<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 25, 2000.
REGISTRATION NO. 333-85745
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
COMCAST CORPORATION
(Exact name of Registrant as specified in its Charter)
<TABLE>
<S> <C> <C>
PENNSYLVANIA 4841 23-1709202
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
------------------------------
1500 MARKET STREET, PHILADELPHIA, PENNSYLVANIA 19102-2148, TELEPHONE: (215)
665-1700
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
------------------------------
JOHN R. ALCHIN
SENIOR VICE PRESIDENT AND TREASURER
COMCAST CORPORATION
1500 MARKET STREET, PHILADELPHIA, PENNSYLVANIA 19102-2148,
TELEPHONE: (215) 665-1700
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Agent for Service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
PETER D. CRIPPS, ESQ. BRUCE K. DALLAS, ESQ.
DECHERT PRICE & RHOADS DAVIS POLK & WARDWELL
4000 BELL ATLANTIC TOWER 450 LEXINGTON AVENUE
1717 ARCH STREET NEW YORK, NEW YORK 10017
PHILADELPHIA, PENNSYLVANIA 19103-2793 (212) 450-4000
(215) 994-4000
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement and all
other conditions to the transactions described herein have been satisfied or
waived.
If any of the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT PRICE (2) REGISTRATION FEE(3)
<S> <C> <C> <C> <C>
Class A Special Common Stock, par value
$1.00 per share........................... 58,900,333 N/A $2,311,276,023 $620,877
</TABLE>
(1) Represents the maximum number of shares of Class A Special Common Stock
issuable upon consummation of the merger of Jones Intercable, Inc. into
Comcast JOIN Holdings, Inc., a wholly owned subsidiary of Comcast
Corporation, as described in the proxy statement/prospectus filed as part of
this Registration Statement.
(2) The initial filing of the Registration Statement on August 20, 1999, related
to 23,182,599 shares of Comcast Class A Special Common Stock to be issued to
holders of shares of Jones Intercable, Inc. Amendment No. 1 to the
Registration Statement related to an additional 35,717,734 shares of Comcast
Class A Special Common Stock which will be issuable upon completion of the
merger. The proposed maximum offering price for the purposes of calculating
the registration fee for the initial 23,182,599 shares of Comcast Class A
Special Common Stock was calculated in accordance with Rule 457(f)(1) under
the Securities Act of 1933, as amended, based upon the average high and low
per share prices quoted on the Nasdaq National Market System on August 16,
1999 for 1,161,135 shares of Jones Intercable Common Stock and 15,397,864
shares of Jones Intercable Class A Common Stock. Pursuant to Rules 457(a)
and 457(f)(1) the proposed maximum offering price for the additional
35,717,734 shares of Comcast Class A Special Common Stock is estimated
solely for purposes of calculating the registration fee and computed
pursuant to Rule 457(f)(1) based on the average of the high and low per
share prices quoted on the Nasdaq National Market System on January 5, 2000
for an additional 3,951,886 shares of Jones Intercable Common Stock and
21,560,781 shares of Jones Intercable Class A Common Stock to be acquired in
the merger. This amount assumes the exercise of all existing options for
Jones Intercable shares.
(3) $212,439 of registration fee was paid on August 20, 1999 in connection with
the original filing of the Registration Statement and the remainder was paid
on January 10, 2000 in connection with the filing of Amendment No. 1 to the
Registration Statement.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
JONES INTERCABLE, INC.
C/O COMCAST CORPORATION
1500 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19102-2148
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 2, 2000
To the Shareholders:
Notice is hereby given that a special meeting of shareholders of Jones
Intercable, Inc. will be held at 1500 Market Street, Philadelphia PA 19102 on
March 2, 2000, at 10:00 a.m., Eastern time, for the following purposes:
1. To consider and act upon a proposal to approve a merger and merger
agreement among Jones Intercable, Inc., Comcast Corporation and Comcast JOIN
Holdings, Inc. a wholly owned subsidiary of Comcast Corporation. If the
conditions to the merger are satisfied or waived and the merger is completed,
each outstanding share of Jones Intercable Common Stock and Class A Common Stock
will be converted into the right to receive 1.4 shares of Comcast Class A
Special Common Stock.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Information relating to the above matters is set forth in the accompanying
proxy statement/ prospectus. A copy of the merger agreement is set forth as
Appendix A to the proxy statement/ prospectus and is incorporated herein by
reference.
The close of business on January 24, 2000 has been fixed as the record date
for determination of the shareholders entitled to notice of and to vote at the
meeting or any adjournment thereof. Approval of the merger and the merger
agreement requires the affirmative vote of:
- the holders of two-thirds of the outstanding shares of Common Stock
voting as a single class,
- the holders of two-thirds of the outstanding shares of Class A Common
Stock voting as a single class, and
- the holders of a majority of the shares of Jones Intercable Common
Stock and Class A Common Stock that are not beneficially owned by
Comcast or its affiliates voting together as a single class with each
share of Common Stock and Class A Common Stock being entitled to one
vote for the purposes of this approval.
Comcast intends to vote its shares of Jones Intercable Common Stock and
Class A Common Stock for approval of the merger and the merger agreement.
Shareholders may vote in person or by proxy. The proxy statement, which
explains in detail the merger and the merger agreement, and the accompanying
proxy card are included with this notice. Only holders of record of Jones
Intercable shares at the close of business on January 24, 2000 will be entitled
to vote at the meeting or any adjournment thereof with respect to all matters
described above. Please sign, date and mail the enclosed proxy promptly using
the enclosed postage-paid envelope. This action will not limit your right to
vote in person if you wish to attend the special meeting.
A special committee of the independent members of your Board of Directors
has unanimously approved and adopted the merger and the merger agreement. After
receiving the recommendation of the special committee, your Board of Directors
unanimously approved and adopted the merger and the merger agreement. The
special committee and your Board of Directors each recommends that you vote in
favor of the proposed merger.
<PAGE>
THE MERGER IS AN IMPORTANT DECISION FOR JONES INTERCABLE AND ITS
SHAREHOLDERS. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, WE URGE YOU
TO COMPLETE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD TO ENSURE THAT
YOUR SHARES WILL BE VOTED AT THE MEETING.
PLEASE DO NOT SEND ANY CERTIFICATES FOR JONES INTERCABLE SHARES AT THIS
TIME.
By Order of the Board of
Directors,
Stanley L. Wang
Secretary
January 25, 2000
Should you have any questions regarding the special meeting or the attached
proxy statement/ prospectus, please contact our proxy solicitor, D.F. King &
Co., at 77 Water Street, New York, NY 10005. D.F. King's telephone number for
banks and brokers is (212) 269-5550 (call collect) and for all others is
(800) 207-3156.
2
<PAGE>
PROXY STATEMENT
OF
JONES INTERCABLE, INC.
--------------
PROSPECTUS
OF
COMCAST CORPORATION
This proxy statement/prospectus is being furnished to holders of Common
Stock and Class A Common Stock of Jones Intercable, Inc. in connection with the
solicitation of proxies by the Board of Directors of Jones Intercable for use at
a special meeting of holders of Jones Intercable common stock to be held at
10:00 a.m., Eastern time, on March 2, 2000, at 1500 Market Street, Philadelphia,
PA 19102 and at any adjournments of the special meeting. Jones Intercable is
convening the special meeting to consider and act upon a proposal to approve the
merger of Jones Intercable with Comcast JOIN Holdings, Inc., a wholly owned
subsidiary of Comcast Corporation and the related merger agreement.
This proxy statement/prospectus is also a prospectus of Comcast relating to
shares of its Class A Special Common Stock to be issued to shareholders of Jones
Intercable under the terms of the merger. At the time of the merger, each
outstanding share of Jones Intercable Common Stock and Class A Common Stock not
directly owned by Comcast or Comcast JOIN Holdings (or owned by Jones Intercable
as treasury stock) will cease to be outstanding and will be converted into the
right to receive 1.4 shares of Comcast Class A Special Common Stock. All Jones
Intercable shares currently owned by Comcast are held indirectly by Comcast
through a wholly owned subsidiary and therefore will be converted into shares of
Comcast Class A Special Common Stock in the merger. Jones Intercable shares
owned directly by Comcast or Comcast JOIN Holdings or owned by Jones Intercable
as treasury stock will be canceled in the merger and no payment or distribution
shall be made with respect to those shares. After the merger Jones Intercable
will no longer exist and its successor by merger, Comcast JOIN Holdings, will be
a wholly owned subsidiary of Comcast.
We expect that the merger will take effect after approval by the
shareholders of Jones Intercable at the special meeting and after the other
conditions to the merger have been satisfied. We anticipate that the merger will
close during the first or second quarter of 2000.
INFORMATION ON COMCAST CLASS A SPECIAL COMMON STOCK
Holders of Comcast Class A Special Common Stock are not entitled to vote in
the election of directors or otherwise, except where class voting is required by
applicable law.
Comcast Class A Special Common Stock is listed on the Nasdaq National Market
under the symbol "CMCSK." On December 21, 1999, the last trading day immediately
preceding the public announcement of the proposed merger, and on January 24,
2000, the most recent practicable date prior to the mailing of this proxy
statement/prospectus, the closing prices for the Comcast Class A Special Common
Stock were $51 per share and $51.69 per share, respectively.
SEE "RISK FACTORS" BEGINNING ON PAGE 16 FOR A DISCUSSION OF IMPORTANT RISKS
THAT SHOULD BE CONSIDERED BY SHAREHOLDERS IN CONNECTION WITH THE MERGER AND THE
ACQUISITION OF COMCAST CLASS A SPECIAL COMMON STOCK OFFERED BY THIS PROXY
STATEMENT/PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SHARES OF COMCAST CLASS A SPECIAL
COMMON STOCK TO BE ISSUED IN THE MERGER, OR DETERMINED IF THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this proxy statement/prospectus is January 25, 2000. It is first
being mailed or otherwise delivered to Jones Intercable shareholders on or about
January 27, 2000.
<PAGE>
ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and
financial information about Comcast and Jones Intercable that is not included in
or delivered with this document. This information is available without charge to
shareholders of either company upon written or oral request. Shareholders may
obtain information about Comcast or Jones Intercable upon request to the
appropriate company at the following address or telephone number:
<TABLE>
<S> <C>
Marlene S. Dooner Kelley Claypool
Senior Director, Investor Relations Senior Analyst, Investor Relations
Comcast Corporation Jones Intercable, Inc.
1500 Market Street c/o Comcast Corporation
Philadelphia, Pennsylvania 19102-2148 1500 Market Street
Comcast Investor Relations Hotline: Philadelphia, Pennsylvania 19102-2148
(215) 655-8199 Jones Investor Relations Hotline:
(215) 655-8198
</TABLE>
IF YOU WOULD LIKE TO REQUEST DOCUMENTS FROM US, PLEASE DO SO BY
FEBRUARY 24, 2000 TO ENSURE TIMELY DELIVERY.
------------------------
In this proxy statement/prospectus, "Comcast" refers to Comcast Corporation
and its subsidiaries and "Jones Intercable" refers to Jones Intercable, Inc. and
its subsidiaries. The terms "we," "us" and "our" refer collectively to Comcast
and Jones Intercable and their respective subsidiaries.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... 1
SUMMARY..................................................... 3
The Companies............................................. 3
The Merger................................................ 4
Summary Selected Historical Consolidated Financial Data of
Comcast................................................. 10
Summary Selected Historical Consolidated Financial Data of
Jones Intercable........................................ 13
Comparative Per Share Data................................ 15
RISK FACTORS................................................ 16
Risks Relating to Comcast................................. 16
Risks Relating to the Merger.............................. 18
Special Note Regarding Forward-Looking Statements......... 19
THE MERGER.................................................. 20
The Companies............................................. 20
Background of the Merger.................................. 21
Jones Intercable's Reasons for the Merger................. 28
Recommendation of the Special Committee and the Jones
Intercable Board of Directors........................... 31
Comcast's Reasons for the Merger.......................... 31
Fairness Opinion of Financial Advisor..................... 32
Consequences of the Merger................................ 37
Listing of Comcast Class A Special Common Stock........... 38
No Dissenters' Rights..................................... 38
Accounting Treatment...................................... 38
Material U.S. Federal Income Tax Consequences of the
Merger.................................................. 38
Regulatory Matters; Litigation............................ 39
Plans for Jones Intercable After the Merger............... 41
Conduct of the Business of Comcast and Jones Intercable if
the Merger Is Not Consummated........................... 41
Federal Securities Laws Consequences...................... 41
Comparative Per Share Market Price and Dividend
Information............................................. 42
Interests of Certain Persons in the Merger................ 42
Material Contracts Between Comcast and Jones Intercable... 43
Security Ownership of Certain Beneficial Owners and
Management.............................................. 44
Management of Jones Intercable and the Surviving
Corporation............................................. 46
THE MERGER AGREEMENT........................................ 46
Material Provisions of the Merger Agreement............... 46
Structure of the Merger................................... 46
Merger Consideration...................................... 46
Effective Time............................................ 46
Exchange and Payment Procedures........................... 46
Transfer of Jones Intercable Common Shares................ 47
Treatment of Jones Intercable Stock Options............... 47
No Dissenters' Rights..................................... 47
Principal Covenants....................................... 48
Interim Operations........................................ 48
Registration Statement.................................... 48
Covenant to Recommend..................................... 48
Meeting of Jones Intercable Shareholders.................. 48
Access to Information..................................... 48
Notification of Certain Matters........................... 49
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Commercially Reasonable Efforts........................... 49
Shareholder Litigation.................................... 49
Public Announcements...................................... 49
Affiliates................................................ 49
Representations and Warranties............................ 49
Conditions to the Completion of the Merger................ 51
Indemnification and Insurance of Jones Intercable
Directors and Officers.................................. 53
Termination of the Merger Agreement....................... 53
Termination Fees Payable by Jones Intercable.............. 54
Amendment and Waiver...................................... 55
General Provisions........................................ 55
THE MEETING AND VOTING...................................... 55
Matters Relating to the Meeting........................... 55
Vote Necessary to Approve Merger Proposal................. 56
Recommendation of the Special Committee and Board of
Directors of Jones Intercable........................... 57
Proxies................................................... 57
Voting In Person.......................................... 57
People With Disabilities.................................. 58
401(k) Plan Participants.................................. 58
Solicitation of Proxies................................... 58
Adjournments.............................................. 58
DESCRIPTION OF COMCAST CAPITAL STOCK........................ 59
Common Stock.............................................. 59
Preferred Stock........................................... 60
DESCRIPTION OF JONES INTERCABLE CAPITAL STOCK............... 60
COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF COMCAST AND
JONES INTERCABLE............................................ 61
Fiduciary Duties of Directors............................. 61
Limitation of Director Liability.......................... 62
Indemnification........................................... 62
Business Combinations..................................... 63
Anti-takeover Protection.................................. 64
Voting Rights............................................. 65
Amendments to the Articles of Incorporation............... 66
Dividends and Repurchases of Shares....................... 68
Dissenters' Rights........................................ 69
Special Treatment......................................... 70
Amendments to Bylaws...................................... 70
Action By Written Consent................................. 70
Special Meeting of Shareholders........................... 71
Annual Meeting of Shareholders............................ 71
Business Conducted at Meeting of Comcast Shareholders..... 71
Preemptive Rights......................................... 72
Size of the Board of Directors............................ 72
Classification of the Board of Directors.................. 72
Vacancies on the Board.................................... 73
Removal of Directors...................................... 73
Interested Director Transactions.......................... 74
Shareholder Records....................................... 75
Shareholder Derivative Suits.............................. 75
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Dissolution............................................... 75
LEGAL MATTERS............................................... 76
EXPERTS..................................................... 76
FUTURE SHAREHOLDER PROPOSALS................................ 76
WHERE YOU CAN FIND MORE INFORMATION......................... 76
INCORPORATION BY REFERENCE.................................. 77
APPENDICES
Appendix A: Agreement and Plan of Merger.................. A-1
Appendix B: Opinion of Donaldson, Lufkin & Jenrette
Securities Corporation.................................. B-1
</TABLE>
iii
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: When and where is the shareholder meeting?
A: The meeting will take place on March 2, 2000 at 10:00 a.m., Eastern time
at 1500 Market Street, Philadelphia, PA 19102.
Q: What will I receive in the merger?
A: Holders of Jones Intercable shares, other than shares directly owned by
Comcast or Comcast JOIN Holdings (or owned by Jones Intercable as treasury
stock), will receive, for each share of Jones Intercable Common Stock and
Class A Common Stock, 1.4 shares of Comcast Class A Special Common Stock.
Q: Why is the Board of Directors of Jones Intercable recommending that I
vote for the merger?
A: A special committee comprised of the independent directors of the Jones
Intercable Board of Directors has unanimously:
- determined that the merger is fair to and in the best interests of the
public shareholders of Jones Intercable without regard to Comcast's
interests,
- approved and adopted the merger and the merger agreement, and
- recommended that the Jones Intercable Board of Directors and the
shareholders of Jones Intercable approve and adopt the merger and the
merger agreement.
After receiving the unanimous recommendation of the special committee, the
Jones Intercable Board of Directors determined that the approval and adoption of
the merger and the merger agreement is in the best interests of Jones
Intercable's shareholders. The Jones Intercable Board of Directors unanimously
approved and adopted the merger and the merger agreement and recommends that you
approve the merger and the merger agreement. To review the background and
reasons for the merger in greater detail, see the sections entitled "The
Merger--Background of the Merger" and "The Merger--Jones Intercable's Reasons
for the Merger." The special committee was advised by Donaldson, Lufkin &
Jenrette Securities Corporation, which delivered a fairness opinion in
connection with the merger. For a more detailed description of the fairness
opinion, see the section entitled "The Merger--Fairness Opinion of Financial
Advisor."
Q: What happened to the Comcast exchange offer?
A: A special committee of the independent directors of Jones Intercable
considered Comcast's exchange offer and proposed the merger to Comcast as a
transaction that would offer advantages to the Jones Intercable shareholders
over the exchange offer. The merger has replaced Comcast's previously announced
exchange offer.
Q: What vote is required for the merger to occur?
A: Approval of the merger requires the affirmative vote of:
- the holders of two-thirds of the outstanding shares of Jones Intercable
Common Stock voting as a single class,
- the holders of two-thirds of the outstanding shares of Jones Intercable
Class A Common Stock voting as a single class, and
- the holders of a majority of the outstanding shares of Jones Intercable
Common Stock and Class A Common Stock that are not beneficially owned by
Comcast or its affiliates voting together as a single class with each
share being entitled to one vote for the purpose of this approval.
1
<PAGE>
Q: What will happen to the Jones Intercable shares as a result of the
merger?
A: As of the date of this proxy statement/prospectus, Comcast, through a
wholly owned subsidiary, indirectly owned 2,878,151 shares of Jones Intercable
Common Stock and 13,782,500 shares of Jones Intercable Class A Common Stock
representing approximately 56.3% and 37.3% of each respective class. Comcast is
seeking to acquire the remaining shares of Jones Intercable stock that it does
not already own through the merger. As a result of the merger, Jones Intercable
will merge with and into Comcast JOIN Holdings with Comcast JOIN Holdings being
the surviving corporation of the merger. All Jones Intercable shares, other than
shares directly held by Comcast or Comcast JOIN Holdings (or shares held by
Jones Intercable as treasury stock) will be converted into the right to receive
1.4 shares of Comcast Class A Special Common Stock. All Jones Intercable shares
currently owned by Comcast are held indirectly by Comcast through a wholly owned
subsidiary and therefore will be converted into shares of Comcast Class A
Special Common Stock in the merger. After completion of the merger, Jones
Intercable will no longer exist and its successor by merger, Comcast JOIN
Holdings, will be a wholly owned subsidiary of Comcast.
Q: Will shareholders have dissenters' rights?
A: No. Jones Intercable shareholders will not have any dissenters' rights or
other rights to demand fair value in cash as a result of the merger under
Colorado law.
Q: What do I need to do now if I decide to vote yes?
A: After carefully reading and considering the information contained in this
document, please fill out, sign and mail your signed proxy card in the enclosed
return envelope as soon as possible, so that your shares may be represented at
the special meeting.
Q: Should I send in my share certificates now if I decide to vote in favor
of the merger?
A: No. After the merger is completed, we will send you written instructions
for exchanging your share certificates.
Q: If my shares are held in street name by my broker, will my broker vote my
shares for me?
A: Your broker will vote your shares only if you provide instructions on how
to vote. You should follow the directions provided by your broker regarding how
to instruct your broker to vote your shares.
Q: May I change my vote after I have mailed my signed proxy card?
A: Yes. Just deliver a later dated, signed proxy card to Jones Intercable
before the special meeting or attend the special meeting and vote.
Q: When do you expect the merger to be completed if approved?
A: We are working toward completing the merger as quickly as possible. We
expect that the merger will become effective after approval by the shareholders
of Jones Intercable at the special meeting and after the other conditions to the
merger have been satisfied. We currently believe that the merger will be
completed in the first or second quarter of 2000.
Q: What are the tax consequences of the merger?
A: The merger generally will not be taxable to you for federal income tax
purposes. However, you will be taxed on any cash that you receive in lieu of
fractional shares of Comcast Class A Special Common Stock. To review in greater
detail the tax consequences to shareholders, see the section entitled "The
Merger--Material U.S. Federal Income Tax Consequences of the Merger."
Q: What other matters will be voted on at the special meeting?
A: We do not expect to ask you to vote on any other matters at the special
meeting.
2
<PAGE>
SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND MAY NOT
CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND THE MERGER
AND FOR A MORE COMPLETE DESCRIPTION OF THE LEGAL TERMS OF THE MERGER, YOU SHOULD
CAREFULLY READ THIS ENTIRE DOCUMENT AND THE OTHER DOCUMENTS TO WHICH WE HAVE
REFERRED YOU. SEE "WHERE YOU CAN FIND MORE INFORMATION" AND "INCORPORATION BY
REFERENCE."
THE COMPANIES
COMCAST CORPORATION
1500 Market Street
Philadelphia, PA 19102-2148
(215) 665-1700
Comcast is a Pennsylvania corporation that was organized in 1969. Comcast is
principally engaged both in developing, managing and operating hybrid
fiber-coaxial broadband cable communications networks and in providing
programming content, primarily through QVC, Inc., its electronic retailing
subsidiary. Comcast is currently the third-largest cable communications system
operator in the United States and is in the process of implementing digital
video applications and high-speed Internet access service to enhance the
products available on its cable networks.
Comcast's consolidated cable operations served approximately 5.7 million
subscribers and passed approximately 9.4 million homes in the United States as
of September 30, 1999. On January 18, 2000, Comcast, through a wholly owned
subsidiary, acquired Lenfest Communications, Inc., a cable communications
company serving approximately 1.25 million subscribers, from AT&T Corp. and the
other Lenfest shareholders in a merger. In connection with this acquisition,
Comcast issued approximately 121.4 million shares of its Class A Special Common
Stock and assumed approximately $1.346 billion of Lenfest debt. Comcast has
entered into a series of transactions whereby it will acquire, subject to
receipt of necessary regulatory and other approvals, approximately 1.25 million
cable subscribers in a series of transactions over the next twelve to eighteen
months. Upon completion of these pending transactions, Comcast will serve
approximately 8.2 million subscribers.
Comcast provides programming content through its majority-owned
subsidiaries, QVC and E! Entertainment Television, Inc., and through other
programming investments, including Comcast SportsNet, The Golf Channel,
Speedvision and Outdoor Life. Through QVC, Comcast markets a wide variety of
products directly to consumers primarily on merchandise-focused television
programs. As of September 30, 1999, QVC was available, on a full and part-time
basis, to over 73.6 million homes in the United States, over 7.7 million homes
in the United Kingdom and Ireland and over 15.0 million homes in Germany.
Comcast has a world wide web site at http://www.comcast.com. The information
posted on Comcast's web site is not incorporated into this proxy
statement/prospectus.
COMCAST JOIN HOLDINGS, INC.
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
(215) 665-1700
Comcast JOIN Holdings, Inc. is a Delaware corporation and wholly owned
subsidiary of Comcast formed by Comcast in December 1999 solely for the purpose
of merging with Jones Intercable.
JONES INTERCABLE, INC.
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
(215) 665-1700
3
<PAGE>
Jones Intercable, Inc. is a Colorado corporation organized in 1970. It is
principally engaged in developing, managing and operating hybrid fiber-coaxial
broadband cable communications networks serving more than 1.0 million customers
as of September 30, 1999. Jones Intercable is currently a consolidated public
company subsidiary of Comcast Cable Communications, Inc., and an indirect
consolidated subsidiary of Comcast Corporation.
Jones Intercable has a world wide web site at http://www.jic.com. The
information posted on the web site is not incorporated into this proxy
statement/prospectus.
THE MERGER
At the effective time of the merger, Jones Intercable will merge with and
into Comcast JOIN Holdings, with Comcast JOIN Holdings continuing as the
surviving corporation of the merger. Upon completion of the merger, Jones
Intercable will no longer exist and its successor by merger, Comcast JOIN
Holdings, will be a wholly owned subsidiary of Comcast. The merger agreement is
attached as Appendix A to this document. We encourage you to read the merger
agreement as it is the legal document that governs the merger.
THE MERGER CONSIDERATION
If the merger is completed, each share of Jones Intercable Common Stock and
Class A Common Stock issued and outstanding immediately prior to the effective
time of the merger (other than Jones Intercable shares directly owned by Comcast
or Comcast JOIN Holdings and other than Jones Intercable shares held by Jones
Intercable as treasury stock) shall be cancelled and shall be converted
automatically into the right to receive 1.4 shares of Comcast Class A Special
Common Stock, par value $1.00 per share of Comcast. All Jones Intercable shares
currently owned by Comcast are held indirectly by Comcast through a wholly owned
subsidiary and therefore will be converted into shares of Comcast Class A
Special Common Stock in the merger.
Each share of Jones Intercable Common Stock and Class A Common Stock issued
and outstanding immediately prior to the effective time of the merger directly
owned by Comcast or Comcast JOIN Holdings, and each share that is owned by Jones
Intercable as treasury stock will be canceled in the merger and no payment or
distribution shall be made with respect to those shares.
The exchange ratio of 1.4 shares of Comcast Class A Special Common Stock to
one Jones Intercable share shall be adjusted to reflect fully the effect of any
stock split, reverse stock split, stock dividend, recapitalization or other like
change without receipt of consideration with respect to either the Jones
Intercable shares or the shares of Comcast Class A Special Common Stock
occurring on or after the date of the merger agreement and prior to the
effective time of the merger.
NO FRACTIONAL SHARES
Comcast will not issue any fractional shares of its Class A Special Common
Stock in the merger. Holders of Jones Intercable shares will receive cash for
any fractional shares in an amount based on the market value of Comcast Class A
Special Common Stock on the last full trading day prior to the merger.
SHAREHOLDER VOTE REQUIRED
Approval of the merger requires the affirmative vote of:
- the holders of two-thirds of the outstanding shares of Jones Intercable
Common Stock voting as a single class,
4
<PAGE>
- the holders of two-thirds of the outstanding shares of Jones Intercable
Class A Common Stock voting as a single class, and
- the holders of a majority of the outstanding shares of Jones Intercable
Common Stock and Class A Common Stock that are not beneficially owned by
Comcast or its affiliates voting together as a single class with each
share being entitled to one vote for the purpose of this approval.
As of the record date and the date of this proxy statement/prospectus,
Comcast, through a wholly owned subsidiary, indirectly owned 2,878,151 shares of
Jones Intercable Common Stock and 13,782,500 shares of Jones Intercable Class A
Common Stock representing approximately 56.3% and 37.3% of each respective
class. Comcast has agreed to vote its Jones Intercable shares in favor of
approval of the merger and the merger agreement.
As of the record date, the directors and executive officers of Jones
Intercable owned and were entitled to vote an aggregate additional 1,300 shares
of Jones Intercable Class A Common Stock, or less than 1% of the aggregate of
the outstanding shares of Class A Common Stock. These individuals have indicated
that they will vote these shares in favor of approval of the merger and the
merger agreement.
