisions of this Paragraph 5(c) shall not apply to the responsibility
or liability of a member of the Committee pursuant to any criminal statute.
(d) Indemnification. Service on the Committee shall constitute
---------------
service as a member of the Board. Each member of the Committee shall be
entitled without further act on his part to indemnity from the Sponsor to the
fullest extent provided by applicable law and the Sponsor's By-laws in
connection with or arising out of any actions, suit or proceeding with respect
to the administration of the Plan or the granting of Options thereunder in which
he may be involved by reasons of his being or having been a member of the
Committee, whether or not he continues to be such member of the Committee at the
time of the action, suit or proceeding.
6. Eligibility
(a) Eligible individuals to whom Options may be granted shall be
employees, officers or directors of a Company who are selected by the Committee
for the grant of Options. Eligible individuals to whom Cash Rights may be
granted shall be individuals who are employees of a Company on the Date of
Grant. The terms and conditions of Options granted to individuals other than
Non-Employee Directors shall be determined by the Committee,
-7-
<PAGE>
subject to Paragraph 7. The terms and conditions of Cash Rights shall be
determined by the Committee, subject to Paragraph 7. The terms and conditions of
Options granted to Non-Employee Directors shall be determined by the Committee,
subject to Paragraph 8.
(b) An Incentive Stock Option shall not be granted to a Ten Percent
Shareholder except on such terms concerning the option price and term as are
provided in Paragraph 7(b) and 7(g) with respect to such a person. An Option
designated as Incentive Stock Option granted to a Ten Percent Shareholder but
which does not comply with the requirements of the preceding sentence shall be
treated as a Non-Qualified Option. An Option designated as an Incentive Stock
Option shall be treated as a Non-Qualified Option if the Optionee is not an
employee of a Company on the Date of Grant.
7. Option Documents and Terms - In General
All Options granted to Optionees other than Non-Employee Directors
shall be evidenced by option documents. The terms of each such option document
shall be determined from time to time by the Committee, consistent, however,
with the following:
(a) Time of Grant. All Options shall be granted within 10 years from
-------------
the earlier of (i) the date of adoption of the Plan by the Board, or (ii)
approval of the Plan by the shareholders of the Sponsor.
(b) Option Price. The option price per Share with respect to any
------------
Option shall be determined by the Committee, provided, however, that with
-----------------
respect to any Incentive Stock Options, the option price per share shall not be
less than 100% of the Fair Market Value of such Share on the Date of Grant, and
provided further that with respect to any Incentive Stock Options granted to a
- ----------------
Ten Percent Shareholder, the option price per Share shall not be less than 110%
of the Fair Market Value of such Share on the Date of Grant.
(c) Restrictions on Transferability. No Option granted under this
-------------------------------
Paragraph 7 shall be transferable otherwise than by will or the laws of descent
and distribution and, during the lifetime of the Optionee, shall be exercisable
only by him or for his benefit by his attorney-in-fact or guardian; provided
--------
that the Committee may, in its discretion, at the time of grant of a Non-
- ----
Qualified Option or by amendment of an option document for an Incentive Stock
Option or a Non-Qualified Option, provide that Options granted to or held by an
Optionee may be transferred, in whole or in part, to one or more transferees and
exercised by any such transferee; provided further that (i) any such transfer is
---------------------
without consideration and (ii) each transferee is a member of such Optionee's
Immediate Family; and provided further that any Incentive Stock Option granted
---------------------
pursuant to an option document which is amended to permit transfers during the
lifetime of the Optionee shall, upon the effectiveness of such amendment, be
treated thereafter as a Non-Qualified Option. No transfer of an Option shall be
effective unless the Committee is notified of the terms and conditions of the
transfer and the Committee determines that the transfer complies with the
requirements for transfers of Options under the Plan and the option document.
-8-
<PAGE>
Any person to whom an Option has been transferred may exercise any Options only
in accordance with the provisions of Paragraph 7(g) and this Paragraph 7(c).