YOU SHOULD NOT SEND IN YOUR SHARE CERTIFICATES FOR EXCHANGE UNTIL WE
INSTRUCT YOU TO DO SO IF WE COMPLETE THE MERGER.
RECOMMENDATION OF SPECIAL COMMITTEE AND JONES INTERCABLE'S BOARD OF DIRECTORS
A special committee comprised of the independent directors of the Board of
Directors of Jones Intercable has unanimously:
- determined that the merger is fair to and in the best interests of the
public shareholders of Jones Intercable without regard to Comcast's
interests,
- approved and adopted the merger and the merger agreement, and
- recommended that the Jones Intercable Board and the shareholders of Jones
Intercable approve the merger and the merger agreement.
Jones Intercable's Board of Directors, based on the unanimous recommendation
of its independent special committee, has unanimously approved and adopted the
merger and the merger agreement and recommends that you vote to approve the
merger and the merger agreement. Each of the special committee and Jones
Intercable's Board of Directors believes that the merger is in the best
interests of Jones Intercable's shareholders.
Jones Intercable has received the written opinion of Donaldson, Lufkin &
Jenrette Securities Corporation (which is also referred to in this proxy
statement/prospectus as DLJ), the financial advisor to the special committee and
Jones Intercable, that the consideration to be received by the public
shareholders for their shares of Jones Intercable in the merger is fair to the
public shareholders from a financial point of view.
JONES INTERCABLE'S REASONS FOR THE MERGER
The special committee of the independent directors of Jones Intercable
considered Comcast's previous exchange offer and proposed the merger to Comcast
as a transaction that would offer advantages to the shareholders of Jones
Intercable over the exchange offer. Comcast had originally offered to exchange
1.4 shares of its Class A Special Common Stock for each share of Jones
Intercable Common Stock or Class A Common Stock for up to a number of shares
that when added to the Jones Intercable shares already owned by Comcast would
equal approximately 79% of the total shares of
5
<PAGE>
each class of Jones Intercable common stock outstanding at the time of the
announcement of the exchange offer. Under applicable law, the exchange offer was
also taxable to the shareholders of Jones Intercable. In the merger, the Jones
Intercable shareholders have the opportunity to receive 1.4 shares of Comcast
Class A Special Common Stock for all of their Jones Intercable shares in a
transaction that is generally not a taxable event for the Jones Intercable
shareholders (other than cash received by holders of Jones Intercable shares in
lieu of fractional shares, which will generally be taxable to the Jones
Intercable shareholders). The special committee has unanimously approved and
adopted the merger and the merger agreement and recommended that the Jones
Intercable Board of Directors and shareholders approve the merger and the merger
agreement. After receiving the special committee's recommendations, the Jones
Intercable Board of Directors believes that the merger is in the best interests
of the Jones Intercable shareholders.
NO DISSENTERS' RIGHTS
Under Colorado law the holders of Jones Intercable shares do not have
dissenters' rights in connection with the merger.
OPINION OF FINANCIAL ADVISOR
In deciding to approve and adopt the merger and the merger agreement, the
special committee and the Jones Intercable Board of Directors considered the
opinion of DLJ. The special committee and the Jones Intercable Board of
Directors received an opinion from DLJ that, as of the date of the opinion, the
merger consideration was fair to Jones Intercable shareholders from a financial
point of view. The opinion was based upon and subject to the assumptions,
limitations and qualifications stated in the opinion. The opinion is attached as
Appendix B to this document. We encourage you to read the opinion carefully.
INTERESTS OF OFFICERS AND DIRECTORS IN THE MERGER
When you consider the Jones Intercable Board of Directors' recommendation
that Jones Intercable shareholders vote in favor of the merger, you should be
aware that a number of Jones Intercable officers and directors are affiliated
with Comcast and may have interests in the merger that may be different from, or
in addition to, yours.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The merger is intended to qualify as a reorganization for U.S. federal
income tax purposes under the provisions of the U.S. federal income tax law that
deal with tax-free reorganizations. As such, no gain or loss will be recognized
by the shareholders of Jones Intercable on the exchange of their shares solely
for shares of Comcast Class A Special Common Stock. A shareholder may have to
recognize gain, however, in connection with any cash received in lieu of
fractional shares.
THIS TAX TREATMENT MAY NOT APPLY TO EVERY JONES INTERCABLE SHAREHOLDER.
DETERMINING THE ACTUAL TAX CONSEQUENCES OF THE MERGER TO YOU MAY BE VERY
COMPLICATED AND DEPEND ON YOUR SPECIFIC SITUATION. YOU SHOULD CONSULT WITH YOUR
OWN TAX ADVISOR FOR A FULL UNDERSTANDING OF THE TAX CONSEQUENCES OF THE MERGER
TO YOU.
CONDITIONS TO THE MERGER
Comcast and Jones Intercable will complete the merger only if the conditions
specified in the merger agreement are either satisfied or waived, including the
conditions that:
- the representations and warranties of the respective parties made in the
merger agreement remain accurate;
6
<PAGE>
- the parties perform their respective covenants and obligations in the
merger agreement;
- the Jones Intercable shareholders approve the merger and the merger
agreement by the requisite majorities;
- there are no restraining orders, injunctions or administrative actions or
proceedings preventing completion of the merger;
- Jones Intercable and Comcast receive all required consents and approvals
with respect to Jones Intercable's cable television franchises without any
condition, limitation or restriction unless the failure to obtain such
consent or any such limitation or condition to such consent would not be
reasonably expected to result in a material adverse effect on the
surviving corporation of the merger; and
- neither the special committee nor the Board of Directors of Jones
Intercable amends, withdraws or modifies in a manner adverse to Comcast or
Comcast JOIN Holdings, its adoption or recommendation of the merger or the
merger agreement.
TERMINATION OF THE MERGER AGREEMENT
The merger agreement may be terminated at any time prior to the effective
time of the merger as specified in the merger agreement, even if it was
previously approved by Jones Intercable shareholders. The termination provisions
contained in the merger agreement include the following:
- Comcast, Comcast JOIN Holdings or Jones Intercable may terminate the
merger agreement if:
- the merger is not completed by December 31, 2000, but the right to
terminate under this provision will not be available to a party whose
failure to fulfill any obligation under the merger agreement has been
the primary cause of the failure of the merger to occur;
- a governmental authority or legal action permanently prohibits the
merger;
- the Jones Intercable shareholders do not approve the merger by the
requisite majorities;
- the other company breaches any of its representations or warranties, or
any of its representations or warranties become inaccurate, in either
case such that the breaching company is unable to satisfy certain
conditions to the completion of the merger, and the breach or
inaccuracy is not cured; or
- a company's respective conditions are no longer capable of being
fulfilled and such incapacity is not waived by the other party.
- Comcast or Comcast JOIN Holdings may terminate the merger agreement if:
- the special committee amends, withdraws or modifies in a manner adverse
to Comcast or Comcast JOIN Holdings its approval or recommendation of
the merger or the merger agreement;
- DLJ amends, withdraws or modifies in a manner adverse to Comcast or
Comcast JOIN Holdings its fairness opinion.
- In addition, the parties may terminate the merger agreement upon their
mutual consent.
TERMINATION FEES
In the event that the merger agreement is terminated:
- because the special committee has amended or withdrawn in a manner adverse
to Comcast its recommendation of the merger,
7
<PAGE>
- because DLJ has amended or withdrawn in a manner adverse to Comcast its
fairness opinion, or
- under circumstances where Comcast or Comcast JOIN Holdings had the right
to terminate the merger agreement pursuant to such provisions,
then upon such termination, Jones Intercable will pay to Comcast $8,000,000. In
the event that the $8,000,000 payment is not payable and the merger agreement is
terminated because the requisite shareholder approval is not obtained then upon
such termination, Jones Intercable will pay to Comcast $2,000,000.
LISTING OF COMCAST CLASS A SPECIAL COMMON STOCK
Comcast will list the shares of its Class A Special Common Stock issued in
the merger on the Nasdaq National Market under the symbol "CMCSK."
COMPARATIVE MARKET PRICES FOR COMCAST CLASS A SPECIAL COMMON STOCK AND JONES
INTERCABLE SHARES
Comcast Class A Special Common Stock is traded on the Nasdaq National Market
under the symbol "CMCSK." Jones Intercable Common Stock and Class A Common Stock
are traded on the Nasdaq National Market under the symbols "JOIN" and "JOINA,"
respectively.
The following table sets forth the closing prices per share of Comcast
Class A Special Common Stock and Jones Intercable Common Stock and Class A
Common Stock, all as reported on the Nasdaq National Market on:
- August 6, 1999, the last trading day prior to the public announcement of
Comcast's exchange offer,
- December 21, 1999, the last trading day prior to the public announcement
of the merger, and
- January 24, 2000, the last trading day prior to the date of this proxy
statement/prospectus.
<TABLE>
<CAPTION>
JONES INTERCABLE
-----------------------------
COMCAST CLASS A
CLASS A SPECIAL COMMON COMMON
COMMON STOCK STOCK STOCK
CLOSING PRICE CLOSING PRICE CLOSING PRICE
--------------- ------------- -------------
<S> <C> <C> <C>
August 6, 1999......................................... $35 15/16 $44 5/8 $46 1/8
December 21, 1999...................................... $51 $63 1/4 $66 7/8
January 24, 2000....................................... $51 11/16 $72 $70 1/2
</TABLE>
Based upon the closing market prices of these shares on August 6, 1999, the
day prior to the public announcement of Comcast's exchange offer, the exchange
ratio represented a premium of approximately 12.7% and 9.1% for the Jones
Intercable Common Stock and Class A Common Stock, respectively.
Based upon the closing price of Comcast's Class A Special Common Stock on
December 21, 1999, the last trading date prior to the public announcement of the
merger, and the closing market prices of shares of Jones Intercable Common Stock
and Class A Common Stock on August 6, 1999, the day prior to Comcast's public
announcement of its exchange offer, the exchange ratio represented a premium of
approximately 60.0% and 54.8% for the Jones Intercable Common Stock and Class A
Common Stock, respectively.
The market prices of Comcast Class A Special Common Stock and Jones
Intercable Common Stock and Class A Common Stock may increase or decrease before
the completion of the merger. Therefore, we urge you to obtain current market
quotations for these securities.
8
<PAGE>
REGULATORY MATTERS
In connection with Comcast's acquisition of a controlling interest in Jones
Intercable, we observed the notification and waiting period requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. We filed the
required notification with the Antitrust Division of the U.S. Department of
Justice and the Federal Trade Commission on August 25, 1998 and the waiting
period expired on September 15, 1998. No further filings under the HSR Act are
required in connection with the merger. Notwithstanding expiration of the
waiting period and transfer of control of Jones Intercable to Comcast on
April 7, 1999, the FTC, the Antitrust Division and others continue to have the
authority to challenge the merger on antitrust grounds before and after the
merger is completed.
We were also required to obtain approval from the Federal Communications
Commission with respect to Comcast's acquisition of a controlling interest in
Jones Intercable. In addition, Comcast's acquisition of a controlling interest
in Jones Intercable was subject to certain state and local franchise approvals
or actions. We received all material FCC and state and local franchise approvals
relating to the closing of the acquisition of Comcast's controlling interest in
Jones Intercable prior to that closing. We do not believe that any further
approvals from the FCC are required in order to complete the merger since
Comcast already owns a controlling interest in Jones Intercable.
Comcast and Jones Intercable intend to make the appropriate filings and take
other actions necessary to obtain approval of the proposed merger from the
appropriate state and local franchising authorities where further approvals may
be required. However, we can give no assurances as to when or whether these
approvals and consents will be obtained or the terms and conditions that may be
imposed.
Comcast is not required to complete the merger unless Jones Intercable and
Comcast receive all required consents and approvals with respect to Jones
Intercable's cable television franchises without any condition, limitation or
restriction unless the failure to obtain such consents and approvals or any such
limitation or condition to such consents and approvals would not be reasonably
expected to result in a material adverse effect on the surviving corporation of
the merger. For a more detailed description of the conditions to the merger, see
the section entitled "The Merger Agreement--Conditions to the Completion of the
Merger."
PURCHASE OF A BUSINESS ACCOUNTING TREATMENT
The merger will be accounted for by Comcast as a step-acquisition under the
purchase method of accounting. This means that, for accounting and financial
reporting purposes, the assets and liabilities of Jones Intercable not
previously owned by Comcast or its affiliates will be recorded at their fair
value, and any excess of Comcast's purchase price over the fair value of Jones
Intercable's tangible net assets not previously owned by Comcast or its
affiliates will be recorded as intangible assets, including goodwill.
9
<PAGE>
SUMMARY SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF COMCAST
The following table contains summary selected historical consolidated
financial data of Comcast. Comcast has derived this data from its audited
financial statements for the five years ended December 31, 1998 and from its
unaudited financial statements for the nine months ended September 30, 1999. The
following information is only a summary and you should read it together with
Comcast's audited consolidated financial statements (and the related notes) and
Comcast's unaudited quarterly condensed consolidated financial statements on
file with the SEC. See "Where You Can Find More Information."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1998(1) 1997(1) 1996(1) 1995 1994
--------- --------- --------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................ $ 5,145.3 $ 4,467.7 $ 3,612.3 $ 2,988.1 $ 1,089.2
Operating income........................ 557.1 466.6 465.9 397.7 213.4
Income (loss) from continuing operations
before extraordinary items............ 1,007.7 (182.9) (6.4) 48.0 (46.1)
Loss from discontinued operations (2)... 31.4 25.6 46.1 85.8 29.2
Extraordinary items..................... (4.2) (30.2) (1.0) (6.1) (11.7)
Net income (loss)....................... 972.1 (238.7) (53.5) (43.9) (87.0)
BASIC EARNINGS (LOSS) FOR COMMON
STOCKHOLDERS PER COMMON SHARE (3)
Income (loss) from continuing
operations before extraordinary
items............................... $ 1.34 $ (0.29) $ (0.01) $ 0.10 $ (0.10)
Loss from discontinued operations
(2)................................. (0.04) (0.04) (0.10) (0.18) (0.06)
Extraordinary items................... (0.01) (0.05) (0.02) (0.03)
--------- --------- --------- --------- ---------
Net income (loss)..................... $ 1.29 $ (0.38) $ (0.11) $ (0.10) $ (0.19)
--------- --------- --------- --------- ---------
DILUTED EARNINGS (LOSS) FOR COMMON
STOCKHOLDERS PER COMMON SHARE (3)
Income (loss) from continuing
operations before extraordinary
items............................... $ 1.25 $ (0.29) $ (0.01) $ 0.10 $ (0.10)
Loss from discontinued operations
(2)................................. (0.03) (0.04) (0.10) (0.18) (0.06)
Extraordinary items................... (0.01) (0.05) (0.02) (0.03)
--------- --------- --------- --------- ---------
Net income (loss)..................... $ 1.21 $ (0.38) $ (0.11) $ (0.10) $ (0.19)
========= ========= ========= ========= =========
Cash dividends declared per common share
(3)................................... $ 0.0467 $ 0.0467 $ 0.0467 $ 0.0467 $ 0.0467
BALANCE SHEET DATA (AT YEAR END):
Total assets............................ $14,710.5 $11,326.8 $10,660.4 $ 8,159.9 $ 5,480.0
Long-term debt.......................... 5,464.2 5,334.1 5,998.3 6,014.8 4,066.0
Stockholders' equity (deficiency)....... 3,815.3 1,646.5 551.6 (827.7) (726.8)
SUPPLEMENTARY FINANCIAL DATA:
Operating income before depreciation and
amortization (4)...................... $ 1,496.7 $ 1,293.1 $ 1,047.0 $ 881.0 $ 459.9
Net cash provided by (used in) (5)
Operating activities.................. 1,079.7 855.3 644.5 466.7 339.7
Financing activities.................. 809.2 283.9 (88.0) 1,785.7 1,089.2
Investing activities.................. (1,427.3) (1,056.5) (749.5) (2,060.3) (1,254.4)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------
1999(1) 1998(1)
-------------- --------------
(IN MILLIONS, EXCEPT PER SHARE
DATA)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................................. $ 4,377.6 $ 3,698.3
Operating income.......................................... 487.4 366.3
Income from continuing operations before extraordinary
items................................................... 948.5 574.7
Discontinued operations(2)................................ (335.8) 21.4
Extraordinary items....................................... (44.4) (3.0)
Net income................................................ 1,217.5 528.6
BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON
SHARE(3)
Income from continuing operations before extraordinary
items................................................... $ 1.24 $ 0.75
Discontinued operations(2)................................ 0.45 (0.03)
Extraordinary items....................................... (0.06)
----------- -----------
Net income................................................ $ 1.63 $ 0.72
=========== ===========
DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON
SHARE(3)
Income from continuing operations before extraordinary
items................................................... $ 1.16 $ 0.72
Discontinued operations(2)................................ 0.41 (0.03)
Extraordinary items....................................... (0.05)
----------- -----------
Net income................................................ $ 1.52 $ 0.69
=========== ===========
Cash dividends declared per common share(3)................. 0.035
BALANCE SHEET DATA (AT SEPTEMBER 30, 1999):
Total assets................................................ $ 22,264.9
Long-term debt.............................................. 6,778.0
Stockholders' equity........................................ 7,635.9
SUPPLEMENTARY FINANCIAL DATA:
Operating income before depreciation and amortization(4).... $ 1,346.3 $ 1,075.2
Net cash provided by (used in)(5)
Operating activities...................................... 2,387.8 776.6
Financing activities...................................... (216.2) 124.5
Investing activities...................................... (2,160.4) (889.4)
</TABLE>
- ------------------------
(1) You should see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in Comcast's Annual Report on Form 10-K
for the year ended December 31, 1998 and in Comcast's Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 1999 for a discussion
of events which affect the comparability of the information reflected in
this financial data. See "Where You Can Find More Information."
(2) In July 1999, Comcast sold Comcast Cellular Corporation to SBC
Communications, Inc. This represents the results of Comcast Cellular which
are presented as a discontinued operation for all periods presented.
(3) Comcast has adjusted these for its three-for-two stock split effective
February 2, 1994 and its two-for-one stock split effective May 5, 1999.
(4) Operating income before depreciation and amortization is commonly referred
to in Comcast's businesses as "operating cash flow." Operating cash flow is
a measure of a company's ability to generate cash to service its
obligations, including debt service obligations, and to finance capital
11
<PAGE>
and other expenditures. In part due to the capital intensive nature of
Comcast's businesses and the resulting significant level of non-cash
depreciation and amortization expense, operating cash flow is frequently
used as one of the bases for comparing businesses in Comcast's industries,
although Comcast's measure of operating cash flow may not be comparable to
similarly titled measures of other companies. Operating cash flow is the
primary basis used by Comcast's management to measure the operating
performance of Comcast's businesses. Operating cash flow does not purport to
represent net income or net cash provided by operating activities, as those
terms are defined under generally accepted accounting principles, and should
not be considered as an alternative to those measurements as an indicator of
Comcast's performance.
(5) This represents net cash provided by (used in) operating activities,
financing activities and investing activities as presented in Comcast's
consolidated statement of cash flows.
12
<PAGE>
SUMMARY SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF JONES INTERCABLE
The following table contains summary selected historical consolidated
financial data of Jones Intercable. Jones Intercable has derived this data from
its audited consolidated financial statements for the five years ended
December 31, 1998 and from its unaudited condensed consolidated financial
statements for the nine months ended September 30, 1999. The following
information is only a summary and you should read it together with Jones
Intercable's audited consolidated financial statements (and the related notes)
and Jones Intercable's unaudited quarterly condensed consolidated financial
statements on file with the SEC. See "Where You Can Find More Information."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------
1998(1) 1997(1) 1996(1) 1995 1994
-------- -------- -------- -------- --------
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues....................................... $ 460.7 $ 362.6 $ 311.7 $ 188.8 $131.9
Operating income (loss)........................ 23.4 (17.2) 4.0 14.7 11.2
Loss before extraordinary items................ (80.4) (38.5) (62.7) (21.0) (8.7)
Extraordinary items............................ (13.5) (0.7)
Net loss....................................... (80.4) (52.0) (62.7) (21.7) (8.7)
BASIC LOSS FOR COMMON STOCKHOLDERS PER COMMON
SHARE:
Loss before extraordinary items.............. $ (1.96) $ (1.11) $ (2.00) $ (0.67) $(0.45)
Extraordinary items.......................... (0.39) (0.02)
-------- -------- -------- ------- ------
Net loss..................................... $ (1.96) $ (1.50) $ (2.00) $ (0.69) $(0.45)
======== ======== ======== ======= ======
BALANCE SHEET DATA (AT YEAR END):
Total assets................................. $1,731.1 $1,371.4 $1,134.1 $ 860.5 $608.3
Long-term debt............................... 1,460.5 1,023.1 805.3 492.0 281.1
Stockholders' equity......................... 155.6 228.5 235.3 292.8 271.3
SUPPLEMENTARY FINANCIAL DATA:
Operating income before depreciation and
amortization(2).............................. $ 228.1 $ 158.7 $ 135.2 $ 70.5 $ 56.8
Net cash provided by (used in)(3)
Operating activities......................... 108.4 79.3 72.9 23.5 28.7
Financing activities......................... 447.5 291.7 323.9 221.6 81.7
Investing activities......................... (556.9) (369.1) (397.4) (321.4) (32.5)
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1999(1) 1998(1)
--------- ---------
(IN MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................................. $ 401.3 $ 337.7
Operating (loss) income................................... (108.5) 14.0
Net loss.................................................. (201.1) (67.8)
BASIC LOSS FOR COMMON STOCKHOLDERS PER COMMON SHARE......... $ (4.81) $ (1.66)
BALANCE SHEET DATA (AT SEPTEMBER 30, 1999):
Total assets.............................................. $1,763.8
Long-term debt............................................ 1,643.1
Stockholders' (deficiency)................................ (45.8)
SUPPLEMENTARY FINANCIAL DATA:
Operating income before depreciation and amortization(2).... $ 146.6 $ 158.6
Net cash provided by (used in)(3)
Operating activities...................................... 20.9 79.9
Financing activities...................................... 227.8 258.6
Investing activities...................................... (230.5) (339.2)
</TABLE>
- ------------------------
(1) You should see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in Jones Intercable's Annual Report on
Form 10-K for the year ended December 31, 1998 and in Jones Intercable's
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30,
1999 for a discussion of events which affect the comparability of the
information reflected in this financial data. See "Where You Can Find More
Information."
(2) Operating income before depreciation and amortization is commonly referred
to in Jones Intercable's business as "operating cash flow." Operating cash
flow is a measure of a company's ability to generate cash to service its
obligations, including debt service obligations, and to finance capital and
other expenditures. In part due to the capital intensive nature of Jones
Intercable's business and the resulting significant level of non-cash
depreciation and amortization expense, operating cash flow is frequently
used as one of the bases for comparing businesses in Jones Intercable's
industries, although Jones Intercable's measure of operating cash flow may
not be comparable to similarly titled measures of other companies. Operating
cash flow is the primary basis used by Jones Intercable's management to
measure the operating performance of Jones Intercable's business. Operating
cash flow does not purport to represent net income or net cash provided by
operating activities, as those terms are defined under generally accepted
accounting principles, and should not be considered as an alternative to
those measurements as an indicator of Jones Intercable's performance.
(3) This represents net cash provided by (used in) operating activities,
financing activities and investing activities as presented in Jones
Intercable's consolidated statement of cash flows.
14
<PAGE>
COMPARATIVE PER SHARE DATA
The following table presents historical and pro forma per share data and
historical per share data of Comcast and Jones Intercable. You should read this
information together with the historical financial statements incorporated by
reference in this document. While the pro forma information is helpful in
showing our financial characteristics after the completion of the merger, it
does not attempt to predict or suggest future results.
The information in the following table is based on the historical
information that Comcast and Jones Intercable have presented in the reports and
other information that Comcast and Jones Intercable have filed with the SEC. We
have incorporated this material into this document by reference. See "Where You
Can Find More Information."
<TABLE>
<CAPTION>
COMCAST JONES INTERCABLE
-------------------------- --------------------------
EQUIVALENT
HISTORICAL PRO FORMA (1) HISTORICAL PRO FORMA (2)
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEMS:
INCOME (LOSS) PER SHARE--BASIC:
For the nine months ended September 30, 1999.... $ 1.24 $ 1.03 $(4.81) $ 1.44
For the year ended December 31, 1998............ 1.34 0.96 (1.96) 1.34
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
EXTRAORDINARY ITEMS:
INCOME (LOSS) PER SHARE--DILUTED:
For the nine months ended September 30, 1999.... $ 1.16 $ 0.97 $(4.81) $ 1.36
For the year ended December 31, 1998............ 1.25 0.91 (1.96) 1.27
CASH DIVIDENDS DECLARED PER SHARE:
For the year ended December 31, 1998............ $ 0.05 $ 0.05 $ 0.07
BOOK VALUE PER SHARE:(3)
September 30, 1999.............................. $10.16 $12.00 $(1.09) $16.80
December 31, 1998............................... 5.16 7.26 3.78 10.16
</TABLE>
- ------------------------
(1) Pro forma information gives effect to the merger as of and for the periods
beginning on the dates indicated.
(2) The equivalent pro forma per share data for Jones Intercable is computed by
multiplying Comcast's pro forma per share information by the exchange ratio
of 1.4.
(3) Book value per share is computed by dividing total stockholders' equity by
the aggregate number of common shares outstanding as of the balance sheet
date.
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RISK FACTORS
You should carefully consider the following risk factors and other
information in this proxy statement/prospectus before you vote for our merger.
You should also review "Special Note Regarding Forward-Looking Statements."
RISKS RELATING TO COMCAST
BECAUSE COMCAST CLASS A SPECIAL COMMON STOCK IS NON-VOTING, YOU WILL HAVE NO
RIGHT TO VOTE IN THE ELECTION OF DIRECTORS
Comcast's authorized common stock consists of 200,000,000 shares of Class A
Common Stock, 2,500,000,000 shares of Class A Special Common Stock and
50,000,000 shares of Class B Common Stock, of which 25,993,380 shares of
Class A Common Stock, 716,442,482 shares of Class A Special Common Stock, and
9,444,375 shares of Class B Common Stock were outstanding as of December 31,
1999. Holders of Comcast's Class A Special Common Stock cannot vote in the
election of directors or otherwise, except where class voting is required by
law. In that case, holders of Class A Special Common Stock have one vote per
share. Generally, holders of Class A Common Stock have one vote per share.
Holders of Class B Common Stock have 15 votes per share. Generally, including
the election of directors, holders of Class A Common Stock and Class B Common
Stock vote as one class, except where class voting is required by law.
THE VOTING CONTROL OF COMCAST'S PRINCIPAL SHAREHOLDER MAY DISCOURAGE THIRD PARTY
ACQUISITIONS OF COMCAST AT A PREMIUM
As of December 31, 1999, Sural Corporation owned 9,444,375 shares of
Comcast's outstanding Class B Common Stock and 136,913 shares of its outstanding
Class A Common Stock. Mr. Brian L. Roberts, President of Comcast, controls Sural
and is deemed to be the beneficial owner of the shares of Class A and Class B
Common Stock owned by Sural. In addition, as of December 31, 1999, Mr. Roberts
was the beneficial owner of an additional 1,356 shares of Class A Common Stock.
Since each share of Class B Common Stock is entitled to 15 votes, the shares of
Class A Common Stock and Class B Common Stock owned by Sural and Mr. Roberts
constitute approximately 85% of the voting power of the two classes of Comcast's
voting common stock combined. Mr. Roberts' beneficial ownership, directly and
through Sural, allows Mr. Roberts to control substantially all actions to be
taken by Comcast's shareholders, including the election of directors to
Comcast's Board of Directors. This voting control may have the effect of
discouraging offers to acquire Comcast because the consummation of any such
acquisition would effectively require the consent of Mr. Roberts and may
preclude holders of Comcast's common stock from receiving any premium above
market price for their shares that may be offered in connection with any attempt
to acquire control of Comcast.