(d) Payment Upon Exercise of Options. Full payment for Shares
--------------------------------
purchased upon the exercise of an Option shall be made in cash, by certified
check payable to the order of the Sponsor, or, at the election of the Optionee
and as the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value equal to the aggregate option price,
or by delivering such combination of Shares and cash as the Committee may, in
its sole discretion, approve; provided, however, that Shares may be surrendered
-----------------
in satisfaction of the option price only if the Optionee certifies in writing to
the Sponsor that the Optionee owns a number of Other Available Shares as of the
date the Option is exercised that is at least equal to the number of Shares to
be surrendered in satisfaction of the Option Price; provided further, however,
----------------
that the option price may not be paid in Shares if the Committee determines that
such method of payment would result in liability under section 16(b) of the 1934
Act to an Optionee. Except as otherwise provided by the Committee, if payment
is made in whole or in part in Shares, the Optionee shall deliver to the Sponsor
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having a Fair Market Value on the date of
delivery that is not greater than the option price accompanied by stock powers
duly endorsed in blank by the record holder of the Shares represented by such
certificates. If the Committee, in its sole discretion, should refuse to accept
Shares in payment of the option price, any certificates representing Shares
which were delivered to the Sponsor shall be returned to the Optionee with
notice of the refusal of the Committee to accept such Shares in payment of the
option price. The Committee may impose such limitations and prohibitions on the
use of Shares to exercise an Option as it deems appropriate.
(e) Issuance of Certificate Upon Exercise of Options; Payment of Cash.
------------------------------------------------------------------
Only whole Shares shall be issuable upon exercise of Options. Any right to a
fractional Share shall be satisfied in cash. Upon satisfaction of the
conditions of Paragraph 10, a certificate for the number of whole Shares and a
check for the Fair Market Value on the date of exercise of any fractional Share
to which the Optionee is entitled shall be delivered to such Optionee by the
Sponsor.
(f) Termination of Employment. For purposes of the Plan, a transfer
-------------------------
of an employee between two employers, each of which is a Company, shall not be
deemed a termination of employment. For purposes of Paragraph 7(g), an
Optionee's termination of employment shall be deemed to occur on the date an
Optionee ceases to serve as an active employee of a Company, as determined by
the Committee in its sole discretion, or, if the Optionee is a party to an
employment agreement with a Company, on the effective date of the Optionee's
termination of employment as determined under such agreement.
(g) Periods of Exercise of Options. An Option shall be exercisable in
------------------------------
whole or in part at such time or times as may be determined by the Committee and
stated in the
-9-
<PAGE>
option document, provided, however, that if the grant of an Option would be
subject to section 16(b) of the 1934 Act, unless the requirements for exemption
therefrom in Rule 16b-3(c)(1), under such Act, or any successor provision, are
met, the option document for such Option shall provide that such Option is not
exercisable until not less than six months have elapsed from the Date of Grant.
Except as otherwise provided by the Committee in its discretion, no Option shall
first become exercisable following an Optionee's termination of employment for
any reason; provided further, that:
(i) In the event that an Optionee terminates employment with the
Company for any reason other than death or Cause, any Option held by such
Optionee and which is then exercisable shall be exercisable for a period of
90 days following the date the Optionee terminates employment with the
Company (unless a longer period is established by the Committee); provided,
however, that if such termination of employment with the Company is due to
the Disability of the Optionee, he shall have the right to exercise those
of his Options which are then exercisable for a period of one year
following such termination of employment (unless a longer period is
established by the Committee); provided, however, that in no event shall an
Incentive Stock Option be exercisable after five years from the Date of
Grant in the case of a grant to a Ten Percent Shareholder, nor shall any
other Option be exercisable after ten years from the Date of Grant.
(ii) In the event that an Optionee terminates employment
with the Company by reason of his death, any Option held at death by such
Optionee which is then exercisable shall be exercisable for a period of one
year from the date of death (unless a longer period is established by the
Committee) by the person to whom the rights of the Optionee shall have
passed by will or by the laws of descent and distribution; provided,
--------
however, that in no event shall an Incentive Stock Option be exercisable
-------
after five years from the Date of Grant in the case of a grant to a Ten
Percent Shareholder, nor shall any other Option be exercisable after ten
years from the Date of Grant.
(iii) In the event that an Optionee's employment with the
Company is terminated for Cause, each unexercised Option held by such
Optionee shall terminate and cease to be exercisable; provided
--------
further, that in such event, in addition to immediate termination of the
-------
Option, the Optionee, upon a determination by the Committee shall
automatically forfeit all Shares otherwise subject to delivery upon
exercise of an Option but for which the Sponsor has not yet delivered the
Share certificates, upon refund by the Sponsor of the option price.