COMCAST'S ARTICLES OF INCORPORATION AND BYLAWS CONTAIN ANTI-TAKEOVER PROVISIONS
WHICH MAY DISCOURAGE A THIRD PARTY FROM OFFERING TO ACQUIRE COMCAST'S SHARES AT
A PREMIUM
Certain provisions of Comcast's Articles of Incorporation and Bylaws could
have the effect of making it more difficult for a third party to acquire, or
discouraging a third party from acquiring, a majority of Comcast's outstanding
capital stock and could make it more difficult to consummate certain types of
transactions involving an actual or potential change of control in Comcast, such
as a merger, tender offer or proxy contest. The most significant of these is the
disparate voting rights of Comcast's common stock described above. Additionally,
shares of Comcast's preferred stock may be issued in the future without further
shareholder approval and upon such terms and conditions, and having such rights,
privileges and preferences, as Comcast's Board of Directors may determine.
Comcast's Board of Directors may create and issue a series of preferred stock
with rights, privileges or preferences that have the effect of discriminating
against an existing or prospective shareholder if that shareholder owns
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<PAGE>
or commences a tender offer for a substantial amount of Comcast's Common Stock.
This action may, in turn, delay, discourage or prevent a change of control of
Comcast without any action by Comcast's shareholders. As a result of the
provisions mentioned above, Comcast's shareholders may fail to receive any
premium above the market price of Comcast's stock offered by a third party
attempting to acquire control of Comcast.
COMCAST'S ABILITY TO SUCCESSFULLY INTEGRATE ITS NEW CABLE COMMUNICATIONS
OPERATIONS WILL AFFECT ITS FUTURE RESULTS OF OPERATIONS
Comcast recently has entered into a series of transactions which will
substantially increase the size and scope of its cable operations over the next
several years. These transactions will result in an increase in the number of
subscribers it serves from approximately 5.7 million, as of September 30, 1999,
to approximately 8.2 million. On January 18, 2000, Comcast, through a wholly
owned subsidiary, acquired Lenfest Communications, Inc., a cable communications
company serving approximately 1.25 million subscribers, from AT&T Corp. and the
other Lenfest shareholders in a merger. In connection with this acquisition,
Comcast issued approximately 121.4 million shares of its Class A Special Common
Stock and assumed approximately $1.346 billion of Lenfest debt. Comcast will be
acquiring systems in new communities in which it does not have established
relationships with the local franchising authority, community leaders and cable
subscribers. Further, a substantial number of new employees must be integrated
into Comcast's business practices and operations. Comcast's results of
operations may be significantly affected by its ability to efficiently and
effectively manage these changes.
COMCAST FACES A WIDE RANGE OF COMPETITION IN AREAS SERVED BY ITS CABLE SYSTEMS,
WHICH COULD AFFECT ITS FUTURE RESULTS OF OPERATIONS
Comcast's cable communications systems compete with a number of different
sources which provide news, information and entertainment programming to
consumers. Comcast competes directly with program distributors that use
satellites, build competing cable systems in the same communities Comcast serves
or otherwise provide programming to its subscribers and potential subscribers.
In addition, federal law now allows local telephone companies to provide
directly to subscribers a wide variety of services that are competitive with its
cable communications services. Some local telephone companies provide or have
announced plans to provide video services within and outside their telephone
service areas through a variety of methods, including broadband cable networks,
satellite program distribution and wireless transmission facilities.
Recently enacted federal legislation establishes, among other things, a
permanent compulsory copyright license that permits satellite carriers that
offer broadcast satellite service, such as DirectTV and Echostar, to retransmit
local broadcast television signals to subscribers who reside inside the local
television station's market. These companies have already begun transmitting
local broadcast signals in certain major television markets and have announced
their intention to expand this local television broadcast retransmission service
to other domestic markets. With this legislation, satellite carriers become more
competitive to cable operators like Comcast because they are now able to offer
programming which more closely resembles what Comcast offers. Comcast is unable
to predict the effects of this legislation and these competitive developments on
its business and operations.
COMCAST'S COMPETITION MAY INCREASE BECAUSE OF TECHNOLOGICAL AND OTHER ADVANCES,
WHICH COULD AFFECT COMCAST'S FUTURE RESULTS OF OPERATIONS
Recently, a number of companies, including telephone companies and ISPs have
asked local authorities and the FCC to mandate that cable operators provide
capacity on their broadband infrastructure so that these companies and others
may deliver Internet services directly to customers over cable facilities. In
response, several local jurisdictions attempted to impose these capacity
obligations on several cable operators. Various cable companies, including
Comcast, have initiated
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<PAGE>
litigation challenging these municipal requirements. In addition, two antitrust
lawsuits have been filed in federal courts alleging that Comcast and other cable
companies have improperly refused to allow their cable facilities to be used by
certain ISPs to serve their customers. Franchise renewals and transfers could
become more difficult depending upon the outcome of this issue. In addition,
several telephone companies are introducing Digital Subscriber Line technology,
known as DSL, which will allow Internet access to subscribers at data
transmission speeds equal to or greater than that of modems over conventional
telephone lines.
Comcast expects advances in communications technology, as well as changes in
the marketplace and the regulatory and legislative environment to occur in the
future. Other new technologies and services may develop and may compete with
services that its cable communications systems offer. The success of these
ongoing or future developments could have a negative impact on Comcast's
business and operations.
COMCAST'S COST OF PROVIDING PROGRAMMING MAY INCREASE
Comcast generally pays either a monthly fee per subscriber per channel or a
percentage of certain revenues for programming. Comcast's programming costs are
increased by increases in the number of subscribers, expansion of the number of
channels provided to customers, and increases in contract rates from programming
suppliers. Comcast's programming contracts are generally for a fixed period of
time and are subject to negotiated renewal. Comcast anticipates that future
contract renewals will result in programming costs that are higher than its
costs today, particularly for sports programming, which could make its service
less competitive.
COMCAST FACES COMPETITION IN ELECTRONIC RETAILING FROM THE RETAIL INDUSTRY AND
OTHER SATELLITE-TRANSMITTED PROGRAMS, WHICH COULD AFFECT QVC'S FUTURE RESULTS OF
OPERATIONS
QVC, Comcast's electronic retailing subsidiary, is a domestic and
international electronic media general merchandise retailer which produces and
distributes merchandise-focused television programs, via satellite, to
affiliated video program providers for retransmission to subscribers. QVC
operates in a highly competitive environment. As a general merchandise retailer,
QVC competes for consumer expenditures and interest with the entire retail
industry, including department, discount, warehouse and specialty stores, mail
order, Internet and other direct sellers, shopping center and mall tenants and
conventional retail stores. On television, QVC competes with other
satellite-transmitted programs for channel space and viewer loyalty. Many
systems have limited channel capacity and therefore may be precluded from
carrying the QVC program.
THE QVC PROGRAM MAY EXPERIENCE TRANSMISSION FAILURES, WHICH COULD SIGNIFICANTLY
AFFECT QVC'S FUTURE RESULTS OF OPERATIONS
A transponder on a communications satellite transmits the QVC domestic
signal. QVC subleases transponders for the transmission of its signals to the UK
and Germany and has made arrangements for redundant coverage through other
satellites in case of a failure. Comcast cannot offer assurances that there will
not be an interruption or termination of satellite transmission due to
transponder failure. An interruption or termination of satellite transmission
due to transponder failure could have a material adverse effect on QVC's future
results of operations.
RISKS RELATING TO THE MERGER
THE VALUE OF COMCAST'S CLASS A SPECIAL COMMON STOCK YOU WILL RECEIVE IN THE
MERGER MAY FLUCTUATE
The number of shares of Comcast's Class A Special Common Stock to be
received in the merger for each share of Jones Intercable Common Stock or
Class A Common Stock is fixed. Therefore, because the market price of its
Class A Special Common Stock is subject to fluctuation, the value of
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<PAGE>
the consideration to be received by Jones Intercable shareholders will depend on
the market price of Comcast Class A Special Common Stock at the time the merger
is completed. We cannot give you any assurance as to the market value of the
shares of Comcast Class A Special Common Stock at the time the merger is
completed.
REGULATORY AGENCIES MAY IMPOSE CONDITIONS ON APPROVALS RELATING TO THE MERGER
A condition to Comcast's obligation to complete the merger is that Comcast
receives, without any restrictions or conditions, all required regulatory
consents and approvals unless the failure to obtain such consents and the
restrictions or conditions placed on such consents would not be reasonably
expected to result in a material adverse effect on the surviving corporation of
the merger. Additionally, Comcast and Jones Intercable have agreed to cooperate
with each other and use their best efforts to obtain all such regulatory
consents and approvals.
It is possible that third parties will request that certain state and local
franchise authorities condition their approval of the merger on requiring
Comcast and Jones Intercable to unbundle their cable facilities and make them
available to competitors. There can be no assurance that, if such requests are
made, such state and local authorities will not impose such obligations on
Comcast and Jones Intercable as a condition to their approval of the merger or
at some later date. Similarly, local franchise authorities that must consent to
the merger may impose similar unbundling obligations as a condition to their
consent to the merger or at a later date. Although Comcast and Jones Intercable
believe that it is unlawful for local franchise authorities to impose these
obligations, there can be no assurance that franchise authorities will not seek
to impose them.
If the state or local franchise authorities impose unbundling requirements
as a condition to approval of the merger, completion of the merger may be
delayed or jeopardized. In addition, imposition of unbundling requirements may
reduce the expected benefits of the merger, the operating results of the
combined company and the value of Comcast Class A Special Common Stock.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The cable communications industry and the provision of programming content
may be affected by, among other things:
- changes in laws and regulations,
- judicial and administrative decisions,
- changes in the competitive environment,
- changes in technology,
- franchise related matters,
- market conditions that may adversely affect the availability of debt and
equity financing for working capital, capital expenditures or other
purposes,
- demand for the programming content Comcast and Jones Intercable distribute
or the willingness of other video program providers to carry their
content, and
- general economic conditions.
In this proxy statement/prospectus and in the documents Comcast and Jones
Intercable incorporate by reference, we state our beliefs of future events and
our future performances. In some cases, you can identify those so-called
"forward-looking statements" by words such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue" or the negative of those words and other comparable
words. You should be aware that those statements are
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<PAGE>
only our predictions. Actual events or results may differ materially. In
evaluating those statements, you should specifically consider various factors,
including the risks outlined under "Risk Factors" above. Those factors may cause
Comcast's or Jones Intercable's actual results to differ materially from any of
its forward-looking statements.
THE MERGER
The Jones Intercable Board of Directors is using this proxy
statement/prospectus to solicit proxies from the holders of Jones Intercable
Common Stock and Class A Common Stock for use at the Jones Intercable special
meeting. At the meeting, we will ask holders of Jones Intercable shares to
approve the merger and the merger agreement.
THE COMPANIES
COMCAST CORPORATION
1500 Market Street
Philadelphia, PA 19102-2148
(215) 665-1700
Comcast is a Pennsylvania corporation that was organized in 1969. Comcast is
principally engaged both in developing, managing and operating hybrid
fiber-coaxial broadband cable communications networks and in providing
programming content, primarily through QVC, Inc., its electronic retailing
subsidiary. Comcast is currently the third-largest cable communications system
operator in the United States and is in the process of implementing digital
video applications and high-speed Internet access service to enhance the
products available on its cable networks.
Comcast's consolidated cable operations served approximately 5.7 million
subscribers and passed approximately 9.4 million homes in the United States as
of September 30, 1999. On January 18, 2000, Comcast, through a wholly owned
subsidiary, acquired Lenfest Communications, Inc., a cable communications
company serving approximately 1.25 million subscribers, from AT&T Corp. and the
other Lenfest shareholders in a merger. In connection with this acquisition,
Comcast issued approximately 121.4 million shares of its Class A Special Common
Stock and assumed approximately $1.346 billion of Lenfest debt. Comcast has
entered into a series of transactions whereby Comcast will acquire, subject to
receipt of necessary regulatory and other approvals, approximately 1.25 million
cable subscribers over the next twelve to eighteen months. Upon completion of
these pending transactions, Comcast will serve approximately 8.2 million
subscribers.
Comcast provides programming content through its majority-owned
subsidiaries, QVC and E! Entertainment Television, Inc., and through other
programming investments, including Comcast SportsNet, The Golf Channel,
Speedvision and Outdoor Life. Through QVC, Comcast markets a wide variety of
products directly to consumers primarily on merchandise-focused television
programs. As of September 30, 1999, QVC was available, on a full and part-time
basis, to over 73.6 million homes in the United States, over 7.7 million homes
in the United Kingdom and Ireland and over 15.0 million homes in Germany.
Comcast has a world wide web site at http://www.comcast.com. The information
posted on Comcast's web site is not incorporated into this proxy
statement/prospectus.
COMCAST JOIN HOLDINGS, INC.
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
(215) 665-1700
Comcast JOIN Holdings, Inc is a Delaware corporation and wholly owned
subsidiary of Comcast formed by Comcast in December 1999 solely for the purpose
of merging with Jones Intercable.
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JONES INTERCABLE, INC.
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
(215) 665-1700
Jones Intercable, Inc. is a Colorado corporation organized in 1970. It is
principally engaged in developing, managing and operating hybrid fiber-coaxial
broadband cable communications networks serving more than 1.0 million customers
as of September 30, 1999. Jones Intercable is currently a consolidated public
company subsidiary of Comcast Cable Communications, Inc., and an indirect
consolidated subsidiary of Comcast Corporation.
Jones Intercable has a world wide web site at http://www.jic.com. The
information posted on the web site is not incorporated into this proxy
statement/prospectus.
BACKGROUND OF THE MERGER
In January 1998, Comcast was approached by representatives of BCI Telecom
Holding Inc., who then owned 12,782,500 shares of Jones Intercable Class A
Common Stock, to determine whether Comcast would be willing to purchase BCI's
interests in Jones Intercable. BCI also held an option to purchase 2,878,151
shares of Jones Intercable Common Stock from entities controlled by Mr. Glenn
Jones. Under most circumstances BCI's option would not have been exercisable
until December 2001. Throughout April and May of 1998, Comcast, BCI and their
representatives negotiated Comcast's acquisition of BCI's interests in Jones
Intercable and certain affiliated companies. On May 22, 1998, Comcast entered
into an agreement with BCI pursuant to which Comcast agreed to purchase BCI's
interests in Jones Intercable for approximately $500 million. This agreement
contemplated a two step acquisition of BCI's investment in Jones Intercable and
the affiliated companies over a period of years. BCI also granted Comcast
certain consultation rights regarding BCI's exercise of its rights pursuant to
agreements among BCI and Mr. Jones and his affiliates and Jones Intercable.
Immediately after the execution of the agreement with BCI, Comcast
representatives notified Mr. Jones of the Comcast-BCI agreement. Representatives
of Mr. Jones then began to explore with Comcast the possibility of structuring a
transaction which would enable Comcast to acquire BCI's interests in Jones
Intercable, including the shares of Jones Intercable Common Stock subject to
BCI's option, on an accelerated timetable.
On July 27, 1998, the Board of Directors of Jones Intercable appointed a
special committee of three disinterested directors solely to consider
terminating Mr. Jones' employment with Jones Intercable at the closing of the
transactions among BCI, Comcast and Mr. Jones and his affiliates if those
parties were able to reach a definitive agreement and the payment by Jones
Intercable for the relinquishment of certain programming rights which Mr. Jones
owned. The special committee retained Salomon Smith Barney, Inc. and Strategis
Financial Consulting, Inc. as its financial advisors and Wilmer, Cutler &
Pickering to serve as its legal counsel at that time. On August 11, 1998, the
special committee recommended that Jones Intercable terminate Mr. Jones'
employment in accordance with a pre-existing employment agreement and pay him a
severance payment of approximately $8 million. In addition, the special
committee also recommended that Jones Intercable pay $25 million for the
relinquishment of Mr. Jones' programming rights. On August 11, 1998, the full
Board of Directors of Jones Intercable adopted the recommendations of the
special committee.
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<PAGE>
On August 12, 1998, Comcast entered into an agreement with Mr. Jones and
several entities controlled by him providing for an acceleration of the exercise
of BCI's option. In addition, the agreements among BCI, Mr. Jones and Comcast
included the following material terms and covenants:
- Comcast, BCI and Mr. Jones agreed that the exercise price of BCI's option
would be $200 million.
- Mr. Jones agreed to resign from the Board of Directors of Jones Intercable
and to cause the other directors designated by him to resign and to
appoint nominees designated by Comcast to fill the vacancies.
- Mr. Jones agreed to offer to enter into the following transactions with
Jones Intercable after the closing of Comcast's transactions with BCI and
Mr. Jones pursuant to the May and August 1998 agreements, if such
transactions were not completed prior to the closing:
- the assumption by entities controlled by Mr. Jones of Jones
Intercable's rights and obligations under a lease for an aircraft
leased by Jones Intercable;
- the termination of an information management and data processing
services agreement between Jones Intercable and a company controlled by
Mr. Jones (subject to the payment of an early termination fee); and
- the termination of an office lease between Jones Intercable and Jones
Properties, Inc., a company controlled by Mr. Jones (subject to the
payment of an early termination fee).
- Mr. Jones agreed to dismiss the appeal that he and certain companies
controlled by him had initiated against BCI in a lawsuit brought by BCI
against Jones Intercable, Mr. Jones, certain directors of Jones Intercable
and certain companies controlled by Mr. Jones.
- Mr. Jones agreed to cause Knowledge TV and Great American Country,
affiliates of Mr. Jones that provided cable television programming to
Jones Intercable's cable systems, to amend their programming agreements
with Jones Intercable.
- Comcast agreed to enter into carriage agreements with Knowledge TV and
Great American Country and to amend an existing agreement with Great
American Country to provide for the carriage of its programming on
additional cable systems owned by Comcast.
- Mr. Jones agreed to cause companies controlled by him to waive any rights
that they might have under certain shareholders agreements relating to the
sale to Comcast of stock of Jones Education Company and Jones
Entertainment Group, companies affiliated with Mr. Jones, pursuant to
Comcast's agreement with BCI.
- Comcast agreed to acknowledge certain related party agreements between
Jones Intercable and entities controlled by Mr. Jones including: a lease,
a services agreement, an agreement with Jones Infomercial Networks, an
affiliate agreement with Galactic Radio and other transactions and
agreements described in Jones Intercable's Annual Report on Form 10-K for
the year ended December 31, 1997.
- Comcast agreed that for six years after the closing of the transactions
with BCI and Mr. Jones pursuant to the May and August 1998 agreements, it
would use its reasonable best efforts to prevent Jones Intercable from
amending or repealing the then existing indemnification rights of
officers, directors and employees of Jones Intercable.
- Comcast agreed to pay a company controlled by Mr. Jones a fee of
$1.5 million on account of financial advisory, brokerage and consulting
services performed for Jones Intercable.
On August 12, 1998, Comcast and BCI amended their May 22 agreement to
provide for an accelerated closing of its purchase of all of BCI's interests in
Jones Intercable, including BCI's option.
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<PAGE>
BCI also agreed upon the closing of the exercise of its option to cause its
nominees to the Jones Intercable Board of Directors to resign and to appoint
Comcast's designees to fill the vacancies. Comcast agreed to pay interest on the
$500 million purchase price from December 31, 1998 to the closing date.
BCI, Mr. Jones, a company controlled by Mr. Jones and Jones Intercable also
amended the existing Jones Intercable shareholders agreement. This amendment
provided that upon the closing of the purchase of BCI's interest in Jones
Intercable by Comcast, Mr. Jones's programming rights contained in the
shareholders agreement would terminate upon the payment of $25 million to
Mr. Jones. Mr. Jones and BCI also agreed to a mutual release of possible claims
against each other.
The parties closed the above-described transactions on April 7, 1999.
Comcast purchased 2,878,151 shares of Jones Intercable Common Stock and
12,782,500 shares of Jones Intercable Class A Common Stock, representing
approximately 37% of the economic interest and 47% of the voting interest in
Jones Intercable as of the closing date. Immediately upon receipt of the Jones
Intercable shares, Comcast contributed the shares to Comcast Cable
Communications, Inc., one of its wholly owned subsidiaries. The shares of Jones
Intercable Common Stock held by Comcast represent approximately 56.3% of the
outstanding shares of Common Stock, and the holders of the Common Stock voting
as a class elect approximately 75% of the Board of Directors. As a result,
Comcast now beneficially owns a sufficient number of shares to elect
approximately 75% of the Board of Directors of Jones Intercable.
Prior to the closing on April 7, 1999, Jones Intercable consummated the
following transactions with Mr. Jones or entities controlled by him:
- Jones Intercable terminated Mr. Jones' employment agreement and paid him a
severance payment of approximately $8 million, an amount equal generally
to the discounted value of the payments that would otherwise be due to him
for the remaining term of the agreement as of the closing date.
- Jones Intercable paid $25 million for the relinquishment of certain
programming rights held by Mr. Jones.
- Jones Intercable sold a plot of land to Jones Properties, Inc., a company
controlled by Mr. Jones, for approximately $700,000.
- Jones Intercable sold various office equipment, office decorations,
fitness equipment and an automobile to Jones International for
approximately $525,000.
- Jones Intercable transferred an airplane lease to a company controlled by
Mr. Jones.
Subsequent to the closing, Jones Intercable consummated the following
transactions with Mr. Jones or entities controlled by him:
- The office lease between Jones Intercable and Jones Properties and a
related sublease with Jones International were amended to provide Jones
Intercable with a right of early termination upon the payment of a
termination fee to Jones Properties, which was based on the amount of time
remaining in the term of the lease. The lease was terminated in July 1999
for a lump sum payment of $1,460,000.
- The information management and data processing services agreement between
Jones Intercable and an entity controlled by Mr. Jones was amended to
provide for its early termination upon the payment of a fee which was
based on the amount of time remaining in the term of the agreement.
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In addition, to facilitate an orderly transition of control by Comcast,
Jones Intercable established a retention and severance program for its corporate
associates who were terminated due to the change in control. The program
provided incentives to corporate associates to remain with Jones Intercable
through a transition period following the April 7, 1999 closing date. The
program provided for cash severance payments to associates who were terminated
due to the change in control.
In addition, all outstanding options granted pursuant to Jones Intercable's
1992 Stock Option Plan became vested pursuant to their terms as a result of the
change in control of Jones Intercable.
Jones Intercable incurred costs of $55.4 million related to the change in
control, which costs included those associated with severance programs, the
early termination of the information management and data processing services
agreement with a former affiliated entity and the office lease termination.
On April 7, 1999, the bylaws of Jones Intercable were amended to provide
that the Board of Directors of Jones Intercable will consist of at least eight
and no more than thirteen directors. The Board of Directors was then
reconstituted so as to have eight directors. Pursuant to the agreements among
Comcast, BCI, and Mr. Jones, on April 7, 1999, the following directors of Jones
Intercable resigned: Robert E. Cole, Josef J. Fridman, James J. Krejci, James B.
O'Brien, Raphael M. Solot, Robert Kearney, Howard O. Thrall, Siim Vanaselja,
Sanford Zisman and Glenn R. Jones. The remaining directors elected the following
persons to fill the vacancies created by such resignations: Ralph J. Roberts,
Brian L. Roberts, Lawrence S. Smith, John R. Alchin and Stanley L. Wang. All of
these newly elected directors are officers of Comcast. Also on April 7, 1999,
the following former executive officers of Jones Intercable resigned: Glenn R.
Jones, James B. O'Brien, Ruth E. Warren, Kevin P. Coyle, Cynthia A. Winning,
Elizabeth M. Steele, Wayne H. Davis and Larry W. Kaschinske. The following
persons were appointed as executive officers of Jones Intercable on April 7,
1999: Ralph J. Roberts, Brian L. Roberts, Lawrence S. Smith, John R. Alchin and
Stanley L. Wang. On July 27, 1999, the Board of Directors was reconstituted so
as to have nine rather than eight directors and Julian A. Brodsky, also an
officer of Comcast, was elected as a director to fill the vacancy created by
such expansion of the Board of Directors. Mr. Brodsky also was appointed an
executive officer of Jones Intercable on that date. After the election of
Mr. Brodsky to the Jones Intercable Board of Directors, the Jones Intercable
Board of Directors consisted of William E. Frenzel, Donald L. Jacobs and
Robert B. Zoellick, the directors elected by the holders of Class A Common
Stock, and Ralph J. Roberts, Julian A. Brodsky, Brian L. Roberts, Lawrence S.
Smith, John R. Alchin and Stanley L. Wang, the directors elected by the holders
of Common Stock.
Effective April 7, 1999, Jones Intercable entered into a management
agreement with Comcast pursuant to which Comcast will manage the operations of
Jones Intercable and its subsidiaries, subject to such direction and control of
Jones Intercable as they may reasonably determine from time to time. The
independent members of the Jones Intercable Board of Directors retained
Strategis Financial Consulting, Inc. to act as its financial advisor and Wilmer,
Cutler & Pickering to serve as its legal counsel. After negotiations with
Comcast, the independent members of the Jones Intercable Board of Directors
approved the terms of the management agreement. The management agreement
generally provides that Comcast will supervise the management and operations of
Jones Intercable's cable systems and arrange for and supervise certain
administrative functions. As compensation for such services the management
agreement provides for Comcast to charge management fees of 4.5% of gross cable
communications revenues (as defined in the agreement). During the nine months
ended September 30, 1999, Comcast charged Jones Intercable management fees of
$11.9 million.
On June 29, 1999, Comcast purchased 2,627 shares of Class A Common Stock
from Mr. Jones and 997,373 shares of Class A Common Stock from Jones
International, Ltd. for an aggregate purchase price of $131,350 and $49,868,600,
respectively. Upon the purchase of these shares of Class A Common Stock, Comcast
contributed them to Comcast Cable Communications. Upon the closing of this
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transaction, Comcast, through Comcast Cable Communications, indirectly owned a
total of 2,878,151 shares of Jones Intercable Common Stock and 13,782,500 shares
of Class A Common Stock.
On August 5, 1999, Comcast's Board of Directors voted to make an offer to
exchange 1.4 shares of Comcast Class A Special Common Stock for each share of
Jones Intercable Common Stock or Class A Common Stock for up to a number of
shares that when added to the Jones Intercable shares already owned by Comcast
would equal approximately 79% of the total of each class of Jones Intercable
stock outstanding at the time of the announcement of the exchange offer.
On August 9, 1999, Comcast publicly announced its intention to make the
exchange offer.
Due to the potential conflict of interest between Jones Intercable and
several Jones Intercable executive officers and directors who also serve as
Comcast's officers and directors and following consultation with legal counsel,
on September 17, 1999, the Jones Intercable Board of Directors established a
special committee of the independent Jones Intercable directors to assist the
Jones Intercable Board of Directors in connection with the Board's and Jones
Intercable's obligations under applicable law (including Rule 14e-2 of the
Exchange Act) with respect to the exchange offer. The members of the Jones
Intercable special committee are William E. Frenzel, Donald L. Jacobs and Robert
B. Zoellick. None of them is an officer, director or employee of Comcast. The
Jones Intercable Board of Directors authorized the special committee to
interview and retain a financial advisor to advise the special committee and the
Jones Intercable Board of Directors about the financial and market factors that
Jones Intercable should consider in responding to Comcast's exchange offer. Upon
its creation, the special committee retained Wilmer, Cutler & Pickering as its
legal counsel.
Immediately following the conclusion of the Jones Intercable Board of
Directors meeting on September 17, 1999, the special committee held an
organizational meeting with its legal counsel to discuss the functions of, and
the standards applicable to, special committees under Colorado law. At this
meeting, the special committee also determined to hire a financial advisor.
After soliciting proposals from three financial advisors, on October 1, 1999,
the special committee selected DLJ as its financial advisor. For a description
of the terms of DLJ's engagement, please refer to "Fairness Opinion of Financial
Advisor." Following its engagement, DLJ began to conduct due diligence on Jones
Intercable, Comcast and the value of the Jones Intercable Class A Common Stock,
Jones Intercable Common Stock and the Comcast Class A Special Common Stock.