(h) Date of Exercise. The date of exercise of an Option shall be the
----------------
date on which written notice of exercise, addressed to the Sponsor at its main
office to the attention of its Secretary, is hand delivered, telecopied or
mailed first class postage prepaid;
-10-
<PAGE>
provided, however, that the Sponsor shall not be obligated to deliver any
- -----------------
certificates for Shares pursuant to the exercise of an Option until the Optionee
shall have made payment in full of the option price for such Shares. Each such
exercise shall be irrevocable when given. Each notice of exercise must (i)
specify the Incentive Stock Option, Non-Qualified Option or combination thereof
being exercised; and (ii) include a statement of preference (which shall binding
on and irrevocable by the Optionee but shall not be binding on the Committee) as
to the manner in which payment to the Sponsor shall be made (Shares or cash or a
combination of Shares and cash). Each notice of exercise shall also comply with
the requirements of Paragraph 15.
(i) Cash Rights. The Committee may, in its sole discretion, provide
-----------
in an option document for an eligible Optionee that Cash Rights shall be
attached to Non-Qualified Options granted under the Plan. All Cash Rights that
are attached to Non-Qualified Options shall be subject to the following terms:
(i) Such Cash Right shall expire no later than the Non-Qualified
Option to which it is attached.
(ii) Such Cash Right shall provide for the cash payment of such
amount per Share as shall be determined by the Committee and stated in the
option document.
(iii) Such Cash Right shall be subject to the same
restrictions on transferability as the Non-Qualified Option to which it is
attached.
(iv) Such Cash Right shall be exercisable only when such
conditions to exercise as shall be determined by the Committee and stated
in the option document, if any, have been satisfied.
(v) Such Cash Right shall expire upon the exercise of the Non-
Qualified Option to which it is attached.
(vi) Upon exercise of a Cash Right that is attached to a Non-
Qualified Option, the Option to which the Cash Right is attached shall
expire.
8. Option Documents and Terms - Non-Employee Directors
Options granted pursuant to the Plan to Non-Employee Directors shall
be granted, without any further action by the Committee, in accordance with the
terms and conditions set forth in this Paragraph 8. Options granted pursuant to
Paragraph 8(a) shall be evidenced by option documents. The terms of each such
option document shall be consistent with Paragraphs 8(b) through 8(g), as
follows:
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<PAGE>
(a) Grant of Options to Non-Employee Directors. Each Non-Employee
------------------------------------------
Director shall be granted, commencing on the Grant Date next following the
adoption of this Plan by the Board and on each successive Grant Date thereafter,
a Non-Qualified Option to purchase 5,400 Shares. Notwithstanding the preceding
sentence, each newly elected Non-Employee Director:
(i) shall be granted a Non-Qualified Option to purchase 9,000
Shares on the Election Date; and
(ii) shall not be entitled to the grant of an Option hereunder on
the Grant Date immediately following the Non-Employee Director's Election
Date if such Election Date is within ninety (90) days of the Grant Date.
(b) Option Price. The option price per Share with respect to any
------------
Option granted under this Paragraph 8 shall be 100% of the Fair Market Value of
such Share on the Grant Date.
(c) Restrictions on Transferability. No Option granted under this
-------------------------------
Paragraph 8 shall be transferable otherwise than by will or the laws of descent
and distribution and, during the lifetime of the Optionee, shall be exercisable
only by him or for his benefit by his attorney-in-fact or guardian; provided
--------
that the Committee may, in its discretion, at the time of grant of an Option or
- ----
by amendment of an option document for an Option, provide that Options may be
transferred, in whole or in part, to one or more transferees and exercised by
any such transferee; provided further that (i) any such transfer is without
---------------------
consideration, and (ii) each transferee is a member of such Optionee's Immediate
Family. No transfer of an Option shall be effective unless the Committee is
notified of the terms and conditions of the transfer and the Committee
determines that the transfer complies with the requirements for transfers of
Options under the Plan and the option document. Any person to whom an Option
has been transferred may exercise any Options only in accordance with the
provisions of Paragraph 8(f) and this Paragraph 8(c).