On October 19, 1999, the special committee met with its legal counsel and
DLJ to consider the terms of, and develop a plan for, evaluating Comcast's
exchange offer.
On October 28, 1999, the special committee met again with its legal counsel
and DLJ at which time DLJ reported on the status of its review of Jones
Intercable and Comcast.
On November 2, 1999, the special committee held a meeting with its legal
counsel and DLJ. The special committee discussed, among other things, the
progress of DLJ's review of the businesses of Jones Intercable and Comcast.
Immediately following this special committee meeting on November 2, 1999, the
full Jones Intercable Board of Directors held a regularly scheduled meeting. At
the meeting, members of the special committee reported to the Jones Intercable
Board of Directors on the status of its evaluation of Comcast's exchange offer.
On November 10, 1999, the special committee met again with its legal counsel
and DLJ. At this meeting DLJ presented a preliminary analysis of Comcast's
exchange offer and discussed its analysis with the special committee. DLJ
presented a comparison of the exchange ratio proposed by Comcast with the range
of values that would be suggested by a number of traditional valuation
methodologies. DLJ and the special committee discussed each valuation measure in
turn and noted that the exchange ratio proposed by Comcast exceeded or was
within the suggested range of values based on the respective trading prices of
Jones Intercable Class A Common Stock, Jones Intercable Common Stock and Comcast
Class A Special Common Stock on November 9, 1999.
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DLJ also discussed with the special committee the potential reduction in
market liquidity and market demand for the Jones Intercable shares that would
remain outstanding after completion of the exchange offer. This reduction might
occur due to several factors, including the potential reduction in the number of
publicly traded Jones Intercable shares (known as the "public float"), the
potential for increased selling pressure as a result of a possible
oversubscription of the exchange offer, and the public perception of the lower
likelihood that Comcast would acquire any outstanding Jones Intercable shares in
the future. This potential reduction in liquidity and market demand would tend
to reduce the value of the Jones Intercable shares that would remain outstanding
after completion of the exchange offer.
Following the preliminary presentation by DLJ and after consultation with
legal counsel, the special committee preliminarily determined to remain neutral
with respect to Comcast's exchange offer and not recommend that Jones Intercable
shareholders accept or reject Comcast's exchange offer. The special committee
also determined to provide to the Jones Intercable shareholders additional
information based on DLJ's analysis of Comcast's exchange offer to assist
shareholders in deciding whether to accept Comcast's exchange offer. Finally,
the special committee asked DLJ to contact Comcast or its representatives to
determine whether there was any prospect of obtaining Comcast's agreement to
expand its exchange offer to include any and all Jones Intercable stock tendered
in the exchange offer. The special committee determined that expanding the offer
in this way would allow all Jones Intercable shareholders to take advantage of
the Comcast offer without the risk of proration.
On November 12, 1999, the special committee again met with its legal counsel
and DLJ. After DLJ briefly updated the special committee on the status of their
efforts to contact Comcast, the DLJ representatives excused themselves from the
meeting. The special committee and its legal counsel then proceeded to discuss
possible approaches the special committee might take in responding to Comcast's
exchange offer if Comcast did not expand or otherwise change the terms of its
exchange offer.
On November 14, 1999, representatives of DLJ discussed the possibility of
expanding Comcast's exchange offer to include all outstanding shares of Jones
Intercable with representatives of Comcast, who indicated that Comcast might
consider a proposal from the special committee for such a transaction but that
in light of the increase in value of the 1.4x exchange ratio due to the recent
rise in the price of Comcast Class A Special Common Stock, Comcast would be
unwilling to pursue such a transaction at an exchange ratio greater than 1.4x
and might indeed seek a reduction in such ratio.
On November 17, 1999, the special committee met to develop a proposal for an
alternative transaction. The special committee considered two possible
alternative transaction structures: an exchange offer for all of the Jones
Intercable stock and a negotiated merger that would result in Comcast acquiring
all of the Jones Intercable stock that it did not already own. Based upon the
financial information and advice provided by DLJ, the special committee decided
to propose to the Jones Intercable Board of Directors that the special committee
be allowed to develop a proposal for an alternative transaction and present it
to Comcast. For a discussion of the factors the special committee considered in
making the decision, see "Reasons for the Special Committee's Recommendation."
At this meeting, the special committee also considered formally proposing a
higher exchange ratio, but determined that, in light of current market
conditions and the Comcast representatives' discussions with DLJ on
November 14, 1999, doing so would likely jeopardize the special committee's
efforts to obtain Comcast's agreement to expand the offer to include all Jones
Intercable shares through a merger or exchange offer for all outstanding shares
not owned by Comcast. The special committee also determined that the tax-free
nature of a merger would result in greater value to the shareholders than the
exchange offer, even without any change in the exchange ratio. Based in part
upon preliminary discussions with DLJ, the special committee concluded that the
1.4x exchange ratio would be agreeable in a transaction that involved Comcast's
acquisition of all of the Jones Intercable stock, subject to confirmation from
an outside financial advisor that such exchange ratio was fair from a financial
point of view to the public shareholders.
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On November 19, 1999, representatives of DLJ and legal counsel to the
special committee discussed with Comcast's outside legal counsel a proposed
merger transaction that would be (1) tax-free to the Jones Intercable
shareholders, (2) approved by a majority of the Jones Intercable shareholders
not affiliated with Comcast and (3) accompanied by a fairness opinion.
On November 23, 1999, representatives of DLJ and legal counsel to the
special committee discussed with Comcast's outside legal counsel the outlines of
certain possible specific provisions of a merger agreement, including the
circumstances under which Comcast would have the right to terminate the merger
agreement, the amount of a termination fee to which Comcast would be entitled
and the circumstances under which Comcast would be entitled to receive such
termination fee, and Jones Intercable's acknowledgment that Comcast is not bound
by the restrictions on the acquisition of additional shares contained in the
Jones Intercable shareholders' agreement. The Comcast representative suggested a
termination fee of $10 million payable in the event the merger were not
consummated as a result of the special committee withdrawing its recommendation,
DLJ revoking its opinion or the Jones Intercable shareholders voting against the
merger. The parties also discussed the fact that the special committee had not
been authorized to negotiate on behalf of Jones Intercable and that the special
committee would be unable to make a formal proposal to Comcast regarding an
alternative transaction until its authority had been so expanded.
On November 26, 1999, the special committee met with its legal counsel and
DLJ to further discuss the special committee's proposal and the recent
discussions with Comcast regarding it. After consultation with its legal counsel
and DLJ, during which legal counsel to the special committee delivered an
opinion that Comcast was not bound by the Jones Intercable shareholders
agreement, the special committee generally accepted the provisions that were
discussed on November 23, 1999, but determined that the termination fee proposed
by Comcast was too high, especially if termination resulted from Jones
Intercable shareholders' rejection of the merger. On November 29, 1999, counsel
to the special committee discussed with Comcast's outside legal counsel the
special committee's views on the termination fee.
On December 9, 1999, Comcast's outside legal counsel and the special
committee's legal counsel discussed the following termination fee structure:
(1) an $8 million fee if the merger is not consummated as a result of the
special committee withdrawing its recommendation or revocation of the fairness
opinion and (2) a $2 million fee if the merger is not consummated as a result of
the Jones Intercable shareholders failing to approve the merger.
On December 13, 1999, the special committee met to consider the final terms
of its merger proposal, and based upon the financial advice of DLJ, the special
committee unanimously agreed to present formally the merger proposal to Comcast
if the special committee were authorized to do so by the Jones Intercable Board
of Directors.
On December 15, 1999, the Jones Intercable Board of Directors held a meeting
at which it approved the special committee's request that its authority be
expanded to include the authority to negotiate a transaction directly with
Comcast. The Jones Intercable Board of Directors also authorized the retention
of an independent financial advisor to provide financial advice regarding the
financial and market issues and factors the special committee should consider in
conjunction with its negotiations with Comcast, to assist the special committee
in negotiations with Comcast and to issue a fairness opinion if required.
On December 16, 1999, the special committee determined to formally engage
DLJ to negotiate the financial aspects of a proposed merger under the guidance
of the special committee and to deliver a fairness opinion.
On December 17, 1999, the special committee presented a written summary of
its merger proposal to Comcast. Later that day, Comcast proposed a form of
merger agreement incorporating all of the terms and conditions contained in the
special committee's proposal.
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On December 20 and December 21, 1999, representatives of Comcast and the
special committee and their respective legal counsel negotiated the terms of the
merger agreement, and on December 21, 1999, Comcast's outside legal counsel
delivered a revised merger agreement to the special committee's legal counsel.
On December 21, 1999, the special committee met with its legal counsel and
DLJ to review the revised draft merger agreement, DLJ's presentation to the
special committee and a draft of DLJ's opinion. For a discussion of DLJ's
opinion and a summary of its presentation to the special committee, see
"Fairness Opinion of Financial Advisor."
After discussing the terms and conditions of the definitive merger agreement
and the DLJ presentation and opinion with legal counsel, the special committee
unanimously:
- determined that the merger agreement and the transactions contemplated
therein are fair to and in the best interests of the Jones Intercable
shareholders;
- approved and adopted the merger agreement and the transactions
contemplated therein; and
- recommended that the Jones Intercable shareholders approve the merger
agreement.
Following the special committee meeting on December 21, 1999, the Jones
Intercable Board of Directors met and heard reports from the special committee
and from DLJ. Based upon their findings, the Jones Intercable Board of Directors
unanimously:
- determined that the merger agreement and the transactions contemplated
therein are fair to and in the best interests of the Jones Intercable
shareholders;
- approved and adopted the merger agreement and the transactions
contemplated therein; and
- recommended that the Jones Intercable shareholders approve the merger
agreement.
On December 22, 1999, Comcast, Comcast JOIN Holdings and Jones Intercable
executed the merger agreement. Immediately afterward, Comcast and Jones
Intercable announced the merger.
JONES INTERCABLE'S REASONS FOR THE MERGER
REASONS FOR THE SPECIAL COMMITTEE'S RECOMMENDATION
The special committee considered the factors identified below in reaching
its determination that the merger agreement was fair to, and in the best
interests of, the shareholders of Jones Intercable who are not affiliated with
Comcast and in making its recommendation that the Jones Intercable Board of
Directors approve and adopt the merger and the merger agreement and that the
Jones Intercable shareholders approve the merger and the merger agreement. In
view of the wide variety of factors it considered, the special committee did not
consider it practicable to, and did not attempt to, quantify, rank or otherwise
assign relative weights to the specific factors it considered in reaching its
determination and recommendation.
JONES INTERCABLE'S BUSINESS, CONDITION AND PROSPECTS. In evaluating the
terms and conditions of the merger, the special committee considered the
business, results of operations, financial condition, assets, liabilities,
business strategy and prospects for Jones Intercable as a stand alone company.
The members of the special committee were generally familiar with and
knowledgeable about Jones Intercable's affairs based on their experience as
directors of Jones Intercable. The special committee considered, among other
things, the historical operations and the financial performance of Jones
Intercable, the current condition of Jones Intercable's business and the cable
industry generally and Comcast's control of Jones Intercable.
OPINION OF DLJ. The special committee considered the presentation made by
its financial advisor, DLJ, and the opinion delivered by DLJ on December 21,
1999, to the effect that, as of such date and subject to the assumptions and
qualifications contained in the opinion, the consideration to be received
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by the holders of Jones Intercable shares under the merger agreement was fair
from a financial point of view to such shareholders. See "Fairness Opinion of
Financial Advisor." A copy of DLJ's opinion is attached as Appendix B to this
proxy statement/prospectus. Jones Intercable shareholders should read the DLJ
opinion in its entirety for a description of the opinion expressed, assumptions
made, matters considered and limitations of the review undertaken in connection
with the opinion.
The special committee considered the DLJ presentation and opinion to support
its recommendation. In light of the special committee's familiarity with Jones
Intercable and DLJ's responses to questions during the presentation (including
questions with respect to the valuation methods used by DLJ and the assumptions
considered and used by DLJ in its valuation analyses), the special committee
relied upon DLJ's analyses and opinion, which it found reasonable.
MERGER CONSIDERATION. The special committee determined that the
consideration that each Jones Intercable shareholder would receive in a merger
transaction supported its determination to recommend the merger. According to
the terms of the merger agreement, each share of Jones Intercable Class A Common
Stock and Common Stock will be exchanged for 1.4 shares of Comcast Class A
Special Common Stock. Based on this exchange ratio on December 21, 1999, the
merger consideration values each share of Jones Intercable at $71.40. This price
represented premiums of 60.0% and 54.8% to the Jones Intercable Common Stock and
Class A Common Stock, respectively, one day prior to the announcement of the
original exchange offer on August 6, 1999.
INDEPENDENT NEGOTIATIONS. The special committee considered as supporting
its recommendation the fact that the merger consideration was determined through
arm's length discussions and negotiations between representatives of the special
committee and the special committee's advisors, on the one hand, and
representatives of Comcast and its advisors, on the other hand, and the fact
that such negotiations resulted in an increase in the value to be received by
Jones Intercable shareholders as a result of expanding the transaction to
include all Jones Intercable shares and the tax-free nature of the transaction.
The special committee was of the view, in light of current market conditions and
the nature of discussions between its advisors and Comcast's advisors, that the
merger consideration reflected the highest price Comcast was prepared to pay and
that insistence on a higher exchange ratio would likely jeopardize the
possibility of reaching an agreement with Comcast.
TERMS OF THE MERGER AGREEMENT. The special committee considered as
supporting its recommendation the terms and conditions of the merger agreement,
including:
- the reasonably limited conditions to Comcast's obligation to consummate
the merger; and
- the fact that the merger and the merger agreement must be approved by the
holders of two-thirds of the Jones Intercable Class A Common Stock, the
holders of two-thirds of the Jones Intercable Common Stock and the holders
of a majority of those shares of Jones Intercable Class A Common Stock and
Common Stock not beneficially owned by Comcast or its affiliates.
ALTERNATIVES. The special committee considered the following possible
alternatives to the merger:
(1) Acquisition by Acquiror other than Comcast. The special committee
considered as supporting its recommendation its belief, based in part on
the views of its advisors, that it was unlikely that another entity would
seek to acquire the interest in Jones Intercable that Comcast did not
already own. The special committee believed, based on Comcast's control
of Jones Intercable, that it was unlikely that a solicitation of other
bidders at this time would result in an offer to acquire the Jones
Intercable shares not owned by Comcast at a higher price. Although the
special committee did not believe that an alternative transaction with
another acquiror was likely, the special committee recognized that one
alternative was not to recommend any transaction with Comcast.
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(2) Comcast's Exchange Offer. The special committee considered as supporting
its recommendation in favor of the merger to Jones Intercable
shareholders its analysis and evaluation of the publicly announced
exchange offer. DLJ presented to the special committee a comparison of
the exchange ratio proposed by Comcast with the range of values that
would be suggested by a number of traditional valuation methodologies.
This comparison suggested that the exchange ratio proposed by Comcast
exceeded or was within the suggested range of values based on the
respective trading prices of Jones Intercable Class A Common Stock, Jones
Intercable Common Stock and Comcast Class A Special Common Stock on
November 9, 1999.
The special committee also considered DLJ's advice that a reduction in
the liquidity and market demand for the Jones Intercable stock might
occur following completion of the exchange offer based upon several
factors. There would be a reduction in the public float because upon
completion of the exchange offer as originally announced, as little as
21% of the Jones Intercable Class A Common Stock and Jones Intercable
Common Stock would be owned by shareholders other than Comcast as
compared to the 62.7% and 43.7% respectively before the exchange offer.
Next, there would be the potential for increased selling pressure as a
result of possible oversubscription of the exchange offer. This increased
selling could occur if Jones Intercable shareholders who were unable to
tender all of their shares to Comcast attempted to sell their remaining
Jones Intercable shares in the public market soon after the close of the
exchange offer. Further, the reduction in market demand for Jones
Intercable stock could occur as a result of the public perception that
there was a lower likelihood that Comcast would acquire the remaining
outstanding shares of Jones Intercable stock that it did not own in the
short-term. Neither DLJ nor the special committee, however, could predict
the magnitude of any effect on the Jones Intercable share price based on
decreased liquidity or market demand.
(3) Alternative Transactions with Comcast. In light of (1) the low
probability of an alternative transaction with another entity and
(2) the potential negative impact on the price of Jones Intercable shares
not owned by Comcast upon completion of the exchange offer, the special
committee considered alternative transactions with Comcast that could
provide increased value to all Jones Intercable shareholders. In addition
to a negotiated merger, the special committee considered asking Comcast
to expand its exchange offer to include any and all Jones Intercable
shares tendered. With the assistance of its advisors, the special
committee determined that the primary advantages of expanding the
exchange offer in that fashion were the fact that such a transaction
might be consummated more quickly than a merger and the fact that only
those Jones Intercable shareholders who wanted to would tender their
Jones Intercable shares in the exchange offer. The special committee also
determined that this option contained the following disadvantages for
Jones Intercable shareholders:
- an exchange offer for all of the Jones Intercable stock would still
result in decreased liquidity for holders of shares not tendered in
the exchange offer;
- the consideration received in any exchange offer would generally be
taxable to the recipient;
- there would be uncertainty for holders of whatever Jones Intercable
shares remained outstanding following the closing of an expanded
exchange offer regarding whether or when Comcast would seek to
acquire such shares, and if it did so, what consideration it would
offer.
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REASONS FOR JONES INTERCABLE BOARD OF DIRECTORS' RECOMMENDATION
The Jones Intercable Board of Directors considered the factors described
under "--Reasons for the Special Committee's Recommendation" in reaching its
determination that the merger and the merger agreement are fair to and in the
best interests of the Jones Intercable shareholders who are not affiliated with
Comcast and in making its recommendation that the Jones Intercable shareholders
approve the merger and the merger agreement. The Jones Intercable Board of
Directors also considered the following:
- the fact that the merger consideration was determined through arm's length
negotiations between the special committee and Comcast;
- the special committee's report and the factors it considered;
- the recommendation by the special committee that the Jones Intercable
Board of Directors approve and adopt the merger and the merger agreement
and that the Jones Intercable shareholders approve the merger and the
merger agreement;
- the determination by the special committee that the merger and the merger
agreement are fair to and in the best interests of the Jones Intercable
shareholders who are not affiliated with Comcast; and
- DLJ's report made to the Jones Intercable Board of Directors at the
meeting held on December 21, 1999 and DLJ's opinion delivered on
December 21, 1999, to the effect that, as of such date and subject to the
assumptions and qualifications contained in the opinion, the consideration
to be received by the holders of Jones Intercable shares under the merger
agreement was fair from a financial point of view
In view of the wide variety of factors it considered, the Jones Intercable
Board of Directors did not consider it practicable to, and did not attempt to,
quantify, rank or otherwise assign relative weights to the specific factors it
considered in reaching its determination and recommendation.
RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE JONES INTERCABLE BOARD OF
DIRECTORS
At a meeting of the special committee of the independent directors of the
Jones Intercable Board held on December 21, 1999, after due consideration, the
special committee unanimously:
- determined that the terms of the merger agreement are advisable and fair
to and in the best interests of the public shareholders of Jones
Intercable without regard to Comcast's interests;
- approved and adopted the merger and the merger agreement; and
- recommended that the Jones Intercable Board of Directors and the
shareholders of Jones Intercable approve and adopt the merger and the
merger agreement.
At a meeting of the Jones Intercable Board held on December 21, 1999, after
due consideration, the Jones Intercable Board unanimously:
- determined that the terms of the merger agreement are advisable and fair
to and in the best interests of the public shareholders of Jones
Intercable without regard to Comcast's interests;
- voted to approve and adopt the merger and the merger agreement; and
- determined to recommend that the Jones Intercable shareholders approve the
merger and the merger agreement.
COMCAST'S REASONS FOR THE MERGER
Comcast considers a number of potential acquisitions of and investments in
companies in the cable television industry each year and has made such
acquisitions and investments on an opportunistic basis.
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Comcast's initial investment in obtaining control of Jones Intercable was part
of its strategy to expand its core cable business. Jones Intercable has
assembled technically advanced, well clustered cable television systems in
certain geographical areas which Comcast believes fit strategically with its
existing cable television systems. Comcast has agreed to the merger in order to
acquire all of the remaining stock of Jones Intercable that it does not already
own.
FAIRNESS OPINION OF FINANCIAL ADVISOR
The special committee engaged DLJ to act as financial advisor to the special
committee and the Jones Intercable Board of Directors in connection with a
proposed transaction involving Comcast and to evaluate the fairness from a
financial point of view of the consideration to be received by the shareholders
of Jones Intercable (other than Comcast) in any proposed transaction. On
December 21, 1999, DLJ delivered to the special committee its oral opinion,
which was later confirmed in writing, that, as of that date and based upon and
subject to the assumptions, limitations and qualifications described in the
opinion, the consideration to be received by the shareholders of Jones
Intercable other than Comcast pursuant to the merger agreement was fair from a
financial point of view.
THE FULL TEXT OF THE DLJ OPINION IS ATTACHED AS APPENDIX B TO THIS PROXY
STATEMENT/PROSPECTUS. THE SUMMARY OF THE DLJ OPINION SET FORTH IN THIS PROXY
STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF THE DLJ OPINION. JONES INTERCABLE SHAREHOLDERS ARE URGED TO READ THE DLJ
OPINION CAREFULLY AND IN ITS ENTIRETY FOR THE PROCEDURES FOLLOWED, ASSUMPTIONS
MADE, OTHER MATTERS CONSIDERED AND THE LIMITS OF THE REVIEW BY DLJ IN CONNECTION
WITH ITS OPINION.
The DLJ opinion was prepared for the special committee and the Jones
Intercable Board of Directors and addresses only the fairness from a financial
point of view, as of the date thereof, of the consideration to be received by
the Jones Intercable shareholders (other than Comcast) pursuant to the merger
agreement. The DLJ opinion does not address the relative merits of the merger
and the other business strategies being considered by the Jones Intercable Board
of Directors, or address the Board of Directors' decision to proceed with the
merger. DLJ expressed no opinion as to the prices at which the Comcast Class A
Special Common Stock will actually trade at any time. The DLJ opinion also does
not constitute a recommendation to any shareholder as to how such shareholder
should vote on the proposed merger.
Jones Intercable selected DLJ as its financial advisor because DLJ is an
internationally-recognized investment banking firm that has substantial
experience in the media and communications industries and is familiar with Jones
Intercable and its business. As part of its investment services, DLJ is
regularly engaged in the valuation of businesses and securities in connection
with mergers, acquisitions, underwritings, sales and distributions of listed and
unlisted securities, private placements and valuations for corporate and other
purposes.
In arriving at its opinion, DLJ reviewed a draft of the merger agreement and
also reviewed financial and other information that was publicly available or
furnished to DLJ by Jones Intercable and Comcast, including information provided
during discussions with the respective managements of those companies. The
information discussed with the respective managements of those companies
included certain financial projections of Jones Intercable prepared in
consultation with the management of Jones Intercable, and certain financial
projections of Comcast prepared in consultation with the management of Comcast.
In addition, DLJ compared certain financial and securities data of Jones
Intercable and Comcast with various other companies whose securities are traded
in public markets, reviewed the historical stock prices and trading volumes of
the common stock of Jones Intercable and Comcast, reviewed prices and premiums
paid in certain other business combinations, and conducted such other financial
studies, analyses, and investigations as DLJ deemed appropriate for purposes of
rendering its opinion. DLJ was not requested to, and DLJ did not, solicit the
interest of any other party in acquiring Jones Intercable.
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In rendering its opinion, DLJ relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
DLJ from public sources, that was provided to DLJ by Jones Intercable and
Comcast or their respective representatives, or that was otherwise reviewed by
DLJ. With respect to the financial projections relied on by DLJ, DLJ relied on
representations by management that they had been reasonably prepared on the
basis reflecting the best currently available estimates and in judgments of the
management of Jones Intercable and Comcast as to the future operating and
financial performance of Jones Intercable and Comcast, respectively. DLJ did not
assume any responsibility for making any independent evaluation of any assets or
liabilities or for making any independent verification of any of the information
reviewed by DLJ. DLJ relied as to certain legal matters on advice of counsel to
the special committee.
The DLJ opinion was based on economic, market, financial and other
conditions as they existed on, and on the information made available to DLJ as
of, the date of the DLJ opinion. The DLJ opinion states that, although
subsequent developments may affect its opinion, DLJ does not have any obligation
to update, revise or reaffirm its opinion.
The following is a summary of the presentation made by DLJ to the special
committee on December 21, 1999 in connection with its delivery of the DLJ
opinion:
STOCK PRICE HISTORY. To provide contextual data and comparative market
data, DLJ examined the history of the trading prices of the Jones Intercable
Class A Common Stock, the Jones Intercable Common Stock, and the Comcast
Class A Special Common Stock relative to the Standard & Poor's Industrials Index
and to an index composite of comparable cable companies for the two-year period
from December 17, 1997 through December 20, 1999. The Standard & Poor's
Industrial Index is a capitalization-weighted index of all stocks designed to
measure the performance of the industrial sector of the Standard & Poor's 500
Index. The companies included in the comparable cable company index were
Adelphia Communications Corporation, Comcast, Cox Communications, Inc.,
Cablevision Systems Corporation, Insight Communications Company, Inc., Jones
Intercable and MediaOne Group, Inc. This information was presented to provide
the special committee with background information and comparative market data
regarding the prices of the Jones Intercable Class A Common Stock, the Jones
Intercable Common Stock and the Comcast Class A Special Common Stock over the
two-year period. DLJ noted that the market price of Jones Intercable's shares
outperformed both the index composite of comparable cable companies and Comcast
Class A Special Common Stock over the two year period presented, which DLJ
attributed primarily to Comcast's investment in Jones Intercable.
HISTORICAL EXCHANGE RATIO. DLJ compared the trading price of the Jones
Intercable Class A Common Stock with the Comcast Class A Special Common Stock
over a two-year period from December 17, 1997 through December 20, 1999. DLJ
noted that, during this time period, the average ratio of the price of the Jones
Intercable Class A Common Stock to the Comcast Class A Special Common Stock was
1.19x, and that the exchange ratio in the merger is 1.4x, which exceeds the
average historical exchange ratio.
COMPARABLE COMPANIES ANALYSIS. DLJ analyzed selected historical and
projected operating information, stock market data and subscriber data for
certain publicly traded cable companies that DLJ deemed to be comparable to
Jones Intercable. These comparable cable companies included Comcast Corporation,
Cox Communications, Inc., Charter Communications, Inc., Cablevision Systems
Corporation, Adelphia Communications Corporation, Insight Communications
Company, Inc. and Classic Communications, Inc. DLJ compared the enterprise value
of each of the comparable cable companies as of December 20, 1999 to certain
selected financial data for each of these companies. DLJ defined enterprise
value as fully diluted equity value plus net debt and minority interests in
cable operations, less cash and cash equivalents, investments in unconsolidated
affiliates and the adjusted present value of other assets. In examining these
comparable cable companies, DLJ analyzed the enterprise value of the companies
as a multiple of each company's respective estimated 1999 earnings
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before interest, taxes, depreciation and amortization, or EBITDA, from its core
cable business and estimated 2000 core cable EBITDA and the enterprise value per
cable system subscriber. Estimated 1999 core cable EBITDA and estimated 2000
core cable EBITDA for Jones Intercable was provided by the management of Jones
Intercable; estimated 1999 core cable EBITDA and estimated 2000 core cable
EBITDA for Comcast was provided by the management of Comcast; and estimated 1999
core cable EBITDA and estimated 2000 core cable EBITDA for the other comparable
cable companies was developed by DLJ's equity research analysts. DLJ's analysis
of the comparable cable companies yielded the following information:
- enterprise value as a multiple of estimated 1999 core cable EBITDA ranged
from 12.9x to 22.4x for the comparable cable companies with an average of
17.6x and a median of 16.6x, compared to a value of 20.7x for Jones
Intercable as of December 20, 1999;
- enterprise value as a multiple of estimated 2000 core cable EBITDA ranged
from 11.9x to 19.9x for the comparable cable companies, with an average of
15.7x and a median of 14.9x, compared to a value of 18.4x for Jones
Intercable as of December 20, 1999; and
- enterprise value per subscriber ranged from $2,388 to $5,032 for the
comparable cable companies, with an average of $3,667 and a median of
$3,771, compared to a value of $3,982 for Jones Intercable as of
December 20, 1999.