(d) Payment Upon Exercise of Options. Full payment for Shares
--------------------------------
purchased upon the exercise of an Option shall be made in cash, by certified
check payable to the order of the Sponsor, or, at the election of the Optionee
and as the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value equal to the aggregate option price,
or by delivering such combination of Shares and cash as the Committee may, in
its sole discretion, approve; provided, however, that Shares may be surrendered
-----------------
in satisfaction of the option price only if the Optionee certifies in writing to
the Sponsor that the Optionee owns a number of Other Available Shares as of the
date the Option is exercised that is at least equal to the number of Shares to
be surrendered in satisfaction of the Option Price; provided further, however,
----------------
that the option price may not be paid in Shares if the Committee determines that
such method of payment would result in liability under section 16(b) of the 1934
Act to an Optionee. Except as otherwise provided by the Committee, if payment
is made in
-12-
<PAGE>
whole or in part in Shares, the Optionee shall deliver to the Sponsor
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having a Fair Market Value on the date of
delivery that is not greater than the option price accompanied by stock powers
duly endorsed in blank by the record holder of the Shares represented by such
certificates. If the Committee, in its sole discretion, should refuse to accept
Shares in payment of the option price, any certificates representing Shares
which were delivered to the Sponsor shall be returned to the Optionee with
notice of the refusal of the Committee to accept such Shares in payment of the
option price. The Committee may impose such limitations and prohibitions on the
use of Shares to exercise an Option as it deems appropriate.
(e) Issuance of Certificate Upon Exercise of Options; Payment of Cash.
----------------------------------------------------------------
Only whole Shares shall be issuable upon exercise of Options granted under this
Paragraph 8. Any right to a fractional Share shall be satisfied in cash. Upon
satisfaction of the conditions of Paragraph 10, a certificate for the number of
whole Shares and a check for the Fair Market Value on the date of exercise of
any fractional Share to which the Optionee is entitled shall be delivered to
such Optionee by the Sponsor.
(f) Periods of Exercise of Options. An Option granted under this
------------------------------
Paragraph 8 shall not be exercisable for six months after the Date of Grant, and
shall then be exercisable in its entirety. No Option shall first become
exercisable following an Optionee's termination of service as a Non-Employee
Director for any reason; provided further, that:
----------------
(i) In the event that an Optionee terminates service as a Non-
Employee Director for any reason other than death or Cause, any Option held
by such Optionee and which is then exercisable shall be exercisable for a
period of 90 days following the date the Optionee terminates service as a
Non-Employee Director; provided, however, that if such termination of
-----------------
employment with the Company is due to the Disability of the Optionee, he
shall have the right to exercise those of his Options which are then
exercisable for a period of one year following the date the Optionee
terminates service as a Non-Employee Director; provided, however, that in
-----------------
no event shall an Option be exercisable after five years from the Grant
Date.
(ii) In the event that an Optionee terminates service as a
Non-Employee Director by reason of his death, any Option held at death by
such Optionee which is then exercisable shall be exercisable for a period
of one year from the date of death by the person to whom the rights of the
Optionee shall have passed by will or by the laws of descent and
distribution; provided, however, that in no event shall an
-----------------
Option be exercisable after five years from the Grant Date.
(iii) In the event that an Optionee's service as a Non-
Employee Director is terminated for Cause, each unexercised Option shall
-13-
<PAGE>
terminate and cease to be exercisable; provided further, that in
----------------
such event, in addition to immediate termination of the Option, the
Optionee shall automatically forfeit all Shares otherwise subject to
delivery upon exercise of an Option but for which the Sponsor has not
yet delivered the Share certificates, upon refund by the Sponsor of
the option price.
(g) Date of Exercise. The date of exercise of an Option granted
----------------
under this Paragraph 8 shall be the date on which written notice of exercise,
addressed to the Sponsor at its main office to the attention of its Secretary,
is hand delivered, telecopied or mailed first class postage prepaid; provided,
---------
however, that the Sponsor shall not be obligated to deliver any certificates for
- -------
Shares pursuant to the exercise of an Option until the Optionee shall have made
payment in full of the option price for such Shares. Each such exercise shall
be irrevocable when given. Each notice of exercise must (i) specify the Option
being exercised; and (ii) include a statement as to the manner in which payment
to the Sponsor shall be made (Shares or cash or a combination of Shares and
cash). Each notice of exercise shall also comply with the requirements of
Paragraph 15.
9. Limitation on Exercise of Incentive Stock Options.
The aggregate Fair Market Value (determined as of the time Options are
granted) of the Shares with respect to which Incentive Stock Options may first
become exercisable by an Optionee in any one calendar year under the Plan and
any other plan of the Company shall not exceed $100,000. The limitations
imposed by this Paragraph 9 shall apply only to Incentive Stock Options granted
under the Plan, and not to any other options or stock appreciation rights. In
the event an individual receives an Option intended to be an Incentive Stock
Option which is subsequently determined to have exceeded the limitation set
forth above, or if an individual receives Options that first become exercisable
in a calendar year (whether pursuant to the terms of an option document,
acceleration of exercisability or other change in the terms and conditions of
exercise or any other reason) that have an aggregate Fair Market Value
(determined as of the time the Options are granted) that exceeds the limitations
set forth above, the Options in excess of the limitation shall be treated as
Non-Qualified Options.
10. Rights as Shareholders
An Optionee shall not have any right as a shareholder with respect to
any Shares subject to his Options until the Option shall have been exercised in
accordance with the terms of the Plan and the option document and the Optionee
shall have paid the full purchase price for the number of Shares in respect of
which the Option was exercised and the Optionee shall have made arrangements
acceptable to the Sponsor for the payment of applicable taxes consistent with
Paragraph 16.
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<PAGE>
11. Changes in Capitalization
(a) Except as provided in Paragraph 11(b), in the event that
Shares are changed into or exchanged for a different number or kind of shares of
stock or other securities of the Sponsor, whether through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split-up or other
substitution of securities of the Sponsor, the Board shall make appropriate
equitable anti-dilution adjustments to the number and class of shares of stock
available for issuance under the Plan, and subject to outstanding Options, and
to the option prices and the amounts payable pursuant to any Cash Rights. Any
reference to the option price in the Plan and in option documents shall be a
reference to the option price as so adjusted. Any reference to the term
"Shares" in the Plan and in option documents shall be a reference to the
appropriate number and class of shares of stock available for issuance under the
Plan, as adjusted pursuant to this Paragraph 11. The Board's adjustment shall
be effective and binding for all purposes of this Plan.
(b) Paragraph 11(a) shall not apply to the number of Shares that
become subject to the grant of Options under Paragraph 8(a). Paragraph 11(a)
shall apply for the purpose of making appropriate equitable anti-dilution
adjustments to Options granted pursuant to Paragraph 8(a) before the effective
date of the relevant event giving rise to the adjustment under Paragraph 11(a).
12. Terminating Events
(a) The Sponsor shall give Optionees at least thirty (30) days' notice
(or, if not practicable, such shorter notice as may be reasonably practicable)
prior to the anticipated date of the consummation of a Terminating Event. Upon
receipt of such notice, and for a period of ten (10) days thereafter (or such
shorter period as the Board shall reasonably determine and so notify the
Optionees), each Optionee shall be permitted to exercise the Option to the
extent the Option are then exercisable; provided that, the Sponsor may, by
-------------
similar notice, require the Optionee to exercise the Option, to the extent the
Option is then exercisable, or to forfeit the Option (or portion thereof, as
applicable). The Committee may, in its discretion, provide that upon the
Optionee's receipt of the notice of a Terminating Event under this Paragraph
12(a), the entire number of Shares covered by Options shall become immediately
exercisable. Upon the close of the period described in this Paragraph 12(a)
during which an Option may be exercised in connection with a Terminating Event,
such Option (including such portion thereof that is not exercisable) shall
terminate to the extent that such Option have not theretofore been exercised.
(b) Notwithstanding Paragraph 12(a), in the event the Terminating
Event is not consummated, the Option shall be deemed not to have been exercised
and shall be exercisable thereafter to the extent it would have been exercisable
if no such notice had been given.
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<PAGE>
13. Interpretation
The Committee shall have the power to interpret the Plan and to make
and amend rules for putting it into effect and administering it. It is intended
that the Incentive Stock Options granted under the Plan shall constitute
incentive stock options within the meaning of section 422 of the Code, and that
Shares transferred pursuant to the exercise of Non-Qualified Options shall
constitute property subject to federal income tax pursuant to the provisions of
section 83 of the Code. The provisions of the Plan shall be interpreted and
applied insofar as possible to carry out such intent.