DLJ then calculated the implied valuation ranges per share of Jones Intercable
common stock based upon the comparable cable company ranges of estimated 1999
core cable EBITDA, estimated 2000 core cable EBITDA and enterprise value per
subscriber. The implied values per share based upon estimated 1999 core cable
EBITDA ranged from $28.01 to $73.02 with an average of $50.15 and a median of
$45.78; the implied value per share based upon estimated 2000 core cable EBITDA
ranged from $30.29 to $72.98 with an average of $50.71 and a median of $46.46;
and the implied value per share based upon enterprise value per subscriber
ranged from $25.61 to $90.79 with an average of $57.15 and a median of $59.70.
PRECEDENT TRANSACTION ANALYSIS. DLJ reviewed 20 selected completed or
pending acquisitions involving companies or cable systems that DLJ deemed to be
comparable to Jones Intercable, including transactions involving:
1. Adelphia Communications Corp./Cablevision (Cleveland system);
2. Comcast/Lenfest Communications, Inc.
3. Cox Communications/Multimedia Cablevision;
4. Charter Communications/Bresnan Communications Co.;
5. Charter Communications/Avalon;
6. Cox Communications/TCA Cable
7. AT&T Corp./Lenfest Communications, Inc.;
8. AT&T Corp./MediaOne Group, Inc.;
9. Cox Communications/Media General, Inc.;
10. Insight Communications/Intermedia VI, L.P.;
11. Adelphia Communications Corp./Harron Communications Corp.'s cable
system;
12. Adelphia Communications Corp./Century Communications Corp.;
13. Adelphia Communications Corp./Frontier Vision Partners, L.P.;
14. Charter Communications/Rifkin Acquisition Partners, L.L.L.P./InterLink
Communication Partners, LLLP;
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15. Charter Communications/Tele-Communications, Inc./Intermedia IV;
16. Comcast/Prime Cable;
17. Comcast/Jones Intercable (initial Comcast acquisition);
18. Paul Allen/Charter Communications;
19. AT&T Corp./Tele-Communications Inc.; and
20. Cox Communications/Prime Cable.
In examining these transactions, DLJ reviewed the transaction value for each
acquired company or cable system, the number of subscribers of the acquired
company or cable system, and the estimated EBITDA of the acquired company or
cable system for the first full fiscal year following the announcement date of
the transaction (based on industry sources), and calculated for each transaction
the multiple of estimated EBITDA implied by the transaction value and the
transaction value per subscriber. In performing these analyses, DLJ defined
transaction value as the value of the total consideration offered for the target
company (including any debt assumed by the acquiror). The multiples of
transaction value of estimated EBITDA for the comparable transactions ranged
from 12.7x to 22.6x, with a mean of 16.0x and a median value of 14.0x.
Transaction value per subscriber for the comparable transactions ranged from
$2,979.2 to $5,500.0, with a mean of $3,917.6 and a median value of $3,795.1.
DLJ then calculated ranges of implied enterprise value and implied equity
value per share by applying Jones Intercable's estimated 2000 EBITDA and its
number of cable subscribers to the comparable multiples derived from the
comparable transactions. DLJ calculated ranges of implied equity value per share
of Jones Intercable common stock of $34.63 to $87.75, with an average of $52.17,
based upon transaction value as a multiple of estimated EBITDA, and $40.22 to
$102.38, with an average of $63.36, based on transaction value per subscriber.
DISCOUNTED CASH FLOW ANALYSIS. DLJ performed a discounted cash flow
analysis for the period commencing December 31, 1999 and ending December 31,
2004 for Jones Intercable, based on the assumption that cash flows are
recognized in the middle of each fiscal year, using projections and assumptions
provided by management of Jones Intercable. DLJ's discounted cash flow
calculation is an analysis of the present value of projected unlevered free cash
flows and an estimated terminal year enterprise value using the discount rates
and terminal year EBITDA multiples indicated below. The discounted cash flow
value per share of Jones Intercable common stock was estimated using weighted
average cost of capital discount rates ranging from 9.6% to 11.4% and terminal
multiples of estimated EBITDA for Jones Intercable at December 31, 2004 ranging
from 12.0x to 14.0x. This analysis yielded a range of implied value per share of
Jones Intercable common stock of $36.71 to $53.03.
PREMIUMS PAID ANALYSIS. DLJ examined 83 squeeze-out transactions, including
those involving the payment of stock consideration, cash consideration and dual
consideration, which DLJ deemed to be comparable. DLJ determined the implied
premium over the common stock trading prices as of one day, one week and one
month prior to the announcement date of each transaction. The mean premiums for
all of the selected transactions as of one day, one week and one month prior to
the announcement date were 23.6%, 23.9% and 27.2%, respectively. DLJ then
compared these premiums with those implied by Comcast's offer one day, one week
and one month prior to the announcement of (i) Comcast's original offer on
August 9, 1999 for Jones Intercable's Class A Common Stock and Common Stock and
(ii) Comcast's offer on December 20, 1999 for Jones Intercable's Class A Common
Stock and Common Stock. Based upon the Jones Intercable Class A Common Stock
price one day prior to the original announcement date (August 6, 1999) and the
mean premiums paid over the common stock trading prices one day, one week and
one month prior to the announcement date of 22 precedent all-stock squeeze-out
transactions, DLJ calculated a range of implied prices per share of Jones
Intercable Class A Common Stock of $53.18 to $55.77. This range is above the
implied value of
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$50.31 for Comcast's original offer (based on August 6 closing prices), but
below the implied value of $69.65 for the merger (based on December 20 closing
prices).
VALUATION OF COMCAST. DLJ also performed various valuation analyses of
Comcast.
DLJ performed a comparable companies analysis for Comcast similar to that
performed for Jones Intercable and described above. The publicly traded cable
companies that DLJ deemed to be comparable to Comcast were the same as those
used in the analysis of Jones Intercable, but excluding Comcast and including
Jones Intercable.
DLJ calculated the implied valuation ranges per share of Comcast Class A
Common Stock based upon the comparable cable company ranges of estimated 1999
core cable EBITDA, estimated 2000 core cable EBITDA and enterprise value per
subscriber. The implied value per share of Comcast Class A Special Common Stock
based upon estimated 1999 core cable EBITDA ranged from $31.65 to $49.75 with an
average of $40.08; the implied value per share of Comcast Class A Special Common
Stock based upon estimated 2000 core cable EBITDA ranged from $32.57 to $49.75
with an average of $40.32; and the implied value per share of Comcast Class A
Special Common Stock based upon enterprise value per subscriber ranged from
$27.29 to $47.25 with an average of $36.88. DLJ considered the average and the
high end of the range to be the most appropriate when implying a value for
Comcast's shares.
DLJ also performed a discounted cash flow analysis on Comcast similar that
performed for Jones Intercable and described above. The discounted cash flow per
share of Comcast Class A Special Common Stock was estimated using weighted
average cost of capital discount rates ranging from 9.2% to 11.0% and terminal
multiples of estimated EBITDA for Comcast ranging from 12.0x to 14.0x. This
analysis yielded a range of implied value per share of Comcast Class A Special
Common Stock of $53.71 to $64.29.
The summary set forth above does not purport to be a complete description of
the analyses performed by DLJ but describes, in summary form, the material
elements of the presentation made by DLJ to the special committee on
December 21, 1999. The preparation of a fairness opinion involves various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of these methods to the particular circumstances
and, therefore, such an opinion is not readily susceptible to summary
description. Each of the analyses conducted by DLJ was carried out in order to
provide a different perspective to the special committee regarding the merger
and to add to the total mix of information available. DLJ did not form a
conclusion as to whether any individual analysis, considered in isolation,
supported or failed to support an opinion as to fairness from a financial point
of view. Rather, in reaching its conclusions DLJ considered the results of the
analyses in light of each other and ultimately reached its opinion based on the
results of all analyses undertaken in connection with its opinion taken together
as a whole. Accordingly, notwithstanding the separate factors summarized above,
DLJ has indicated to the special committee and the Jones Intercable Board of
Directors that it believes that its analyses must be considered as a whole and
that selecting portions of its analyses and the factors considered by it,
without considering all analyses and factors, could create an incomplete view of
the evaluation process underlying its opinion. The analyses performed by DLJ are
not necessarily indicative of actual values or future results, which may be
significantly more or less favorable than suggested by such analyses.
Jones Intercable and the special committee initially engaged DLJ to serve as
financial advisor to the special committee and the Jones Intercable Board of
Directors with respect to financial and market issues and factors that Jones
Intercable should consider in conjunction with Jones Intercable's response to
Comcast's exchange offer. Under the terms of its engagement agreement dated
October 25, 1999, Jones Intercable agreed to pay DLJ a fee of $1,000,000 payable
at the time DLJ notified the special committee that it was prepared to deliver
its study of the exchange offer. In addition, Jones Intercable agreed to
reimburse DLJ, upon request by DLJ from time to time, for its out-of-pocket
expenses,
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including the reasonable fees and expenses of counsel (subject to a maximum),
incurred by DLJ in connection with its engagement, and to indemnify DLJ and
certain related persons against certain liabilities in connection with the
engagement, including liabilities under U.S. federal securities laws.
Following the expansion of the special committee's authority to negotiate an
alternative transaction with Comcast, the special committee and the Jones
Intercable Board of Directors engaged DLJ to act as its financial advisor in
connection with a proposed transaction with Comcast. Under the terms of a second
engagement agreement dated December 16, 1999, Jones Intercable agreed to pay
(a) a fee of $1,000,000 payable at the time DLJ notified the special committee
that it was prepared to deliver an opinion regarding the fairness from a
financial point of view of the consideration to be received by the shareholders
of Jones Intercable and (b) additional cash compensation equal to $3,750,000
less 50% of the fee described in clause (a) above, payable upon the consummation
of the merger. DLJ will only receive the $1,000,000 fee provided for in the
October 25, 1999 engagement agreement if it does not receive the cash
compensation described in clause (b) of the preceding sentence.
DLJ and the Jones Intercable special committee negotiated the terms of the
fee arrangement, and the Jones Intercable Board of Directors was aware of such
arrangements, including the fact that a significant portion of the aggregate fee
payable to DLJ is contingent upon consummation of the merger.
In the ordinary course of business, DLJ and its affiliates may own or
actively trade the securities of Jones Intercable and Comcast for their own
accounts and for the accounts of their customers and, accordingly, may at any
time hold a long or short position in Jones Intercable and Comcast securities.
CONSEQUENCES OF THE MERGER
Following approval of the merger agreement and the fulfillment or waiver of
the conditions to the parties' obligations contained in the merger agreement,
Jones Intercable will be merged into Comcast JOIN Holdings. Comcast JOIN
Holdings will continue as the surviving corporation of the merger. In the
merger, outstanding shares of Jones Intercable (other than shares directly held
by Comcast, Comcast JOIN Holdings or shares held as treasury stock by Jones
Intercable) will be converted into the right to receive 1.4 shares of Comcast
Class A Special Common Stock. All Jones Intercable shares currently owned by
Comcast are held indirectly by Comcast through a wholly owned subsidiary and
therefore will be converted into shares of Comcast Class A Special Common Stock
in the merger. Upon completion of the merger, Jones Intercable shares will no
longer exist and its successor by merger, Comcast JOIN Holdings, will be a
wholly owned subsidiary of Comcast. Following the merger, the former holders of
Jones Intercable will no longer directly share in the future earnings or growth
of Jones Intercable or directly benefit from any increases in the value of Jones
Intercable, and will no longer bear directly the risk of any decreases in the
value of Jones Intercable.
After completion of the merger, Jones Intercable shares will no longer be
listed on the Nasdaq National Market.
Jones Intercable Common Stock and Class A Common Stock are currently
registered under the Securities Exchange Act of 1934. Registration of the Jones
Intercable Common Stock and Class A Common Stock under the Exchange Act will be
terminated and Jones Intercable will be relieved of the obligation to comply
with certain public reporting requirements of the Exchange Act, including the
obligation to comply with certain proxy rules of Regulation 14A under
Section 14.
At the effective time of the merger, unexercised options to purchase Jones
Intercable Class A Common Stock under stock option plans in which certain Jones
Intercable employees participate may be exercised by such persons, and any
options which remain unexercised at the effective time of the merger will be
terminated. See "The Merger Agreement--Treatment of Stock Options."
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The directors and officers of Jones Intercable immediately prior to the
merger will be replaced immediately after the merger with the directors and
officers of Comcast JOIN Holdings. The Certificate of Incorporation and Bylaws
of Comcast JOIN Holdings in effect at the effective time of the merger will be
the Certificate of Incorporation and Bylaws of the surviving corporation
immediately after the merger.
LISTING OF COMCAST CLASS A SPECIAL COMMON STOCK
Comcast intends to file an application to list on the Nasdaq National Market
the shares of Comcast Class A Special Common Stock to be issued in the merger.
The listing of the shares of Comcast Class A Special Common Stock to be issued
in the merger is a condition to the merger.
NO DISSENTERS' RIGHTS
Colorado law provides dissenters' rights to shareholders of Colorado
corporations in certain situations. However, such dissenters' rights are not
available to shareholders of a corporation:
- whose securities are listed on a national securities exchange or on the
national market system of the National Association of Securities Dealers
Automated Quotation System, or were held of record by more than two
thousand shareholders; and
- whose shareholders are not required to accept in exchange for their shares
anything other than shares in another corporation listed on a national
securities exchange or on the national market system of the National
Association of Securities Dealers Automated Quotation System, or will be
held of record by more than two thousand shareholders or cash in lieu of
fractional shares.
Due to the following factors, shareholders of Jones Intercable will not have
dissenters' rights with respect to the merger:
- shares of Jones Intercable Common Stock and Class A Common Stock are
traded on the Nasdaq National Market;
- Jones Intercable shareholders are being offered shares of Comcast Class A
Special Common Stock, which is also traded on the Nasdaq National Market;
and
- Jones Intercable shareholders are being offered cash only in lieu of
fractional shares.
ACCOUNTING TREATMENT
The merger will be accounted for by Comcast as a step-acquisition under the
purchase method of accounting. Under this method of accounting, the assets and
liabilities of Jones Intercable not previously owned by Comcast or its
affiliates will be recorded at their fair value, and any excess of Comcast's
purchase price over the fair value of Jones Intercable's tangible net assets not
previously owned by Comcast or its affiliates will be recorded as intangible
assets, including goodwill.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following discussion of the material U.S. federal income tax
consequences of the merger to the holders of Jones Intercable shares and to
Jones Intercable, Comcast and Comcast JOIN Holdings is based upon the opinion of
Dechert Price & Rhoads, counsel to Comcast. The opinion is based upon current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing regulations thereunder, current administrative rulings and court
decisions, all of which are subject to change. No attempt has been made to
comment on all U.S. federal income tax consequences of the merger that may be
relevant to particular holders, including holders that are subject to special
tax rules, such as dealers in securities, foreign persons, mutual funds,
insurance companies, tax-exempt entities, persons holding Jones Intercable
shares or Comcast Class A Special Common Stock as part of a hedging, straddle,
conversion or other transaction, holders whose functional currency is not the
U.S. dollar, holders subject to the U.S. alternative minimum tax, holders who
acquired Jones Intercable
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shares pursuant to an employee stock option or otherwise as compensation, and
holders who do not hold their shares as capital assets. HOLDERS OF JONES
INTERCABLE SHARES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER IN LIGHT OF THEIR PERSONAL
CIRCUMSTANCES AND THE CONSEQUENCES UNDER APPLICABLE U.S. STATE AND LOCAL AND
FOREIGN TAX LAWS.
Comcast has received an opinion from its counsel, Dechert Price & Rhoads, to
the effect that the merger will be treated for U.S. federal income tax purposes
as a reorganization within the meaning of section 368(a) of the Code for both
Comcast and Jones Intercable. In rendering its opinion, Dechert Price & Rhoads
has assumed that the merger will be completed in the manner described in the
merger agreement and this proxy statement/prospectus and has relied upon
representations made by Comcast and Jones Intercable including those in the
merger agreement. However, no ruling has been or will be sought from the
Internal Revenue Service as to the U.S. federal income tax consequences of the
merger. Accordingly, there can be no assurances that the Internal Revenue
Service will not contest these conclusions or that a court will not sustain such
contest.
Assuming the merger is treated as a reorganization within the meaning of
Section 368(a) of the Code:
- no gain or loss will be recognized for U.S. federal income tax purposes by
Jones Intercable, Comcast or Comcast JOIN Holdings as a result of the
merger;
- holders of Jones Intercable shares who exchange their shares solely for
shares of Comcast Class A Special Common Stock will not recognize gain or
loss on the exchange of such shares in the merger;
- the aggregate tax basis of the Comcast Class A Special Common Stock
received by holders of Jones Intercable shares will be the same as the
aggregate tax basis of Jones Intercable shares exchanged in the merger,
reduced by the amount of cash received and increased by the amount of gain
recognized in the merger;
- the holding period of the Comcast Class A Special Common Stock will
include the holding period of the Jones Intercable shares exchanged in the
merger, provided that such shares of Jones Intercable shares are held as
capital assets at the time of the merger; and
- holders of Jones Intercable shares who receive cash in lieu of a
fractional share of Comcast Class A Special Common Stock will recognize
gain or loss equal to the difference, if any, between the amount of cash
received and their tax basis in the fractional share interest.
Under the Code, a holder of Jones Intercable shares may be subject, under
certain circumstances, to backup withholding at a rate of 31% with respect to
the amount of cash, if any, received in the merger (including cash received in
lieu of fractional shares) unless the holder provides proof of an applicable
exemption or correct taxpayer identification number and otherwise complies with
applicable requirements of the backup withholding rules. Any amounts withheld
under the backup withholding rules are not additional tax and may be refunded or
credited against the holder's U.S. federal income tax liability, so long as the
required information is furnished to the Internal Revenue Service.
REGULATORY MATTERS; LITIGATION
HSR ACT AND ANTITRUST
In connection with the earlier agreements among Comcast, Jones Intercable
and BCI Telecom Holding described in "The Merger--Background of the Merger,"
Comcast and Jones Intercable observed the notification and waiting period
requirements of the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder. The HSR Act
provides for an initial 30-calendar-day waiting period following the filing with
the U.S. Federal Trade Commission and the Antitrust Division of the U.S.
Department of Justice of Notification
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and Report Forms by the parties to a transaction involving the transfer of
specified amounts of voting securities.
On August 25, 1998, Comcast and Jones Intercable filed the Notification and
Report Forms with the Antitrust Division and the FTC for review in connection
with Comcast's original investment in Jones Intercable. The waiting period under
the HSR Act expired on September 15, 1998, and no further filing is required in
connection with the merger.
Notwithstanding expiration of the waiting period and the transfer of control
of Jones Intercable to Comcast on April 7, 1999, the FTC, the Antitrust Division
and others could take action under the antitrust laws to challenge the merger,
including seeking to enjoin the consummation of the merger, seeking the
divestiture by Comcast of all or part of the stock or assets of Jones Intercable
or of other business conducted by Comcast, or seeking to subject Comcast to
certain operating conditions, before or after the merger is consummated. There
can be no assurance that a challenge to the merger will not be made or that, if
such a challenge is made, Comcast will prevail.
FEDERAL, STATE AND LOCAL GOVERNMENTAL AUTHORITIES
In addition, in connection with Comcast's acquisition of a controlling
interest in Jones Intercable, Comcast was required to obtain approvals from the
FCC. Comcast's acquisition of a controlling interest in Jones Intercable was
also subject to certain state and local governmental approvals or actions.
Comcast received all material FCC and state and local franchise approvals
relating to the closing of the acquisition of Comcast's controlling interest in
Jones Intercable prior to the closing.
Comcast does not believe that approvals from the FCC are required in order
to complete the merger, since it already owns a controlling interest in Jones
Intercable. However, it may be necessary to obtain the approval of the proposed
merger from certain governmental authorities, including cable television
franchising authorities and state and local regulatory authorities.
Comcast and Jones Intercable intend to file applications and formal
notifications in connection with the merger with various state and local
franchising authorities. The filings seek the level of review appropriate under
each state's laws or local franchise authority's franchise agreement.
In addition, third parties may advocate to various state and local franchise
authorities that must consent to the merger that such state or local franchise
authorities impose that Comcast and Jones Intercable unbundle their cable
facilities and make them available to competitors as a condition to their
approval. Comcast and Jones Intercable firmly believe that such action by a
state or local franchise authority would be unlawful as a result of, among other
things, preemption by the Communications Act of 1934, as amended. However, there
can be no assurance that franchise authorities will not seek to impose such a
condition. The imposition of such a condition could reduce the economic benefits
to the combined company of the merger. Comcast and Jones Intercable intend to
contest any such conditions imposed by state or local franchise authorities. If
these types of conditions were imposed and if it were ultimately determined that
Comcast's or Jones Intercable's failure to comply with any such conditions were
unlawful, the combined company could face financial penalties or potential loss
of the applicable franchise.
A condition to Comcast's obligation to complete the merger is that all
required U.S., state and local governmental authorizations be obtained, without
limitations or conditions, unless the failure to obtain such authorizations and
the limitations or conditions placed on the authorizations, individually or in
the aggregate, would not be reasonably expected to result in a material adverse
effect on the surviving corporation of the merger. See "The Merger
Agreement--Conditions to the Completion of the Merger."
As a result, depending on the nature of any conditions imposed by franchise
authorities, these conditions could jeopardize or delay completion of the
merger. In addition, if Comcast decides to
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complete the merger notwithstanding any conditions imposed by franchising
authorities, the expected benefits of the merger may be reduced.
FOREIGN REGULATORY FILINGS
Comcast is not aware of any foreign governmental approvals or actions that
may be required for consummation of the merger. Should any other approval or
action be required, Comcast currently contemplates that such approval or action
would be sought.
LITIGATION
After the public announcement of Comcast's previously proposed exchange
offer, four putative class action complaints were filed against Jones
Intercable, Comcast, and certain directors and officers of Jones Intercable and
Comcast and certain former directors and officers of Jones Intercable,
respectively captioned Susser v. Jones, et al., Famet v. Jones, et al., Harbor
Finance Partners Ltd. v. Jones, et al., and Harbor Finance Partners Ltd. v.
Frenzel, et al., in the District Court, City and County of Denver, State of
Colorado (Cases Nos. 99 CV 5119, 99 CV 5132, 99 CV 2568 and 99 CV 7150). In the
suits, each respective plaintiff alleges, among other things, that the
defendants violated their fiduciary duties with respect to the proposed exchange
offer. The complaints purport to be brought on behalf of all nonaffiliated
shareholders of Jones Intercable. The plaintiffs seek, among other things, to
have the court certify a class, enjoin Comcast's previously proposed exchange
offer, and award monetary damages. Comcast considered the actions to be
premature and without merit when filed and considers them to be without merit
and moot at this time in light of the merger now being proposed in place of the
exchange offer.
PLANS FOR JONES INTERCABLE AFTER THE MERGER
Comcast has not, as of the date of this proxy statement/prospectus, approved
any specific plans or proposals involving Jones Intercable after the merger.
However, Comcast does intend to integrate the assets of Jones Intercable into
Comcast's existing operations.
CONDUCT OF THE BUSINESS OF COMCAST AND JONES INTERCABLE IF THE MERGER IS NOT
CONSUMMATED
If the merger is not consummated, Comcast and Jones Intercable expect that
Jones Intercable will continue to be controlled by Comcast. The businesses of
Comcast and Jones Intercable would probably continue substantially as currently
conducted pursuant to the management agreement described in the section entitled
"--Material Contracts between Comcast and Jones Intercable."
If the merger is not consummated, Comcast may purchase additional Jones
Intercable shares on terms more or less favorable to the holders of the
nonaffiliated shares than the terms contained in the merger agreement or sell
Jones Intercable shares, from time to time, at prices deemed acceptable to
Comcast, pursuant to a merger transaction, tender offer, and open market or
privately negotiated transactions or otherwise. However, currently Comcast has
not made any decision about any future transactions if the merger is not
consummated.
FEDERAL SECURITIES LAWS CONSEQUENCES
This proxy statement/prospectus does not cover any resales of Comcast
Class A Special Common Stock to be received by Jones Intercable shareholders
upon the effective time of the merger and no person is authorized to make any
use of this proxy statement/prospectus in connection with any such resale.
All shares of Comcast Class A Special Common Stock received by Jones
Intercable shareholders in the merger will be freely transferable, except that
shares of Comcast Class A Special Common Stock received by persons who are
deemed to be "affiliates" of Jones Intercable for purposes of the Rule 145 under
the Securities Act at the time of the Jones Intercable special meeting may be
resold by them
41
<PAGE>
only in transactions permitted by Rule 145 under the Securities Act or as
otherwise permitted under the Securities Act. Persons who may be deemed to be
affiliates of Jones Intercable for such purposes generally include individuals
or entities that control, are controlled by or are under common control with
Jones Intercable and include directors and executive officers of Jones
Intercable. Pursuant to the merger agreement, Jones Intercable will deliver to
Comcast a letter identifying all persons that may be deemed affiliates of Jones
Intercable. The merger agreement requires Jones Intercable to use its best
efforts to obtain from each such affiliate a written agreement to the effect
that such persons will not offer, sell or otherwise dispose of any of the shares
of Comcast Class A Special Common Stock issued to them in the merger in
violation of the Securities Act or the related SEC rules.
COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION
The following table sets forth the high and low prices on the Nasdaq
National Market for a share of Comcast Class A Special Common Stock, Jones
Intercable Common Stock and Jones Intercable Class A Common Stock, and, in the
case of Comcast Class A Special Common Stock, the dividends declared for the
indicated periods. Jones Intercable has never paid any cash dividends with
respect to its Common Stock or Class A Common Stock. The prices are as reported
in published financial sources.
<TABLE>
<CAPTION>
JONES
INTERCABLE
COMCAST -------------------
CLASS A CLASS A
------------------------------ COMMON COMMON
SPECIAL COMMON STOCK(1) STOCK STOCK
------------------------------ ------------------- -------------------
HIGH LOW DIVIDEND HIGH LOW HIGH LOW
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1997
First Quarter................................. $ 9 11/16 $ 8 7/16 $0.012 $10 7/8 $ 9 1/2 $11 $ 9 1/8
Second Quarter................................ 11 1/8 7 5/16 0.012 13 7/8 9 1/4 13 3/8 8 1/4
Third Quarter................................. 12 7/8 9 7/8 0.012 13 1/2 10 3/4 13 11/16 10 1/2
Fourth Quarter................................ 16 9/32 12 51/64 0.012 17 1/2 12 1/8 18 1/8 12 3/8
1998
First Quarter................................. $18 19/32 $14 15/16 $0.012 $17 3/4 $13 7/8 $18 1/4 $14 3/8
Second Quarter................................ 20 27/32 16 29/32 0.012 26 3/8 17 1/8 26 7/8 17 1/8
Third Quarter................................. 24 3/8 18 11/16 0.012 31 1/8 22 31 1/4 21 1/8
Fourth Quarter................................ 29 1/2 20 9/32 0.012 35 7/16 22 1/4 35 7/8 21 7/8
1999
First Quarter................................. $38 9/16 $29 5/8 $43 3/8 $34 $44 $33 7/8
Second Quarter................................ 42 29 7/16 56 7/8 40 1/2 58 40 23/32
Third Quarter................................. 41 9/16 32 5/8 53 1/4 43 1/4 54 1/16 43 7/8
Fourth Quarter................................ 56 1/2 35 11/16 75 47 75 7/8 48
2000
First Quarter through January 24, 2000........ $54 3/8 $44 13/16 $74 5/8 $60 3/4 $74 3/4 $61 1/4
</TABLE>
- ------------------------
(1) Share price and dividend per share have been adjusted to reflect a
two-for-one stock split in the form of a 100% stock dividend of Comcast
Class A Special Common Stock effective May 5, 1999.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the recommendation of the Jones Intercable Board in favor of
the merger, shareholders should be aware that certain members of the Jones
Intercable Board and Jones Intercable's management are affiliated with Comcast
and may have interests in the merger that are different from, and in addition
to, the interests of Jones Intercable shareholders. The Jones Intercable Board
of Directors was aware of such interests and considered them, among other
matters, when voting to approve the merger.
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<PAGE>
INDEMNIFICATION AND INSURANCE OF JONES INTERCABLE DIRECTORS AND OFFICERS
Comcast has agreed that:
- it will, or will cause the surviving corporation of the merger to,
indemnify and advance expenses, including fees of counsel, to present
directors and officers of Jones Intercable and its subsidiaries, with
respect to any claim brought within the applicable statute of limitations
relating thereto, for liabilities from their acts or omissions in those
capacities occurring before or after the effective time of the merger to
the extent provided under the Jones Intercable articles of incorporation
and bylaws and applicable law;
- for six years after the effective time of the merger it will, or will
cause the surviving corporation of the merger to, provide officers' and
directors' liability insurance covering acts or omissions occurring prior
to the effective time of the merger by each person currently covered by
Jones Intercable's officers' and directors' liability insurance policy.
This Comcast or surviving corporation policy must be no less favorable
than the Jones Intercable policy in effect, except that Comcast is
obligated to pay, or to cause the surviving corporation to pay, in the
aggregate, no more than 200% of the annual premium paid by Jones
Intercable for such insurance; and
- the certificate of incorporation and bylaws of the surviving corporation
in the merger will contain provisions relating to indemnification that are
no less favorable with respect to indemnification than are set forth in
Jones Intercable's Articles of Incorporation and Bylaws. These
indemnification provisions will not be amended, repealed or otherwise
modified for six years after the effective time of the merger if such
modification would adversely affect the rights of the individuals who were
directors and officers of Jones Intercable immediately prior to the
effective time of the merger.
MATERIAL CONTRACTS BETWEEN COMCAST AND JONES INTERCABLE
MANAGEMENT AGREEMENT. Effective April 7, 1999, Jones Intercable entered
into a management agreement with Comcast pursuant to which Comcast will manage
the operations of Jones Intercable and its subsidiaries, subject to such
direction and control of Jones Intercable as it may reasonably determine from
time to time. The terms of the management agreement were approved by the
independent members of Jones Intercable's Board of Directors. The management
agreement generally provides that Comcast will supervise the management and
operations of Jones Intercable's cable systems and arrange for and supervise
certain administrative functions. As compensation for such services the
management agreement provides for Comcast to charge management fees of 4.5% of
gross cable communications revenues (as defined in the agreement). During the
nine months ended September 30, 1999, Comcast charged Jones Intercable
management fees of $11.9 million.
On behalf of Jones Intercable, Comcast will seek and secure long-term
programming contracts that generally provide for payment based on either a
monthly fee per subscriber per channel or a percentage of certain subscriber
revenues. Amounts charged to Jones Intercable by Comcast for programming (the
"Programming Charges") are made in an amount equal to the sum of (i) the actual
cost incurred by Comcast plus (ii) one-half of the difference between the cost
Jones Intercable would pay in an arm's length transaction if Jones Intercable
were a stand-alone multiple cable communications systems operator with a
subscriber base equal to that of Jones Intercable's cable systems, and the
actual cost incurred by Comcast. The Programming Charges are included in
operating expenses in Jones Intercable's condensed consolidated statement of
operations and accumulated deficit. Jones Intercable purchases certain other
services, including insurance, from Comcast under cost-sharing arrangements on
terms that reflect Comcast's actual cost. Jones Intercable reimburses Comcast
for certain other costs (primarily salaries) under cost-reimbursement
arrangements. Under all of these arrangements, Jones Intercable incurred total
expenses of $74.4 million, including $72.9 million of Programming Charges,
during the nine months ended September 30, 1999.
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<PAGE>
The management agreement also provides that Comcast will not enter into any
agreements or transactions or obtain any services on behalf of Jones Intercable
or its cable systems with or from any of Comcast's affiliates other than those
specifically provided for in the management agreement without the prior written
consent of Jones Intercable, except for agreements or transactions on terms that
are no less favorable to Jones Intercable than those that might be obtained at
the time from a person or entity that is not affiliated with Comcast in an arm's
length transaction. Further, the management agreement provides that without the
prior written consent of Jones Intercable, Comcast will not change the
independent auditor of Jones Intercable or change its independent auditor such
that Comcast and Jones Intercable have the same independent auditor.
Jones Intercable will have the right to terminate the management agreement
effective as of April 7, 2004 by written notice to Comcast no later than
January 7, 2004, and if no such notice is given, the management agreement shall
automatically terminate on April 7, 2009.
E! ENTERTAINMENT TELEVISION
E! Entertainment Television is an affiliate of Comcast that provides cable
television programming. During the nine months ended September 30, 1999, Jones
Intercable made payments to E! Entertainment Television totaling $370,000 for
programming provided to cable systems owned by Jones Intercable.
QVC, INC.
Comcast, on behalf of Jones Intercable, has an affiliation agreement with
QVC to carry its programming. In return for carrying QVC programming, Jones
Intercable receives an allocated portion, based upon market share, of a
percentage of net sales of merchandise sold to QVC customers located in Jones
Intercable's service area. For the nine months ended September 30, 1999, Jones
Intercable's subscriber service fees revenue includes approximately $808,000
relating to QVC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
Jones Intercable's Common Stock or Class A Common Stock as of the record date
(unless otherwise noted) by persons (including any group of persons) known to
Jones Intercable to be beneficial owners of more than 5% of either class of
stock, the directors of Jones Intercable, and the current executive officers and
directors of Jones Intercable as a group. Under the rules of the Securities and
Exchange Commission, a person (or group of persons) is deemed to be a
"beneficial owner" of a security if he or she, directly or indirectly, has or
shares the power to vote or to direct the voting of such security, or the power
to dispose of or to direct the disposition of such security. Accordingly, more
than one person may be deemed to be a beneficial owner of the same security. A
person is also deemed to be a beneficial owner of any security which that person
has the right to acquire within 60 days.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL
BENEFICIAL OWNER(1) TITLE OF CLASS OWNERSHIP(2)(3) PERCENT OF CLASS (3)
- -------------------------------------- --------------------- --------------- --------------------
<S> <C> <C> <C>
Comcast Corporation Common Stock 2,878,151(4) 56.3%
1500 Market Street Class A Common Stock 13,782,500(4) 37.3%
Philadelphia, PA 19102
Comcast Cable Common Stock 2,878,151(4) 56.3%
Communications,Inc. Class A Common Stock 13,782,500(4) 37.3%
1201 Market Street
Wilmington, DE 19801
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL
BENEFICIAL OWNER(1) TITLE OF CLASS OWNERSHIP(2)(3) PERCENT OF CLASS (3)
- -------------------------------------- --------------------- --------------- --------------------
<S> <C> <C> <C>
Capital Research and Class A Common Stock 3,265,000(5) 8.8%
Management Company
333 South Hope Street
Los Angeles, CA 90071
William E. Frenzel Class A Common Stock 1,000 Less than 1%
1775 Massachusetts Ave., N.W.
Washington, D.C. 20036
Robert B. Zoellick Class A. Common Stock 300 Less than 1%
1800 K Street, N.W.
Washington, D.C. 20006
All current executive officers and Common Stock 0 0
directors of Jones Intercable as a Class A Common Stock 1,300 Less than 1%
group (9 persons)
</TABLE>
- ------------------------
(1) Directors and executive officers not listed individually in this beneficial
ownership table do not own any of Jones Intercable's shares. All information
in the table is as of the record date unless otherwise noted.
(2) Unless otherwise noted, all persons indicated in the table have full voting
and investment power with respect to the share ownership described.
(3) This information is based upon representations given to Jones Intercable by
the shareholders and/or filings made by the shareholders with the Securities
and Exchange Commission, copies of which were provided to Jones Intercable.
(4) Comcast acquired its shares of Jones Intercable Common Stock on April 7,
1999 and it acquired its shares of Jones Intercable Class A Common Stock on
April 7, 1999 and June 29, 1999. Comcast has contributed all of its shares
in Jones Intercable to Comcast Cable Communications, Inc. Comcast and
Comcast Cable Communications, Inc. have sole voting and dispositive power
over these shares. At December 31, 1999, Sural Corporation ("Sural"), a
Delaware corporation, owned 9,444,375 shares of Comcast's outstanding
Class B Common Stock and 136,913 shares of Comcast's outstanding Class A
Common Stock. Mr. Brian L. Roberts, President of Jones Intercable and of
Comcast, 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 Comcast's Class B Common Stock and Class A Common Stock owned
by Sural, and he is deemed to be the beneficial owner of 1,356 shares of
Class A Common Stock owned by his wife, as to which he disclaims beneficial
ownership. Since each share of Comcast's Class B Common Stock is entitled to
fifteen votes, the shares of Comcast's Class A Common Stock and Comcast's
Class B Common Stock owned by Sural and Mr. Brian L. Roberts constitute
approximately 85% of the voting power of the two classes of Comcast's voting
Common Stock combined. Comcast's Class B Common Stock is convertible on a
share-for-share basis into Comcast's Class A Common Stock or Comcast's
Class A Special Common Stock. If Sural and Mr. Brian L. Roberts were to
convert Comcast's Class B Common Stock which they are deemed to beneficially
own into Comcast's Class A Common Stock, Mr. Roberts would beneficially own
9,582,644 shares of Comcast's Class A Common Stock (approximately 27% of
Comcast's Class A Common Stock).
(5) Capital Research and Management Company is a registered investment adviser
that manages The American Funds Group of mutual funds. It does not own any
shares of Jones Intercable for its own account and it accordingly has no
voting power over the 3,265,000 shares of Class A Common Stock. The security
ownership of Capital Research and Management Company is as of December 31,
1998, as reported to Jones Intercable on the shareholder's Schedule 13G.
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<PAGE>
MANAGEMENT OF JONES INTERCABLE AND THE SURVIVING CORPORATION
The directors and officers of Jones Intercable will be replaced at the
effective time of the merger with the directors and officers of Comcast JOIN
Holdings who are in office at the effective time of the merger and who are
designees of Comcast.
THE MERGER AGREEMENT
MATERIAL PROVISIONS OF THE MERGER AGREEMENT
The following includes a description of material provisions of the merger
agreement and is qualified in its entirety by reference to the merger agreement,
a copy of which is attached as Appendix A and is incorporated by reference.
STRUCTURE OF THE MERGER
Under the terms of the merger agreement, Jones Intercable will merge with
and into Comcast JOIN Holdings with Comcast JOIN Holdings continuing as the
surviving corporation.
MERGER CONSIDERATION
In the merger, each share of Jones Intercable Common Stock and Class A
Common Stock issued and outstanding immediately prior to the effective time of
the merger (other than shares directly owned by Comcast or Comcast JOIN Holdings
and other than shares held by Jones Intercable as treasury shares) shall be
cancelled and shall be converted automatically into the right to receive 1.4
shares of Comcast Class A Special Common Stock, par value $1.00 per share of
Comcast. All Jones Intercable shares currently owned by Comcast are held
indirectly by Comcast through a wholly owned subsidiary and therefore will be
converted into shares of Comcast Class A Special Common Stock in the merger.
Each share of Jones Intercable Common Stock and Class A Common Stock issued
and outstanding immediately prior to the effective time of the merger directly
owned by Comcast or Comcast JOIN Holdings, and each share that is owned by Jones
Intercable as treasury stock will be canceled in the merger and no payment or
distribution shall be made with respect to those shares.
The merger consideration may be adjusted to reflect fully the effect of any
stock split, reverse stock split, stock dividend, recapitalization or other like
change without receipt of consideration with respect to either the Jones
Intercable shares or the Comcast Class A Special Common Stock occurring on or
after the date of the merger agreement, and prior to the effective time of the
merger.
EFFECTIVE TIME
The effective time of the merger will occur upon the filing of the Articles
of Merger with the Secretary of the State of Colorado and the Certificate of
Merger with the Secretary of the State of Delaware. The Articles of Merger and
Certificate of Merger will be filed after the approval of the merger and the
merger agreement by the shareholders of Jones Intercable at the special meeting,
and after the other conditions to the consummation of the merger have been
satisfied or waived. See "--Conditions to the Completion of the Merger."
EXCHANGE AND PAYMENT PROCEDURES
As soon as practicable after the effective time of the merger, the exchange
agent, EquiServe Trust Company, N.A., will mail to each record holder, other
than Comcast and Comcast JOIN Holdings, of an outstanding certificate or
certificates representing Jones Intercable Common Stock or Class A Common Stock
as of the effective time of the merger, a letter of transmittal and
instructions. The
46
<PAGE>
letter of transmittal will be used to surrender such certificates in exchange
for the merger consideration. Upon surrender to the paying agent of a
certificate representing Jones Intercable shares, together with such letter of
transmittal, duly executed, the holder of such certificate shall be entitled to
receive the merger consideration. Until surrendered in accordance with the
foregoing instructions, each certificate representing Jones Intercable shares
will represent for all purposes only the right to receive the merger
consideration.
Shareholders of Jones Intercable should not send their Jones Intercable
share certificates now and should send them only pursuant to instructions set
forth in letters of transmittal to be mailed to Jones Intercable shareholders as
soon as practicable after the merger. The merger consideration will be provided
only in accordance with the procedures set forth in this proxy
statement/prospectus and such letters of transmittal.
We recommend that certificates for Jones Intercable Common Stock and
Class A Common Stock and letters of transmittal be transmitted only by
registered United States mail, return receipt requested, appropriately insured.
Holders of Jones Intercable shares whose certificates are lost will be required,
at the holder's expense, to furnish a lost certificate affidavit and bond
acceptable to the paying agent.
Any merger consideration not validly claimed by shareholders of Jones
Intercable will be subject to surrender to governmental entities pursuant to
applicable abandoned property, escheat or similar laws. Neither the paying agent
nor any party to the merger agreement will be liable to any holder of
certificates formerly representing Jones Intercable shares for any amount paid
to any such governmental entity.
Any questions concerning payment procedures and requests for letters of
transmittal may be addressed to the exchange agent at EquiServe Trust Company,
N.A., 525 Washington Blvd., Jersey City, NJ 07310.
TRANSFER OF JONES INTERCABLE COMMON SHARES
No transfer of Jones Intercable shares will be made on the stock transfer
books of Jones Intercable after the close of business on the day immediately
before the merger. If, on or after the merger, certificates for Jones Intercable
shares are presented, they will be canceled and exchanged for the merger
consideration as provided in the preceding section of this proxy
statement/prospectus.
TREATMENT OF JONES INTERCABLE STOCK OPTIONS
As of the effective time of the merger, by virtue of the merger and without
any action on the part of holders thereof, any unexercised options which have
been granted under Jones Intercable's 1992 Stock Option Plan may be exercised by
the holders of such options in accordance with the Jones Intercable stock option
plan. All options which remain unexercised at the effective time of the merger
will expire in accordance with the Jones Intercable stock option plan.
At least three days before the anticipated effective time of the merger,
Comcast will deliver to each holder of a Jones Intercable option an appropriate
notice setting forth the holder's rights with respect to such Jones Intercable
options and will notify each holder that the Jones Intercable options may be
exercised conditioned upon the occurrence of the effective time of the merger
and that any Jones Intercable options not exercised at the effective time of the
merger will expire.
NO DISSENTERS' RIGHTS
No dissenters' rights are available to Jones Intercable shareholders in
connection with the merger under Colorado law.
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<PAGE>
PRINCIPAL COVENANTS
Each of Jones Intercable, Comcast and Comcast JOIN Holdings has undertaken a
number of covenants in the merger agreement. The following summarizes the more
significant of these covenants.
INTERIM OPERATIONS
Jones Intercable has agreed to certain restrictions on it and its
subsidiaries until the effective time of the merger. Jones Intercable and its
subsidiaries are required to conduct their business in the ordinary course
consistent with past practice, to use all reasonable efforts to preserve intact
and keep available their business organizations, services of key personnel and
relationships with third parties, and not take any action that would make its
representations and warranties untrue in any material respect.
REGISTRATION STATEMENT
Each of Jones Intercable and Comcast has agreed to jointly prepare and file
with the SEC as promptly as practicable after the execution by the merger
agreement a preliminary proxy statement relating to the merger and the merger
agreement. Comcast will prepare and file with the SEC a registration statement
on Form S-4, in which this proxy statement shall be included as a prospectus.
Comcast will use reasonable best efforts to cause the registration statement to
be declared effective under the Securities Act as soon as practicable after such
filing, and will take all actions required under applicable federal or state
securities laws in connection with the issuance of Comcast's shares of Class A
Special Common Stock in the merger.
COVENANT TO RECOMMEND
The transaction disclosure documents, which include this proxy statement and
the registration statement, will include the recommendation of the special
committee and the Board of Directors of Jones Intercable in favor of approval of
the merger agreement (except that the special committee may withdraw, modify or
refrain from making such recommendation to the extent that the special committee
determines in good faith after consultation with outside legal counsel that
failure to withdraw, modify or refrain from making such recommendation would
constitute a breach of the special committee's fiduciary duties under applicable
law).
MEETING OF JONES INTERCABLE SHAREHOLDERS
Promptly after the date of the merger agreement, Jones Intercable will take
all action necessary in accordance with the Colorado Business Corporation Act
(the "CBCA") and the Articles of Incorporation and the Bylaws of Jones
Intercable to convene a meeting of its shareholders for the purpose of obtaining
Jones Intercable shareholder approvals. Jones Intercable will use its reasonable
best efforts to solicit from its shareholders proxies in favor of the approval
of the merger agreement and the merger, and will take all other action necessary
or advisable to secure the vote or consent of its shareholders required by the
CBCA to obtain such approvals. Comcast shall vote, or cause to be voted, all of
the shares then owned by it and any of its subsidiaries in favor of the approval
of the merger agreement and the merger.
ACCESS TO INFORMATION
From the date of the merger agreement to the effective time of the merger,
Jones Intercable and its officers, directors, employees, auditors and agents
will not impede the access of Comcast and Comcast JOIN Holdings or their
officers, directors, employees, auditors and agents at all reasonable times to
the officers, employees, agents, properties, offices, plants and other
facilities, books and records of Jones Intercable and its subsidiaries, and will
furnish Comcast and Comcast JOIN Holdings
48
<PAGE>
with financial, operating and other data and information as Comcast or Comcast
JOIN Holdings, through its officers, directors, employees, auditors or agents,
may reasonably request.
NOTIFICATION OF CERTAIN MATTERS
Jones Intercable will give prompt notice to Comcast, and Comcast will give
prompt notice to Jones Intercable, of the occurrence, or nonoccurrence, of any
event which would be likely to cause any representation or warranty contained in
the merger agreement to be untrue or inaccurate.
COMMERCIALLY REASONABLE EFFORTS
Comcast and Jones Intercable have agreed to cooperate with each other and
use commercially reasonable efforts to take all actions and do all things
necessary or advisable under the merger agreement and under applicable law to
complete the merger and the other transactions contemplated by the merger
agreement.
SHAREHOLDER LITIGATION
Jones Intercable will give Comcast the opportunity to participate in the
defense or settlement of any shareholder litigation against Jones Intercable and
its directors relating to the transactions contemplated by the merger agreement
including the cases styled Susser v. Jones, et al., Famet v. Jones, et al.,
Harbor Finance Partners Ltd. v. Jones, et al., and Harbor Finance Partners Ltd.
v. Frenzel, et al., all pending in the District Court, City and County of
Denver, State of Colorado (Cases Nos. 99 CV 5119, 99 CV 5132, 99 CV 2568 and
99 CV 7150). Jones Intercable may not settle these cases without Comcast's
consent.
PUBLIC ANNOUNCEMENTS
Comcast and Jones Intercable will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
merger or the merger agreement and will not issue any such press release or make
any such public statement prior to such consultation, except as may be required
by law or any listing agreement with a national securities exchange to which
Comcast or Jones Intercable is a party.
AFFILIATES
At least 30 days prior to the effective time of the merger, Jones Intercable
and Comcast will agree as to persons (other than Comcast and its affiliates) who
are, at the time the merger is submitted for approval to the shareholders of
Jones Intercable, "affiliates" of Jones Intercable for purposes of Rule 145
under the Securities Act. Jones Intercable has agreed to use its best efforts to
cause each such person to deliver to Comcast on or prior to the effective time
of the merger a letter to the effect that such person will not offer to sell,
sell or otherwise dispose of any shares of Comcast Class A Special Common Stock
issued in the merger, except pursuant to an effective registration statement, in
compliance with Rule 145, as amended from time to time, or in a transaction
which, in the opinion of legal counsel satisfactory to Comcast, is exempt from
the registration requirements of the Securities Act.
REPRESENTATIONS AND WARRANTIES
The merger agreement contains substantially reciprocal representations and
warranties made by Comcast and Comcast JOIN Holdings on the one hand, and Jones
Intercable on the other hand. The most significant of these relate to:
- corporate existence and authorization to enter into the contemplated
transaction;
49
<PAGE>
- organization and standing;
- governmental approvals required in connection with the contemplated
transaction;
- absence of any breach of organizational documents, law or certain material
agreements as a result of the contemplated transaction except with respect
to receipt of any applicable franchise approvals and FCC consents;
- capitalization;
- filings with the SEC; and
- financial statements.
Comcast and Comcast JOIN Holdings represented to Jones Intercable that
Comcast JOIN Holdings was formed solely for the purpose of engaging in the
transactions contemplated by the merger agreement, that all of the outstanding
capital stock of Comcast JOIN Holdings will be owned directly by Comcast through
the effective time of the merger, and that Comcast JOIN Holdings will not incur
any liabilities through the effective time of the merger. Comcast and Comcast
JOIN Holdings further represented that none of the information they supplied for
inclusion or incorporation by reference in the registration statement will
contain any untrue statement of a material fact.
Jones Intercable represented to Comcast and Comcast JOIN Holdings that:
- at a meeting duly called and held on December 21, 1999, the special
committee has unanimously:
- determined that the merger and the merger agreement are fair to and in
the best interests of the shareholders of Jones Intercable,
- approved and adopted the merger and the merger agreement, and
- recommended that the shareholders of Jones Intercable approve and adopt
the merger and the merger agreement;
- at a meeting duly called and held on December 21, 1999, the Board of
Directors of Jones Intercable has unanimously:
- determined that the merger and the merger agreement are fair to and in
the best interests of the shareholders of Jones Intercable,
- approved and adopted the merger and the merger agreement, and
- recommended that the shareholders of Jones Intercable approve and adopt
the merger and the merger agreement;
- DLJ delivered its fairness opinion to the special committee and the Board
of Directors of Jones Intercable on December 21, 1999.
Jones Intercable further represented that, except for any conflict, defaults
or violations that would not have a material adverse effect on Jones Intercable,
or prevent or materially delay the performance by Jones Intercable of any of its
obligations under the merger agreement, neither it nor any or its subsidiaries
is in conflict with, or in default or violation of:
- any law applicable to Jones Intercable or any of its subsidiaries or by
which any property or asset of it or any of its subsidiaries is bound or
affected; and
- any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which it or any of
its subsidiaries is a party or by which Jones Intercable or any of its
subsidiaries or any property or asset of it or any of its subsidiaries is
bound or affected.
50
<PAGE>
The representations and warranties in the merger agreement will not survive
the closing of the merger or termination of the merger agreement.
CONDITIONS TO THE COMPLETION OF THE MERGER
The obligations of Comcast, Comcast JOIN Holdings and Jones Intercable to
effect the merger are subject to the satisfaction of the following conditions,
unless waived in writing by all parties:
- Jones Intercable shareholder approvals shall have been obtained;
- no temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the merger shall
be in effect;
- all actions by or in respect of or filings with any governmental body,
agency, official or authority required to permit the consummation of the
merger shall have been obtained or made;
- the registration statement (as amended or supplemented) shall have become
effective under the Securities Act and shall not be subject to any stop
order, and no action, suit, proceeding or investigation by the Commission
seeking a stop order or to suspend the effectiveness of the registration
statement shall have been initiated or threatened. Comcast shall have
received all state securities law or blue sky permits and authorizations
necessary to issue the merger consideration as contemplated hereby and
such permits and authorizations shall be in full force and effect; and
- the shares of Class A Special Common Stock to be issued in the merger
shall have been authorized for listing on the Nasdaq National Market
subject only to official notice of issuance.
The obligations of Comcast and Comcast JOIN Holdings to effect the merger
are subject to the satisfaction of the following conditions, unless waived by
Comcast and Comcast JOIN Holdings:
- there shall not have been threatened, instituted or be pending any action,
proceeding, application or counterclaim by any governmental entity or by
any other person before any court or governmental regulatory or
administrative agency, authority or tribunal:
- challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain, prohibit or enjoin or make more costly
the consummation of the merger and the other transactions contemplated by
the merger agreement;
- seeking to obtain any material damages directly or indirectly relating to
the consummation of the merger and the other transactions contemplated by
the merger agreement;
- seeking to prohibit or limit the ownership or operation by Jones
Intercable, Comcast, Comcast JOIN Holdings or any of their subsidiaries
of all or any portion of their business or assets, or to compel Jones
Intercable, Comcast, Comcast JOIN Holdings or any of their subsidiaries
to dispose of or hold separate all or any portion of their businesses or
assets, as a result of the merger and the other transactions contemplated
by the merger agreement;
- seeking to impose or confirm limitations on the ability of Comcast or
Comcast JOIN Holdings or any of their affiliates to exercise effectively
full rights of ownership of any shares or any securities of the surviving
corporation of the merger, including, without limitation, the right to
vote any shares or any securities of the surviving corporation of the
merger on all matters properly presented to Jones Intercable's or the
surviving corporation's shareholders, including, without limitation, the
approval and adoption of the merger and the merger agreement by Jones
Intercable's shareholders;
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- seeking to require divestiture by Comcast or Comcast JOIN Holdings or any
of their affiliates or subsidiaries of any shares or any securities of
the surviving corporation of the merger; or
- having a material adverse effect on Jones Intercable, Comcast or Comcast
JOIN Holdings if adversely determined or inhibiting the ability of any
party to the merger agreement to perform its obligations thereunder;
- there shall not have been any order or injunction issued, or any law
enacted, enforced, promulgated, amended, issued or deemed applicable to
Comcast, Comcast JOIN Holdings, Jones Intercable or any subsidiary or
affiliate of Comcast, Comcast JOIN Holdings or Jones Intercable which has
resulted, or is reasonably likely to result, directly or indirectly, in
any of the consequences referred to above;
- there shall not have occurred any change, condition, event or development
that has a material adverse effect on Jones Intercable since the date of
the merger agreement;
- the special committee and the Board of Directors of Jones Intercable each
shall not have amended, withdrawn or modified in a manner adverse to
Comcast or Comcast JOIN Holdings its adoption or recommendation of the
merger or the merger agreement, or resolved to do any of the foregoing;
- the fairness opinion of DLJ shall not have been amended, withdrawn or
modified in a manner adverse to Comcast or Comcast JOIN Holdings;
- the representations and warranties of Jones Intercable in the merger
agreement which are qualified as to materiality shall be true and correct
and the representations or warranties that are not so qualified shall be
true and correct in all material respects;
- Jones Intercable shall have performed in all material respects all
obligations required to be performed by it under the merger agreement;
- all FCC consents and franchise approvals shall have been obtained, be in
effect and be subject to no limitations, conditions, restrictions or
obligations, except for such consents the failure to obtain would not, and
such limitations, conditions, restrictions or obligations as would not,
individually or in the aggregate, be reasonably expected to have a
material adverse effect on the surviving corporation of the merger;
- no court, arbitrator or governmental entity shall have issued any order,
and there shall not be any statute, rule or regulation restraining or
prohibiting the effective operation of the business of Comcast and its
subsidiaries or Jones Intercable and its subsidiaries after the effective
time of the merger that would be reasonably expected to have a material
adverse effect on Comcast or the surviving corporation of the merger.