14. Amendments
The Board or the Committee may amend the Plan from time to time in
such manner as it may deem advisable. Nevertheless, neither the Board nor the
Committee may, without obtaining approval within twelve months before or after
such action by such vote of shareholders as may be required by Pennsylvania law
for any action requiring shareholder approval, or by a majority of votes cast at
a duly held shareholders' meeting at which a majority of all voting stock is
present and voting on such amendment, either in person or in proxy (but not, in
any event, less than the vote required pursuant to Rule 16b-3(b) under the 1934
Act) change the class of individuals eligible to receive an Incentive Stock
Option, extend the expiration date of the Plan, decrease the minimum option
price of an Incentive Stock Option granted under the Plan or increase the
maximum number of shares as to which Options may be granted, except as provided
in Paragraph 11 hereof. In addition, the provisions of Paragraph 8 that
determine (i) which directors shall be granted Options; (ii) the number of
Shares subject to Options; (iii) the option price of Shares subject to Options;
and (iv) the timing of grants of Options shall not be amended more than once
every six months, other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended, if applicable. No
outstanding Option shall be affected by any such amendment without the written
consent of the Optionee or other person then entitled to exercise such Option.
15. Securities Law
(a) In General. The Committee shall have the power to make each
----------
grant under the Plan subject to such conditions as it deems necessary or
appropriate to comply with the then-existing requirements of the 1933 Act or the
1934 Act, including Rule 16b-3 (or any similar rule) of the Securities and
Exchange Commission.
(b) Acknowledgment of Securities Law Restrictions on Exercise. To
---------------------------------------------------------
the extent required by the Committee, unless the Shares subject to the Option
are covered by a then current registration statement or a Notification under
Regulation A under the 1933 Act, each notice of exercise of an Option shall
contain the Optionee's acknowledgment in form and substance satisfactory to the
Committee that:
-16-
<PAGE>
(i) the Shares subject to the Option are being purchased for
investment and not for distribution or resale (other than a distribution or
resale which, in the opinion of counsel satisfactory to the Sponsor, may be
made without violating the registration provisions of the Act);
(ii) the Optionee has been advised and understands that (A)
the Shares subject to the Option have not been registered under the 1933
Act and are "restricted securities" within the meaning of Rule 144 under
the 1933 Act and are subject to restrictions on transfer and (B) the
Sponsor is under no obligation to register the Shares subject to the Option
under the 1933 Act or to take any action which would make available to the
Optionee any exemption from such registration;
(iii) the certificate evidencing the Shares may bear a
restrictive legend; and
(iv) the Shares subject to the Option may not be transferred
without compliance with all applicable federal and state securities laws.
(c) Delay of Exercise Pending Registration of Securities.
----------------------------------------------------
Notwithstanding any provision in the Plan or an option document to the contrary,
if the Committee determines, in its sole discretion, that issuance of Shares
pursuant to the exercise of an Option should be delayed pending registration or
qualification under federal or state securities laws or the receipt of a legal
opinion that an appropriate exemption from the application of federal or state
securities laws is available, the Committee may defer exercise of any Option
until such Shares are appropriately registered or qualified or an appropriate
legal opinion has been received, as applicable.
16. Withholding of Taxes on Exercise of Option
(a) Whenever the Company proposes or is required to deliver or
transfer Shares in connection with the exercise of an Option, the Company shall
have the right to (i) require the recipient to remit to the Sponsor an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the delivery or transfer of any certificate or certificates for such
Shares or (ii) take any action whatever that it deems necessary to protect its
interests with respect to tax liabilities. The Sponsor's obligation to make any
delivery or transfer of Shares on the exercise of an Option shall be conditioned
on the recipient's compliance, to the Sponsor's satisfaction, with any
withholding requirement. In addition, if the Committee grants Options or amends
option documents to permit Options to be transferred during the life of the
Optionee, the Committee may include in such option documents such provisions as
it determines are necessary or appropriate to permit the Company to deduct
compensation expenses recognized upon exercise of such Options for federal or
state income tax purposes.