The obligations of Jones Intercable to effect the merger are subject to the
satisfaction of the following conditions, unless waived by Jones Intercable:
- the representations and warranties of Comcast and Comcast JOIN Holdings
which are qualified as to materiality shall be true and correct and the
representations and warranties that are not so qualified shall be true and
correct in all material respects;
- Comcast and Comcast JOIN Holdings shall have performed in all material
respects all obligations required to be performed by them under the merger
agreement;
- there shall not have been any threatened, instituted or be pending any
action, proceeding, application or counterclaim by any governmental entity
or by any other person before any court or governmental regulatory or
administrative agency, authority or tribunal which would be reasonably
expected to have a material adverse effect on Comcast;
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- there shall not have been any order or injunction, or any law enacted,
entered, enforced, promulgated, amended, issued or deemed applicable to
Comcast, Comcast JOIN Holdings, or Jones Intercable which has resulted, or
is reasonably likely to result in a material adverse effect on Comcast;
and
- no court, arbitrator or governmental entity shall have issued any order,
and there shall not be any statute, rule or regulation restraining or
prohibiting the effective operation of the business of Comcast or Jones
Intercable after the effective time of the merger that would be reasonably
expected to have a material adverse effect on Comcast.
INDEMNIFICATION AND INSURANCE OF JONES INTERCABLE DIRECTORS AND OFFICERS
Comcast has agreed that:
- it will, or will cause the surviving corporation of the merger to,
indemnify and advance expenses, including fees of counsel, to present
directors and officers of Jones Intercable and its subsidiaries, with
respect to any claim brought within the applicable statute of limitations
relating thereto, for liabilities from their acts or omissions in those
capacities occurring before or after the effective time of the merger to
the extent provided under the Jones Intercable articles of incorporation
and bylaws and applicable laws;
- for six years after the effective time of the merger it will, or will
cause the surviving corporation of the merger to, provide officers' and
directors' liability insurance covering acts or omissions occurring prior
to the effective time of the merger by each person currently covered by
Jones Intercable's officers' and directors' liability insurance policy.
This Comcast or surviving corporation policy must be no less favorable
than the Jones Intercable policy in effect, except that Comcast is
obligated to pay, or to cause the surviving corporation to pay, in the
aggregate, no more than 200% of the annual premium paid by Jones
Intercable for such insurance; and
- the certificate of incorporation and bylaws of the surviving corporation
in the merger will contain provisions relating to indemnification that are
no less favorable with respect to indemnification than are set forth in
Jones Intercable's Articles of Incorporation and Bylaws. These
indemnification provisions will not be amended, repealed or otherwise
modified for six years after the effective time of the merger if such
modification would adversely affect the rights of the individuals who were
directors and officers of Jones Intercable immediately prior to the
effective time of the merger.
TERMINATION OF THE MERGER AGREEMENT
RIGHT TO TERMINATE
The merger agreement may be terminated at any time prior to the effective
time of the merger in any of the following ways, even if it was previously
approved by Jones Intercable shareholders:
- The merger agreement may be terminated by the mutual written consent of
Comcast and Jones Intercable.
- The merger agreement may be terminated by any of Comcast, Comcast JOIN
Holdings or Jones Intercable if:
- any court of competent jurisdiction or other governmental entity shall
have issued an order, decree, ruling or taken any other action
restraining, enjoining or otherwise prohibiting the merger and such
order, decree, ruling or other action shall have become final and
nonappealable;
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- the effective time for the merger shall not have occurred on or before
December 31, 2000; provided, however, that the right to terminate the
merger agreement shall not be available to any party whose failure to
fulfill any obligation under the merger agreement has been the primary
cause of, or resulted in, the failure of the effective time of the merger
to occur on or before such date; or
- the merger and the merger agreement shall fail to be approved and adopted
by the requisite majority of the shareholders of Jones Intercable at the
Jones Intercable shareholders' meeting called for such purpose.
- The merger agreement may be terminated by either Comcast or Comcast JOIN
Holdings if:
- the special committee shall have amended, withdrawn or modified in a
manner adverse to Comcast or Comcast JOIN Holdings its approval or
recommendation of the merger or the merger agreement or shall have
resolved to do any of the foregoing or if the fairness opinion from DLJ
shall have been amended, withdrawn or modified in a manner adverse to
Comcast or Comcast JOIN Holdings;
- any conditions required to be fulfilled by Jones Intercable shall have
become incapable of fulfillment and shall not have been waived by Comcast
and Comcast JOIN Holdings; or
- Jones Intercable shall breach in any material respect any of its
representations, warranties or obligations under the merger agreement and
such breach shall not have been cured in all material respects or waived
by Comcast or Comcast JOIN Holdings and Jones Intercable shall not have
provided reasonable assurance to Comcast and Comcast JOIN Holdings that
such breach will be cured in all material respects on or before the
effective time, but Comcast or Comcast JOIN Holdings may terminate the
merger agreement only if such breach, singly or together with all other
such breaches, constitutes a failure of the conditions required to be
fulfilled by Jones Intercable.
- The merger agreement may be terminated by Jones Intercable if:
- any of the conditions required to be fulfilled by Comcast or Comcast JOIN
Holdings shall not have been waived by the Jones Intercable; or
- Comcast or Comcast JOIN Holdings shall breach in any material respect any
of their respective representations, warranties or obligations under the
merger agreement and such breach shall not have been cured in all
material respects or waived by Jones Intercable and Comcast or Comcast
JOIN Holdings, as the case may be, shall not have provided reasonable
assurance to Jones Intercable that such breach will be cured in all
material respects on or before the effective time of the merger, only if
such breach, singly or together with all other such breaches, constitutes
a failure of the condition required to be fulfilled by Comcast or Comcast
JOIN Holdings.
TERMINATION FEES PAYABLE BY JONES INTERCABLE
In the event the merger agreement is terminated:
- because the special committee has amended or withdrawn in a manner
adverse to Comcast its recommendation of the merger,
- because DLJ has amended or withdrawn in a manner adverse to Comcast its
fairness opinion, or
- under circumstances where Comcast or Comcast JOIN Holdings had the right
to terminate the merger agreement pursuant to such provisions,
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then upon such termination, Jones Intercable shall pay to Comcast
$8,000,000. In the event the $8,000,000 payment is not payable and the merger
agreement is terminated because the requisite shareholder approval is not
obtained or under circumstances where Comcast or Comcast JOIN Holdings had the
right to terminate the merger agreement pursuant to such provision, then upon
such termination, Jones Intercable shall pay to Comcast $2,000,000.
AMENDMENT AND WAIVER
Any provision of the merger agreement may be amended prior to the effective
time of the merger if the amendment is acted upon by the board of directors of
each of Jones Intercable, Comcast JOIN Holdings and Comcast and is set forth in
writing. Any provision of the merger agreement may be waived by a party by
action of its board of directors prior to the effective time of the merger if
the waiver is in writing and signed by the party against whom the waiver is to
be effective. After Jones Intercable shareholders have approved the adoption of
the merger agreement, no amendment or waiver that requires further approval by
Jones Intercable shareholders may be made without the approval of Jones
Intercable shareholders.
GENERAL PROVISIONS
In consideration of the agreement and covenants of Comcast and Comcast JOIN
Holdings contained in the merger agreement, Jones Intercable acknowledged and
agreed that Comcast and Comcast JOIN Holdings are not parties to the Jones
Intercable shareholders' agreement and are not bound by, or subject to, the
terms and conditions contained in such agreement.
THE MEETING AND VOTING
INFORMATION ABOUT THE MEETING AND VOTING
The Jones Intercable Board is using this document to solicit proxies from
the holders of Jones Intercable common stock for use at the Jones Intercable
meeting. We are first mailing this proxy statement/prospectus and accompanying
form of proxy to Jones Intercable shareholders on or about January 27, 2000.
MATTERS RELATING TO THE MEETING
TIME AND PLACE
The meeting will be held on March 2, 2000 at 10:00 a.m. Eastern time, at
1500 Market Street, Philadelphia, PA 19102.
PURPOSE OF MEETING IS TO VOTE ON THE FOLLOWING ITEMS
At the special meeting, the shareholders of Jones Intercable will be asked
to approve the merger and the merger agreement and to transact such other
business as may properly come before the special meeting or any postponements or
adjournments thereof.
RECORD DATE
The record date for shares entitled to vote is January 24, 2000.
OUTSTANDING SHARES HELD ON RECORD DATE
As of the record date, there were outstanding 5,113,021 shares of Jones
Intercable Common Stock and 36,937,420 shares of Jones Intercable Class A Common
Stock held by 522 and 1,159 shareholders of record, respectively.
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LIST OF SHAREHOLDERS
A list of Jones Intercable shareholders entitled to vote at the meeting will
be available for inspection by any shareholder for purposes germane to the
meeting during normal business hours beginning on the earlier of ten days prior
to the date of the special meeting and two days after notice of the special
meeting is sent. The shareholders list will be available at the offices of Jones
Intercable at 1500 Market Street, Philadelphia, PA 19102. This list will also be
available for inspection by shareholders present at the meeting.
SHARES ENTITLED TO VOTE
Shares entitled to vote are Jones Intercable Common Stock and Class A Common
Stock held at the close of business on the record date, January 24, 2000.
Shares held by Jones Intercable in its treasury are not voted.
QUORUM REQUIREMENT
A quorum of shareholders is necessary to hold a valid meeting. A majority of
the votes entitled to be cast on the matter by the voting group constitutes a
quorum of that voting group for action on that matter. Abstentions and broker
"non-votes" count as present for establishing a quorum. Shares held by Jones
Intercable in its treasury are not counted as outstanding for quorum or voting
purposes. A broker "non-vote" occurs on an item when a broker is not permitted
to vote on that item without instruction from the beneficial owner of the shares
and no instruction is given.
REPRESENTATIVES OF ARTHUR ANDERSEN LLP
Representatives of Arthur Andersen LLP are expected to be present at the
meeting. These representatives will have the opportunity to make a statement if
they desire to do so and are expected to be available to respond to appropriate
questions.
VOTE NECESSARY TO APPROVE MERGER PROPOSAL
Approval of the merger requires the affirmative vote of:
- the holders of two-thirds of the outstanding shares of Jones Intercable
Common Stock voting as a single class,
- the holders of two-thirds of the outstanding shares of Jones Intercable
Class A Common Stock voting as a single class, and
- the holders of a majority of the outstanding shares of Common Stock and
Class A Common Stock that are not beneficially owned by Comcast or its
affiliates voting together as a single class with each share being
entitled to one vote for the purpose of this approval.
The failure to vote, a vote to abstain or a broker non-vote has the same
effect as a vote against the adoption of the merger agreement.
If your broker holds your shares in its name, your broker may not vote your
shares on the merger proposal absent instructions from you. Without your voting
instructions, a broker non-vote will occur on the merger proposal and will have
the effect of a vote against the adoption of the merger agreement.
As of the date of this proxy statement/prospectus, Comcast, through a
wholly-owned subsidiary, indirectly owned 2,878,151 shares of Jones Intercable
Common Stock and 13,782,500 shares of Jones Intercable Class A Common Stock
representing approximately 56.3% and 37.3% of each respective
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class. Comcast has agreed to vote its shares in favor of approval of the merger
and the merger agreement.
As of the record date, the directors and executive officers of Jones
Intercable owned and were entitled to vote an aggregate additional 1,300 shares
of Jones Intercable Class A Common Stock, or less than 1% of the outstanding
shares of Jones Intercable Class A Common Stock. These individuals have
indicated that they will vote in favor of approval of the merger and the merger
agreement.
RECOMMENDATION OF THE SPECIAL COMMITTEE AND BOARD OF DIRECTORS OF JONES
INTERCABLE
The special committee of the independent members of the Board of Directors
has unanimously approved and adopted the merger and the merger agreement. After
receiving the recommendation of the special committee, the Board of Directors of
Jones Intercable has unanimously approved and adopted the merger and the merger
agreement. The special committee and the Jones Intercable Board of Directors
each recommends that you vote in favor of the proposal.
PROXIES
VOTING YOUR PROXY
You may vote in person at your meeting or by proxy. We recommend you vote by
proxy even if you plan to attend your meeting. You can always change your vote
at the meeting.
Voting instructions are included on your proxy card. If you properly give
your proxy and submit it to us in time to vote, one of the individuals named as
your proxy will vote your shares as you have directed.
HOW TO VOTE BY PROXY
You may vote by proxy by completing, signing, dating and returning your
proxy card in the enclosed envelope.
If you hold your shares through a broker or other custodian, you should
check the voting form used by that firm to see if it offers telephone or
Internet voting.
If any other matters are properly presented at the special meeting for
consideration, the persons named in the enclosed form of proxy, and acting under
that proxy, will have discretion to vote on such matters in accordance with
their best judgment, unless authorization to use that discretion is withheld.
If you submit your written proxy but do not make specific choices, your
proxy will follow the Board's recommendations and vote your shares FOR the
merger proposal.
REVOKING YOUR PROXY
You may revoke your proxy before it is voted by:
- sending in a new proxy with a later date which is received by Jones
Intercable prior to the special meeting;
- notifying the Secretary in writing before the meeting that you have
revoked your proxy; or
- voting in person at the meeting.
VOTING IN PERSON
If you plan to attend the meeting and wish to vote in person, we will give
you a ballot at the meeting. However, if your shares are held in the name of
your broker, bank or other nominee, you
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must bring a proxy from your nominee authorizing you to vote your "street name"
shares on January 24, 2000, the record date for voting.
PEOPLE WITH DISABILITIES
We can provide reasonable assistance to help you participate in the meeting
if you tell us about your disability and your plan to attend. Please call or
write to the Secretary of Jones Intercable at least two weeks before the meeting
at the number or address included under "Where You Can Find More Information."
401(K) PLAN PARTICIPANTS
If you participate in the Comcast Corporation Retirement-Investment Plan,
you may vote an amount of shares of Jones Intercable Class A Common Stock
equivalent to the interest in Jones Intercable Class A Common Stock credited to
your account as of the record date. You may vote by instructing the trustee of
the plan, Putnam Fiduciary Trust Company, through MIS Corporation, the trustee's
proxy tabulator, at P.O. Box 9116, Hingham, Massachusetts 02043-9891 by using
the proxy card that is enclosed with this document. The trustee will vote your
shares in accordance with your duly executed instructions received by
February 24, 2000. If you do not send instructions, the share equivalents
credited to your account will not be voted. Participants may also remove
previously given instructions by February 24, 2000 by filing with the trustee
either a written notice of revocation or a properly completed and signed proxy
card bearing a later date.
SOLICITATION OF PROXIES
Jones Intercable will pay the costs of soliciting proxies.
In addition to this mailing, Jones Intercable, directors, officers and
employees may solicit proxies personally, electronically or by telephone. Jones
Intercable is paying D.F. King & Co., Inc. a fee of $7,500 plus expenses to help
with the solicitation. D.F. King & Co. may be contacted at 77 Water Street, New
York, NY 10005. The telephone number for banks and brokers is (212) 269-5550
(call collect) and for all others is (800) 207-3156.
The extent to which these proxy soliciting efforts will be necessary depends
entirely upon how promptly proxies are submitted. You should submit your proxy
by mail without delay. We also reimburse brokers and other nominees for their
expenses in sending these materials to you and obtaining your voting
instructions.
Do not send in any stock certificates with your proxy cards. The exchange
agent will mail transmittal forms with instructions for the surrender of stock
certificates for Jones Intercable stock to Jones Intercable shareholders as soon
as practicable after the completion of the merger.
ADJOURNMENTS
Adjournments may be made for the purpose of, among other things, soliciting
additional proxies. An adjournment may be made from time to time by the chairman
of the meeting or by approval of the holders of shares representing a majority
of the votes present in person or by proxy at the meeting, whether or not a
quorum exists, without further notice other than by an announcement made at the
meeting. No proxies voted against approval of the merger and the merger
agreement by Jones Intercable will be voted in favor of adjournment of the
meeting for the purpose of soliciting additional proxies. We do not currently
intend to seek an adjournment of the meeting.
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DESCRIPTION OF COMCAST CAPITAL STOCK
The following description of certain terms of Comcast's capital stock does
not purport to be complete and is qualified in its entirety by reference to
Comcast's Articles of Incorporation. For more information as to how you can
obtain a copy of Comcast's Articles of Incorporation, see "Where You Can Find
More Information."
COMMON STOCK
Comcast's authorized common stock consists of 200,000,000 shares of Class A
Common Stock, par value $1.00 per share, 2,500,000,000 shares of Class A Special
Common stock, par value $1.00 per share, and 50,000,000 shares of Class B Common
Stock, par value $1.00 per share. As of December 31, 1999, 25,993,380 shares of
Class A Common Stock, 716,442,482 shares of Class A Special Common Stock and
9,444,375 shares of Class B Common Stock were outstanding.
VOTING RIGHTS. Holders of Comcast's Class A Special Common Stock cannot
vote in the election of directors or otherwise, except where class voting is
required by law. In that case, holders of Class A Special Common Stock have one
vote per share. Under applicable law, holders of Class A Special Common Stock
have voting rights in the event of certain amendments to the articles of
incorporation and certain mergers and other fundamental corporate changes.
Generally, holders of Class A Common Stock have one vote per share. Holders of
Class B Common Stock have 15 votes per share. Generally, including the election
of directors, holders of Class A Common Stock and Class B Common Stock vote as
one class, except where class voting is required by law. Neither the holders of
Class A Common Stock or Class B Common Stock have cumulative voting rights.
DIVIDENDS. Subject to the preferential rights of any preferred stock then
outstanding, the holders of Class A Special Common Stock, Class A Common Stock
and Class B Common Stock are entitled to receive pro rata per share such cash
dividends as Comcast's Board of Directors may from time to time declare out of
funds legally available therefor. Each class of Comcast's common stock is to
receive dividends, as declared, on an equal basis per share.
Stock dividends on, and stock splits of, any class of common stock shall not
be paid or issued unless paid or issued on all classes of common stock, in which
case they are to be paid or issued only in shares of that class or in shares of
either Class A Common Stock or Class A Special Common Stock. Comcast does not
intend to pay dividends on Comcast's common stock for the foreseeable future.
PRINCIPAL SHAREHOLDER. At December 31, 1999, Sural owned 9,444,375 shares
of Comcast's outstanding Class B Common Stock and 136,913 shares of Comcast's
outstanding Class A Common Stock. Mr. Brian L. Roberts, President of Comcast,
controls Sural and is deemed to be the beneficial owner of the shares of
Class A and Class B Common stock owned by Sural. In addition, as of
December 31, 1999, Mr. Roberts was the beneficial owner of an additional 1,356
shares of Class A Common Stock. Since each share of Class B Common Stock is
entitled to 15 votes, the shares of Class A Common Stock and Class B Common
Stock owned by Sural and Mr. Roberts constitute approximately 85% of the voting
power of the two classes of Comcast'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. 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 9,582,644 shares of Class A
Common Stock (approximately 27% of the Class A Common Stock).
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CONVERSION OF CLASS B COMMON STOCK. Comcast's Class B Common Stock is
convertible share for share into either Comcast Class A Common Stock or Comcast
Class A Special Common Stock.
PREFERENCE IN LIQUIDATION. In the event of liquidation, dissolution or
winding up, either voluntary or involuntary, of Comcast, the holders of Class A
Special Common Stock, Class A Common Stock and Class B Common Stock are entitled
to receive, subject to any liquidation preference of any preferred stock then
outstanding, the remaining assets, if any, of Comcast in proportion to the
number of shares held by them without regard to class.
MISCELLANEOUS. The holders of Class A Special Common Stock, Class A Common
Stock and Class B Common Stock do not have any preemptive rights, except that if
the right to subscribe to stock, options or warrants to purchase stock is
offered or granted to all holders of Class A Special Common Stock or Class A
Common Stock, parallel rights must be given to all holders of Class B Common
Stock. All shares of Class A Special Common Stock, Class A Common Stock and
Class B Common Stock presently outstanding are, and all shares of Class A
Special Common Stock offered hereby will be, when issued, fully paid and
non-assessable.
The transfer agent and registrar for Comcast's Class A Special Common Stock
will be EquiServe Trust Company, N.A., 525 Washington Blvd., Jersey City, NJ
07310.
PREFERRED STOCK
Comcast's Board of Directors is authorized to issue, in one or more series,
up to a maximum of 20,000,000 shares of preferred stock. The shares can be
issued with such designations, preferences, qualifications, privileges,
limitations, restrictions, options, conversion rights and other special or
relative rights as Comcast's Board of Directors shall from time to time fix by
resolution.
DESCRIPTION OF JONES INTERCABLE CAPITAL STOCK
The following description of certain terms of the capital stock of Jones
Intercable does not purport to be complete and is qualified in its entirety by
reference to the Jones Intercable Articles of Incorporation, a copy of which has
been filed by Jones Intercable as Exhibit 3.1 to the Annual Report on Form 10-K
of Jones Intercable for the year ended May 31, 1988 (as amended by the Amendment
to the Articles of Incorporation filed as Exhibit 3.2 to the Annual Report on
Form 10-K of Jones Intercable for the year ended May 31, 1995 and the Amendment
to the Articles of Incorporation filed as Exhibit 3.3 to the Annual Report on
Form 10-K of Jones Intercable for the year ended December 31, 1996). For more
information as to how you can obtain a copy of the Jones Intercable Articles of
Incorporation, see "Where You Can Find More Information."
Jones Intercable's authorized capital stock consists of 5,550,000 shares of
Common Stock, $.01 par value per share, of which 5,113,021 shares were
outstanding at January 24, 2000, and 60,000,000 shares of Class A Common Stock,
$.01 par value per share, of which 36,937,420 shares were outstanding at such
date.
The outstanding shares of both classes of common stock are not subject to
redemption or to any liability for further calls or assessments, and the holders
of such shares do not have preemptive or other rights to subscribe for
additional shares of Jones Intercable. All issued and outstanding shares of
Common Stock and Class A Common Stock are validly issued, fully paid and
nonassessable. Dividends in cash, property or shares of Jones Intercable may be
paid upon the Common Stock and Class A Common Stock, if declared by Jones
Intercable's Board of Directors, out of any funds legally available therefor,
and holders of Class A Common Stock have a cash dividend preference over holders
of Common Stock, as described below. Holders of Common Stock and Class A Common
Stock are entitled to share ratably in assets available for distribution upon
any liquidation of Jones Intercable,
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subject to the prior rights of creditors, although holders of Class A Common
Stock have a preference on liquidation over holders of Common Stock, as
described below.
The Class A Common Stock has certain preferential rights with respect to
cash dividends and upon liquidation of Jones Intercable. In the event that cash
dividends are paid, the holders of the Class A Common Stock will be paid $.005
per share per quarter in addition to the amount payable per share of Common
Stock. In the case of liquidation, holders of Class A Common Stock will be
entitled to a preference of $1 per share. After such amount is paid, holders of
Common Stock will then be entitled to receive $1 per share for each share of
Common Stock outstanding. Any remaining amount will be distributed to the
holders of Common Stock and Class A Common Stock on a pro rata basis.
The Class A Common Stock has voting rights that are generally 1/10th of
those held by the Common Stock. In the election of directors, the holders of
Class A Common Stock, voting as a separate class, are entitled to elect that
number of directors that constitute 25% of the total membership of the board of
directors. If such 25% is not a whole number, holders of Class A Common Stock
are entitled to elect the nearest higher whole number of directors constituting
25% of the membership of the board of directors. Holders of the Common Stock,
also voting as a separate class, are entitled to elect the remaining directors.
As of January 24, 2000, the outstanding shares of Class A Common Stock
constituted approximately 87.8% of the total outstanding shares of capital stock
of Jones Intercable but cast only 41.9% of the votes to be cast in matters to be
acted upon by shareholders of Jones Intercable not requiring a class vote, and
the outstanding shares of Jones Intercable Common Stock constituted
approximately 12.2% of the outstanding capital stock of Jones Intercable, but
cast approximately 58.1% of the votes to be cast by shareholders of Jones
Intercable in connection with such matters.
COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF COMCAST AND JONES INTERCABLE
Upon consummation of the merger, you will become a Comcast shareholder, and
your rights will be governed by Pennsylvania law and by Comcast's Articles of
Incorporation and Bylaws, which differ in certain respects from Colorado law and
the Jones Intercable Articles of Incorporation and Bylaws. The following is a
summary of the material differences between the rights of Jones Intercable
shareholders and Comcast's shareholders. Although it is impractical to compare
all of the aspects in which Pennsylvania law and Colorado law and the companies'
governing instruments differ with respect to shareholders' rights, the following
discussion summarizes the material significant differences between them.
FIDUCIARY DUTIES OF DIRECTORS
Both Colorado law and Pennsylvania law provide that the board of directors
has the ultimate responsibility for managing the business affairs of a
corporation. In discharging this function, directors owe fiduciary duties of
care and loyalty to the corporation and to its common shareholders.
Both Colorado law and Pennsylvania law require that directors perform their
duties in good faith. Pennsylvania law provides that the board of directors,
committees of the board and individual directors of a business corporation may,
in considering the best interests of the corporation, consider to the extent
they deem appropriate:
- the effects of any action on any or all groups affected by such action,
including shareholders, employees, suppliers, customers and creditors of
the corporation, and upon communities in which offices or other
establishments of the corporation are located;
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- the short-term and long-term interests of the corporation, including
benefits that the corporation may enjoy from its long-term plans and the
possibility that these interests may be best served by the continued
independence of the corporation;
- the resources, intent and conduct, past, stated and potential, of any
person seeking to acquire control of the corporation; and
- all other pertinent factors.
Pennsylvania law also provides that, in considering the best interests of
the corporation, the board of directors, committees of the board of directors
and individual directors are not required to regard any corporate or other
interest as dominant or controlling.
LIMITATION OF DIRECTOR LIABILITY
Both Colorado law and Pennsylvania law permit a corporation to limit a
director's exposure to monetary liability for breach of fiduciary duty. Colorado
law provides for such limitation in the corporation's articles of incorporation,
while Pennsylvania law allows the limitation in either the articles of
incorporation or a bylaw adopted by the shareholders.
Colorado law provides that a director cannot be relieved of liability for
monetary damages for:
- any breach of the director's duty of loyalty to the corporation or to its
shareholders;
- acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
- unlawful distributions made in violation of the director's duties of good
faith, care, and loyalty; or
- any transaction from which the director directly or indirectly derived an
improper personal benefit.
Under Pennsylvania Law, a director cannot be relieved of liability for:
- breach of his or her statutory duties of care and good faith to the
company if such breach or omission constitutes self-dealing, willful
misconduct or recklessness;
- violation of criminal statutes; or
- nonpayment of federal, state or local taxes.
The Jones Intercable Articles of Incorporation and Comcast's Bylaws
eliminate, to the fullest extent permitted by law, liability of a director to
the company or its shareholders for monetary damages for a breach of such
director's fiduciary duty of care.
INDEMNIFICATION
Colorado law generally permits indemnification of director and officer
expenses, including attorney's fees, actually and reasonably incurred in the
defense or settlement of a derivative or third-party action, provided there is a
determination by a majority vote of a disinterested quorum of the directors, by
independent legal counsel or by a majority vote of a quorum of the shareholders
that the person seeking indemnification acted in good faith and in a manner
reasonably believed to be in the best interests of the corporation. Colorado law
requires indemnification of director expenses unless limited by the articles of
incorporation, when the individual being indemnified has successfully defended
any proceeding, on the merits or otherwise.
Under Colorado law, expenses incurred by an officer or director in defending
an action may be paid in advance if such director or officer, among other
things, undertakes to repay such amounts if it
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is ultimately determined that he or she is not entitled to indemnification. In
addition, Colorado law authorizes a corporation's purchase of indemnity
insurance for the benefit of its officers, directors, employees and agents
whether or not the corporation would have the power to indemnify against the
liability covered by the policy.