-17-
<PAGE>
(b) Except as otherwise provided in this Paragraph 16(b), any tax
liabilities incurred in connection with the exercise of an Option under the Plan
other than an Incentive Stock Option shall be satisfied by the Sponsor's
withholding a portion of the Shares underlying the Option exercised having a
Fair Market Value approximately equal to the minimum amount of taxes required to
be withheld by the Sponsor under applicable law, unless otherwise determined by
the Committee with respect to any Optionee. Notwithstanding the foregoing, the
Committee may permit an Optionee to elect one or both of the following: (i) to
have taxes withheld in excess of the minimum amount required to be withheld by
the Sponsor under applicable law; provided that the Optionee certifies in
writing to the Sponsor that the Optionee owns a number of Other Available Shares
having a Fair Market Value that is at least equal to the Fair Market Value of
Option Shares to be withheld by the Company for the then-current exercise on
account of withheld taxes in excess of such minimum amount, and (ii) to pay to
the Sponsor in cash all or a portion of the taxes to be withheld upon the
exercise of an Option. In all cases, the Shares so withheld by the Company shall
have a Fair Market Value that does not exceed the amount of taxes to be withheld
minus the cash payment, if any, made by the Optionee. Any election pursuant to
this Paragraph 16(b) must be in writing made prior to the date specified by the
Committee, and in any event prior to the date the amount of tax to be withheld
or paid is determined. An election pursuant to this Paragraph 16(b) may be made
only by an Optionee or, in the event of the Optionee's death, by the Optionee's
legal representative. No Shares withheld pursuant to this Paragraph 16(b) shall
be available for subsequent grants under the Plan. The Committee may add such
other requirements and limitations regarding elections pursuant to this
Paragraph 16(b) as it deems appropriate.
17. Effective Date and Term of Plan
This amendment and restatement of the Plan is effective as of March 3,
1999, provided that subject to the approval of the Sponsor's shareholders, the
increase in the maximum number of Shares for which Options may be granted to any
single individual in any calendar year to 5,000,000, as provided in Paragraph
3(b), is effective as of June 16, 1998. The Plan shall expire no later than the
tenth anniversary of the date the Plan was initially adopted by the Board,
unless sooner terminated by the Board.
18. General
Each Option shall be evidenced by a written instrument containing such
terms and conditions not inconsistent with the Plan as the Committee may
determine. The issuance of Shares on the exercise of an Option shall be subject
to all of the applicable requirements of the corporation law of the Sponsor's
state of incorporation and other applicable laws, including
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<PAGE>
federal or state securities laws, and all Shares issued under the Plan shall be
subject to the terms and restrictions contained in the Articles of Incorporation
and By-Laws of the Sponsor, as amended from time to time.
Executed as of the 3rd day of March, 1999.
COMCAST CORPORATION
By:
-----------------------------------
Attest: ----------------------------
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<PAGE>
APPENDIX 2
- ----------
COMCAST CORPORATION
1996 EXECUTIVE CASH BONUS PLAN
(as amended December 15, 1998)
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.
"Participant" shall mean those persons eligible to participate in the
Plan in accordance with Section 3.
<PAGE>
"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) the Target Percentage 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
$3,000,000.
"Target Percentage" shall mean, with respect to any Participant for
any Plan Year, a percentage, not to exceed 150%, established by the Committee
with respect to such Participant and such Plan Year. If no other percentage is
selected by the Committee, the Target Percentage shall be 50%.
3. PARTICIPATION
-------------
The Participants in the Plan shall be 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, 2003 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
-2-
<PAGE>
to each Participant as soon as practicable following the close of the Plan Year
with respect to which the bonus is to be paid. Notwithstanding anything
contained herein to the 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. AMOUNT OF PERFORMANCE-BASED COMPENSATION 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 the
levels of Cash Flow represented by the Second Tier Goal and the First Tier Goal.
If the level of Cash Flow for a Plan Year is below the First Tier Goal
established with respect to such Plan Year, no bonus shall be 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.
-3-
<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 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 rely solely upon the unsecured promise of the Company,
as set forth herein, for the payment thereof, and nothing herein contained shall
be construed to give to or vest in a Participant or any other person now or at
any time in the future, any right, title, interest, or claim in or to any
specific asset, fund, reserve, account, insurance or annuity policy or contract,
or other property of any kind whatever owned by the Company, or in which the
Company may have any right, title, or interest, nor or at any time in the
future.
(b) Other Company Plans. It is agreed and understood that any
-------------------
benefits under this Plan are in addition to any and all benefits to which a
Participant may otherwise be entitled under any other contract, arrangement, or
voluntary pension, profit sharing
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<PAGE>
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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