A provision of Colorado law states that, except with regard to directors, a
corporation may indemnify or advance expenses to a greater extent than provided
by statute if not inconsistent with public policy and if provided for by any
bylaw, agreement, vote of shareholders or directors or otherwise.
Pennsylvania law permits a corporation to indemnify any person involved in a
third party action, by reason of being an officer or director of the
corporation, against expenses, judgments, fines and settlement amounts paid in
such third party action (and against expenses incurred in any action by or in
the right of the corporation), if such person acted in good faith and reasonably
believed that his or her actions were in, or not opposed to, the best interests
of the corporation. With respect to any criminal proceeding, Pennsylvania law
permits indemnification only when the director or officer had no reasonable
cause to believe that his or her conduct was unlawful. Furthermore, as under
Colorado law, Pennsylvania law provides that a corporation may advance to
officers and directors expenses incurred in defending any action upon receipt of
an undertaking by the person to repay the amount advanced if it is ultimately
determined that he or she is not entitled to indemnification.
In general, no indemnification for expenses in derivative actions is
permitted under Pennsylvania law where the person has been adjudged liable to
the corporation, unless a court finds him or her entitled to such
indemnification. If, however, the person has been successful in defending a
third-party or derivative action, indemnification for expenses incurred is
mandatory under Pennsylvania law.
In Pennsylvania, the statutory provisions for indemnification are
nonexclusive with respect to any other rights, such as contractual rights under
a bylaw, agreement or vote of shareholders or disinterested directors, to which
a person seeking indemnification may be entitled.
Pennsylvania law also authorizes a corporation's purchase of indemnification
insurance for the benefit of its officers, directors, employees, agents and
other corporate representatives whether or not the corporation would have the
power to indemnify against the liability covered by the policy, unless the
corporation's bylaws otherwise prohibit the purchase of such insurance.
Both Jones Intercable and Comcast provide for the indemnification of
directors and officers to the fullest extent permissible under law. The Jones
Intercable Bylaws and Comcast Bylaws provide directors and officers with the
right to have expenses incurred in defending any proceeding paid by Jones
Intercable or Comcast in advance of the final disposition of such proceeding.
BUSINESS COMBINATIONS
Under Colorado law, approval of a plan of merger or share exchange in an
"existing corporation" requires two-thirds of all the votes entitled to be cast
on the plan by each voting group. An "existing corporation" under Colorado law
is a corporation that was in existence on June 30, 1994 and that was
incorporated under certain provisions of Colorado law. Jones Intercable is an
"existing corporation" under Colorado law. As an existing corporation, Colorado
law generally requires that two-thirds of the shareholders of both the acquiring
and target corporations approve statutory mergers. The Jones Intercable Articles
of Incorporation and Bylaws require that the Jones Intercable shareholders are
entitled to vote as separate classes on any plan of merger or consolidation and
certain other business combinations. The passage of such business combination
requires the affirmative vote of the holders of two-thirds of the shares of each
class and of the total shares entitled to vote on such matter. Colorado
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law does not require a shareholder vote of the surviving corporation in a merger
(unless the corporation provides otherwise in its certificate of incorporation)
if:
- the articles of incorporation of the surviving corporation will not differ
from its articles of incorporation before the merger;
- each shareholder of the surviving corporation whose shares were
outstanding immediately before the merger will hold the same number of
shares, with identical designations, preferences, limitations, and
relative rights, immediately after the merger;
- the number of voting shares outstanding immediately after the merger, plus
the number of voting shares issuable as a result of the merger either by
the conversion of securities issued pursuant to the merger or by the
exercise of rights and warrants issued pursuant to the merger, will not
exceed by more than 20% the total number of voting shares of the surviving
corporation outstanding immediately before the merger; and
- the number of shares entitled to participate in corporate distributions
outstanding immediately after the merger, plus the number of participating
shares issuable as a result of the merger either by the conversion of
securities issued pursuant to the merger or by the exercise of rights and
warrants issued pursuant to the merger, will not exceed by more than 20%
the total number of participating shares outstanding immediately before
the merger.
Under Pennsylvania law, a merger or consolidation requires approval of the
corporation's board of directors and the affirmative vote of a majority of the
votes cast by all shareholders entitled to vote.
Under Pennsylvania law, unless a corporation has opted out of certain
statutory provisions, shares of a corporation whose shares are registered under
the Securities Exchange Act of 1934 acquired in a "control share acquisition" do
not have voting rights unless restored by a resolution approved by a vote of the
disinterested shareholders. Under Pennsylvania law a "control share acquisition"
means an acquisition by any person of voting power of a corporation that would,
when added to all other voting power of such person, entitle such person to cast
for the first time, the amount of voting power in any of the following ranges:
- at least 20% but less than 33 1/3%;
- at least 33 1/3% but less than 50%; or
- more than 50%.
Pursuant to Comcast's Bylaws, and in accordance with Pennsylvania law, these
"control share acquisition" provisions are inapplicable to Comcast and its
shareholders.
Colorado does not have a similar "control share acquisition" statute.
ANTI-TAKEOVER PROTECTION
Pennsylvania law prohibits a corporation from engaging in a business
combination with the beneficial owner of 20% or more of the corporation's stock
for 5 years from the time the shareholder acquired the stock, unless certain
conditions are met.
Under Pennsylvania law, a corporation whose shares are registered under the
Securities Exchange Act of 1934 that has not opted out of certain statutory
provisions may engage in a business combination with a 20% shareholder within
the five-year period if:
- the 20% shareholder's stock purchase was approved by the corporation's
board of directors before the share acquisition date;
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- the business combination itself was approved by the corporation's board of
directors before the share acquisition date;
- the business combination is approved by the affirmative vote of all of the
holders of all of the outstanding common shares; or
- the business combination is approved by the affirmative vote of the
majority of disinterested shareholders no earlier than three months after
the share acquisition date, provided the 20% shareholder is the beneficial
owner of 80% of the voting shares of the corporation and provided the
price paid to all shareholders meets statutory criteria establishing a
formula price.
After the expiration of the five-year period, the business combination will
be permitted if:
- approved by a majority of disinterested shareholders; or
- approved by the majority vote of the shareholders provided the price to be
paid meets the formula price.
The formula price is the higher of the following:
- the highest per share price paid by the interested shareholder (at a time
when the shareholder was a beneficial owner of shares entitling such
person to cast at least 5% of the votes that all shareholders would be
entitled to cast) either within the five years before the announcement
date of the combination or within five years before the transaction where
the interested shareholder became an interested shareholder; plus interest
on United States Treasury Securities, less dividends paid on the stock; or
- the market value per common share on the announcement date or on the
interested shareholder's share acquisition date, whichever is higher, plus
interest on United States Treasury Securities, less dividends paid on the
stock.
Comcast has not opted out of the Pennsylvania statutory provisions regarding
a business combination with a 20% shareholder.
Pennsylvania law also provides that, unless a corporation has opted out, any
profit realized by any person or group that acquires voting control over at
least 20% of a corporation whose shares are registered under the Securities
Exchange Act of 1934 pursuant to the disposition of equity securities of the
registered corporation within two years before or 18 months after becoming a 20%
shareholder is recoverable by the corporation. Comcast has opted out of this
provision of Pennsylvania law.
Colorado does not have a similar business combination statute.
VOTING RIGHTS
The Jones Intercable Class A Common Stock has voting rights that are
generally 1/10th of those held by the Jones Intercable Common Stock. In the
election of directors, the holders of Class A Common Stock, voting as a separate
class, are entitled to elect that number of directors that constitute 25% of the
total membership of the board of directors. If such 25% is not a whole number,
holders of Class A Common Stock are entitled to elect the nearest higher whole
number of directors constituting 25% of the membership of the board of
directors. Holders of the Common Stock, also voting as a separate class, are
entitled to elect the remaining directors. Neither the holders of Jones
Intercable Common Stock nor the holders of Jones Intercable Class A Common Stock
have cumulative voting rights.
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The holders of Jones Intercable Common Stock and Class A Common Stock are
entitled to vote as separate classes upon all matters specified under Colorado
law as requiring a separate class vote (which includes, among other things,
mergers, consolidations and certain other business combinations). On all matters
requiring such class vote, the passage of any such matter shall require the
affirmative vote of the holders of two-thirds of the shares of each class and of
the total shares entitled to vote on such matter.
The holders of Comcast Class A Special Common Stock are not entitled to vote
in the election of directors or otherwise, except where class voting is required
by applicable law, in which case, each holder of Comcast Class A Special Common
Stock shall be entitled to one vote per share. Under applicable law, holders of
Comcast Class A Special Common Stock have voting rights in the event Comcast's
Articles of Incorporation are amended:
- to create or expand the number of authorized shares of any class of stock
which has or may have a preference as to dividends or assets senior to
Comcast Class A Special Common Stock;
- to make any adverse change in the preferences, limitations, or special
rights of Comcast Class A Special Common Stock; or
- to amend or repeal the provisions relating to class voting rights, or in
the event of certain fundamental transactions (such as mergers) having the
same effect.
Each holder of Comcast Class A Common Stock has one vote per share and each
holder of Comcast Class B Common Stock has 15 votes per share. Comcast's
Articles of Incorporation provide that Comcast Class A Special Common Stock,
Comcast Class A Common Stock and Comcast Class B Common Stock vote as separate
classes on certain amendments to Comcast's Articles of Incorporation and on
other matters, each as required by applicable law. In all other instances,
including the election of directors, Comcast Class A Common Stock and Comcast
Class B Common Stock vote as one class. Neither the holders of Comcast Class A
Common Stock nor the holders of Comcast Class B Common Stock have cumulative
voting rights.
AMENDMENTS TO THE ARTICLES OF INCORPORATION
Under Colorado law, unless the articles of incorporation, a bylaw adopted by
the shareholders, or the proposing board of directors or proposing shareholders
require a greater vote, amending the articles of incorporation of an "existing
corporation", such as Jones Intercable, requires the approval of two-thirds of
the votes cast by the holders of shares entitled to vote thereon and, if any
class or series of shares is entitled to vote thereon as a class, the
affirmative vote of a majority of the votes cast in such class vote. The board
of directors must recommend the amendment to the shareholders unless the
amendment is proposed by shareholders or unless the board determines that,
because of a conflict of interest or other special circumstances, it should make
no recommendation and communicates the basis for its determination to the
shareholders with the amendment.
Under Colorado law, unless otherwise provided in the articles of
incorporation, the board of directors may adopt an amendment to the articles of
incorporation without shareholder approval if shares have not been issued or to:
- delete the names and addresses of the initial directors;
- delete the name and address of the initial registered agent or registered
office, if a statement of change is on file with the secretary of state;
or
- change the corporate name by substituting the word "corporation",
"incorporated", "company", "limited", or an abbreviation of any thereof
for a similar word or abbreviation in the name, or by adding, deleting, or
changing a geographical attribution.
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Colorado law provides that the holders of the shares of a class are entitled
to vote as a separate voting group on an amendment if the amendment would:
- increase or decrease the aggregate number of authorized shares of the
class;
- exchange or reclassify all or part of the shares of the class into shares
of another class;
- exchange or reclassify, or create the right of exchange of, all or part of
the shares of another class into shares of the class;
- change the designations, preferences, limitations, or relative rights of
all or part of the shares of the class;
- change the shares of all or part of the class into a different number of
shares of the same class;
- create a new class of shares having rights or preferences with respect to
distributions or dissolution that are prior, superior, or substantially
equal to the shares of the class;
- increase the rights, preferences, or number of authorized shares of any
class that, after giving effect to the amendment, has rights or
preferences with respect to distributions or dissolution that are prior,
superior, or substantially equal to the shares of the class;
- limit or deny an existing preemptive right of all or part of the shares of
the class; or
- cancel or otherwise affect rights to distributions or dividends that have
accumulated but have not yet been declared on all or part of the shares of
the class.
Colorado law also provides that the shares of a series of a class of shares
that would be affected by an amendment in one of the above ways are entitled to
vote as a separate voting group on an amendment.
Generally, under Pennsylvania law, unless the articles of incorporation
require a greater vote, a proposed amendment will be adopted upon receiving the
affirmative vote of a majority of the votes cast by all shareholders entitled to
vote thereon and, if any class or series of shares is entitled to vote thereon
as a class, the affirmative vote of a majority of the votes cast in such class
vote. Also, a proposed amendment of the articles of incorporation will not be
deemed to have been adopted by a corporation unless the board of directors has
also approved the amendment, regardless of the fact that the board submitted the
amendment to the shareholders for action.
Under Pennsylvania law, unless otherwise restricted in the articles of
incorporation, an amendment of the articles of incorporation does not require
the approval of the shareholders if shares have not been issued or if the
amendment only:
- changes the corporate name;
- provides for perpetual existence;
- reduces authorized shares pursuant to acquisition by the corporation of
its own shares; or
- adds or deletes an article providing for a class to be represented by
uncertificated shares.
Also, shareholder approval is not necessary if the corporation has only one
class of shares outstanding and the amendment is solely to increase the number
of authorized shares to effectuate a stock dividend or a stock split and, in
case of a stock split, may also change the par value of the shares.
Under Pennsylvania law, the holders of shares of a class or series are
entitled to vote as a class with respect to an amendment if the amendment would:
- authorize the board of directors to fix and determine the relative rights
and preferences of any preferred or special class;
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- make any change in the preferences, limitations or special rights of the
shares of a class or series adverse to the class or series other than
preemptive rights or the right to cumulative voting;
- authorize a new class or series having a preference as to dividends or
assets which is senior to the shares of a class or series; or
- increase the number of authorized shares of any class or series having a
preference as to dividends or assets which is senior in any respect to the
shares of a class or series.
The Comcast Articles of Incorporation and Bylaws and the Jones Intercable
Articles of Incorporation and Bylaws do not contain a provision requiring
greater than the statutory requirement for approval of amendments to such
articles.
DIVIDENDS AND REPURCHASES OF SHARES
Colorado law dispenses with the concept of par value of shares as well as
statutory definitions of capital and surplus. Colorado law permits a corporation
to distribute funds with respect to the corporation's shares, whether as
dividends or share repurchases, unless after giving effect to the distribution:
- the corporation would not be able to pay its debts as they become due in
the usual course of business; or
- the corporation's total assets would be less than the sum of its total
liabilities plus (unless the articles of incorporation permit otherwise)
the amount that would be needed, if the corporation were to be dissolved
at the time of the distribution, to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior to
those receiving the distribution.
Dividends in cash, property or shares of Jones Intercable may be paid upon
the Common Stock and Class A Common Stock, if declared by the company's board of
directors, out of any funds legally available therefor, and holders of Class A
Common Stock have a cash dividend preference over holders of Common Stock, as
described below. Holders of Common Stock and Class A Common Stock are entitled
to share ratably in assets available for distribution upon any liquidation of
the company, subject to the prior rights of creditors, although holders of
Class A Common Stock have a preference on liquidation over holders of Common
Stock, as described below.
The Class A Common Stock has certain preferential rights with respect to
cash dividends and upon liquidation of the company. In the event that cash
dividends are paid, the holders of the Class A Common Stock will be paid $.005
per share per quarter in addition to the amount payable per share of Common
Stock. In the case of liquidation, holders of Class A Common Stock will be
entitled to a preference of $1 per share. After such amount is paid, holders of
the Common Stock will then be entitled to receive $1 per share for each share of
Common Stock outstanding. Any remaining amount will be distributed to the
holders of Class A Common Stock and Common Stock on a pro rata basis.
Under Pennsylvania law, the board of directors of a corporation may, except
as otherwise provided in its bylaws, declare and pay distributions to
shareholders in cash, property or shares, provided that a distribution may not
be made if, after giving effect thereto:
- the corporation would be unable to pay its debts as they become due in the
usual course of its business; or
- the total assets of the corporation would be less than the sum of its
total liabilities plus the amount that would be needed, if the corporation
were to be dissolved at the time the distribution is approved, to satisfy
the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the distribution.
Total assets and liabilities for
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this purpose are to be determined by the board of directors, which may
base its determination on such factors as it considers relevant, including
the book value of the corporation's assets and liabilities, unrealized
appreciation and depreciation of the corporation's assets, the current
value of its assets and liabilities either valued separately or as an
entity as a going concern or any other method reasonable under the
circumstances.
Subject to the preferential rights of any Preferred Stock then outstanding,
the holders of Comcast Class A Special Common Stock, Comcast Class A Common
Stock and Comcast Class B Common Stock are entitled to receive pro rata per
share such cash dividends as from time to time may be declared by Comcast's
Board of Directors out of funds legally available therefor. Each class of
Comcast's common stock is to receive cash dividends and (except as described
below) dividends of stock or other property, as declared, on an equal basis per
share. Stock dividends on, and stock splits of, any class of Comcast's common
stock shall not be paid or issued unless paid or issued on all classes of
Comcast's common stock, in which case (except as described below) they are to be
paid or issued only in shares of that class; provided, however, that stock
dividends or stock splits of Comcast Class A Special Common Stock, Comcast
Class A Common Stock or Comcast Class B Common Stock may be paid or issued in
shares of either Comcast Class A Common Stock or Comcast Class A Special Common
Stock.
Comcast's Articles of Incorporation permit the company (in the discretion of
Comcast's Board of Directors), by means of a dividend, rights distribution,
merger, statutory division, recapitalization, or other means, to distribute to
the holders of the three existing classes of Comcast's common stock separate
classes of equity interests in Comcast (e.g. different classes of tracking
stock) or in other entities (e.g., different classes of stock in a subsidiary
being spun off to Comcast shareholders) substantially replicating the relative
rights of the three existing classes of Comcast common stock.
Under Pennsylvania Law, a corporation may not, with certain limited
exceptions, repurchase or redeem its shares when the capital of such corporation
is impaired or when such purchase or redemption would cause the impairment of
the capital of such corporation.
DISSENTERS' RIGHTS
Under Colorado law, a shareholder of a corporation participating in certain
major corporate transactions may, under varying circumstances, be entitled to
dissenters' rights pursuant to which such shareholder may receive cash in the
amount of the fair market value of his or her shares in lieu of the
consideration he or she would otherwise receive in the transaction. Such fair
market value is determined exclusive of any element of value arising from the
accomplishment or expectation of the merger or consolidation and such
dissenters' rights are not available to shareholders of a corporation surviving
a merger if no vote of the shareholders of the surviving corporation is required
to approve the merger or share exchange under Colorado law (unless the merger
involves a corporation being merged with its parent). However, no dissenters'
rights are available with respect to shares which, at the applicable record
date, were either listed on a national securities exchange or held of record by
more than 2,000 shareholders, unless the holders of such shares are required by
the terms of the merger or consolidation to accept any consideration other than
shares of the surviving corporation, shares of stock of another corporation or
such shares and cash in lieu of fractional shares.
Under Pennsylvania law, a shareholder may dissent from, and receive payment
of the fair value of its shares in the event of certain mergers, consolidations,
share exchanges, asset transfers and corporate divisions. However, no
dissenters' rights are available with respect to shares which, at the applicable
record date, were either listed on a national securities exchange or held of
record by more than 2,000 shareholders, unless the holders of such shares are
required by the terms of the merger or consolidation to accept any consideration
other than shares of the surviving corporation, shares of stock of another
corporation or such shares and cash in lieu of fractional shares.
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SPECIAL TREATMENT
Pennsylvania law provides that an amendment or plan may contain a provision
classifying the holders of shares of a class into one or more separate groups by
reference to any facts or circumstances that are not manifestly unreasonable and
providing mandatory treatment for shares of the class held by particular
shareholders or groups of shareholders that differs materially from the
treatment accorded other shareholders or groups of shareholders holding shares
of the same class if:
- the plan or amendment is approved by a majority of the votes cast by the
shareholders, including the class of shareholders subject to such
mandatory treatment; or
- a court of competent jurisdiction approves the special treatment.
Dissenters' rights would generally be available to shareholders subject to
special treatment.
AMENDMENTS TO BYLAWS
Colorado law provides that both the board of directors and the shareholders
have the power to amend the bylaws at any time to add, change, or delete a
provision, unless a specific provision of Colorado law, the articles of
incorporation, or a particular bylaw restricts the power of the board of
directors. The Jones Intercable Articles of Incorporation and Bylaws do not
restrict the power of the board of directors and the shareholders to amend the
Jones Intercable bylaws, other than requiring that amending the provisions
relating to class voting requires the unanimous vote of all Jones Intercable
shareholders.
Under Pennsylvania law, after a corporation receives payment for any of its
stock, the power to adopt, amend or repeal bylaws resides exclusively in the
shareholders unless the bylaws confer a concurrent power on the board of
directors. However, even if the shareholders confer concurrent power on the
board of directors, the directors have no authority to adopt or change a bylaw
on any subject that is committed expressly to the shareholders by Pennsylvania
law. A majority of the shareholders entitled to vote has the power to amend
Comcast's Bylaws except as limited by Pennsylvania law and except that such
power is limited by the shareholders' right to change any such action.
ACTION BY WRITTEN CONSENT
Colorado law provides that, unless otherwise provided in the articles of
incorporation, shareholders may act without a meeting on any action required or
permitted to be taken at a meeting if all of the shareholders entitled to vote
thereon consent to such action in writing. The Jones Intercable Bylaws provide
that shareholder action may be taken without a meeting if all of the
shareholders entitled to vote on the action consent in a signed writing which
sets forth the action to be taken.
Under Pennsylvania law, unless otherwise provided in the bylaws,
shareholders may act without a meeting on any action requiring a shareholder
vote, provided they have the written consent of the holders of all outstanding
shares entitled to vote thereon. Any action that must be or could be taken at a
meeting of Comcast's shareholders (or a class of shareholders) may be taken
without a meeting if prior to or subsequent to the action, a written consent
setting forth the action to be taken is signed by all of the shareholders who
would be entitled to vote at a meeting for such purpose. Comcast's Bylaws permit
its shareholders to take action by written consent if, prior or subsequent to
the action, a consent in writing setting forth the action to be taken shall be
signed by all of the shareholders who would be entitled to vote at a meeting for
such purpose and shall be filed with Comcast's Corporate Secretary.
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SPECIAL MEETING OF SHAREHOLDERS
Under Colorado law, special meetings of the shareholders may be called by:
- the board of directors;
- such person or persons authorized by the bylaws or a resolution of the
board of directors; or
- the holders of shares representing at least 10% of all the votes entitled
to be cast on any issue proposed to be considered at the meeting.
A meeting of shareholders may also be ordered by a district court on
application of any shareholder entitled to participate in an annual meeting if
an annual meeting was not held within the earlier of six months after the close
of the corporation's most recently ended fiscal year or fifteen months after its
last annual meeting.
The Jones Intercable Bylaws provide that special meetings of the
shareholders may be called by the Chief Executive Officer, President, the Board
of Directors, or the holders of at least 10% of all of the shares entitled to
vote at the meeting (regardless of the number of votes such shares are entitled
to cast at such meeting).
Pennsylvania law provides that special meetings of the shareholders may be
called by:
- the board of directors;
- shareholders entitled to cast at least 20% of the vote entitled to be cast
at that meeting, however, as a company subject to the rules and
regulations under the Securities Exchange Act of 1934, such provision is
inapplicable to Comcast (except for special meetings relating to certain
interested shareholder transactions); or
- such person or persons as may be authorized by the bylaws.
In addition, under Pennsylvania law, if the annual meeting for election of
directors is not called and held within six months after the designated time,
any shareholder may call the meeting at any time thereafter.
Special meetings of Comcast shareholders may be called by the Chairman of
the Board of Directors or the President or by the Board of Directors.
ANNUAL MEETING OF SHAREHOLDERS
Under Colorado law, a corporation shall hold a meeting of shareholders
annually at the time and date fixed in accordance with its bylaws or in
accordance with a resolution of its board of directors. The Jones Intercable
Bylaws set the annual meeting on the last Friday in October of each year or at
another date and time as determined by Jones Intercable's Board of Directors.
Pennsylvania law requires that except as otherwise provided in the articles
of incorporation, at least one meeting of the shareholders shall be held in each
calendar year for the election of directors at such time as provided in or fixed
pursuant to authority granted in the corporation's bylaws. Comcast's Bylaws
allow its Board of Directors to determine the date and time of the annual
meeting of its shareholders. If the Board of Directors fails to set a time and
date, then its annual meeting shall be on the second Thursday of June (unless
such date is a holiday, and if so, then the meeting shall be on the next
succeeding business day.)
BUSINESS CONDUCTED AT MEETING OF COMCAST SHAREHOLDERS
The business that may be conducted at any meeting of Comcast shareholders
must:
- be specified in the written notice of the meeting (or any supplement
thereto) given by Comcast;
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- be brought before the meeting at the direction of the Board of Directors;
- be brought before the meeting by the presiding officer of the meeting
unless a majority of the directors then in office object to such business
being conducted at the meeting; or
- in the case of any matters intended to be brought by one of its
shareholders before an annual meeting of shareholders for specific action
at such meeting, have been specified in a written notice given to
Comcast's Secretary, by or on behalf of any shareholder who shall have
been a shareholder of record on the record date for such meeting and who
shall continue to be entitled to vote at such meeting, in accordance with
certain requirements set forth in Comcast's Bylaws.
Jones Intercable does not place such restrictions on the business to be
conducted at a meeting of shareholders.
PREEMPTIVE RIGHTS
Holders of Jones Intercable common stock do not have preemptive rights to
purchase shares of such stock or shares of stock of any other class that Jones
Intercable may issue. All issued and outstanding shares of Jones Intercable
Common Stock and Class A Common Stock are validly issued, fully paid and
nonassessable.
The holders of Comcast common stock do not have any preemptive rights.
However, if the right to subscribe to stock, stock options or warrants to
purchase stock is offered or granted to all holders of Comcast Class A Special
Common Stock or Comcast Class A Common Stock, parallel rights must be given to
all holders of Comcast Class B Common Stock. All shares of Comcast's common
stock presently outstanding are, and all shares of Comcast Class A Special
Common Stock to be issued in the merger will, when issued, be fully paid and
non-assessable.
SIZE OF THE BOARD OF DIRECTORS
Under Colorado law, a corporation may have one or more directors on its
board. The size of the board must be specified in or fixed in accordance with
the articles of incorporation or the bylaws. The articles or bylaws may
establish a range for the size of the board of directors, with the number of
directors fixed or changed from time to time within the range by the
shareholders or the board of directors. The Jones Intercable Articles of
Incorporation provide that the number of directors may be increased or decreased
as provided in the bylaws, but that no decrease may shorten the term of an
incumbent director and the number of directors shall not be decreased to less
than three. The Jones Intercable Bylaws provide for a range of directors between
8 and 13, with the current board set at nine directors.
Pennsylvania law also allows a corporation to have one or more directors on
its board. Under Pennsylvania law, the bylaws or articles of incorporation
govern the size of the board. If neither the articles of incorporation nor the
bylaws provide for the size of the board, Pennsylvania law fixes the number of
directors on the board at three. Comcast's Bylaws grant the Board of Directors
the power to determine the number of directors on its Board. Comcast's current
Board is set at nine directors.
CLASSIFICATION OF THE BOARD OF DIRECTORS
A classified or staggered board is one on which a certain number, but not
all, of the directors are elected on a rotating basis each year. This method of
electing directors makes changes in the composition of the board of directors
more difficult, and thus a potential change in control of a corporation a
lengthier and more difficult process. Colorado law permits, but does not
require, a staggered board of directors. The directors may be divided by the
articles of incorporation into as many as three classes with staggered terms of
office, with only one class of directors standing for election each year. The
Jones Intercable Articles of Incorporation do not provide for a classified board
of
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directors, and directors hold office until the next annual meeting of
shareholders and until his or her successor has been elected and qualified.
Pennsylvania law provides that, unless otherwise specified in the articles
of incorporation, a corporation's board of directors may be divided into various
classes with staggered terms of office. All classes must be as nearly equal in
number as possible, the term of office of at least one class must expire in each
year and the members of a class may not be elected for a period longer than four
years. If the directors are to be classified, the classification must be done in
the articles of incorporation. Comcast's Articles of Incorporation do not
provide for a classified board of directors, and directors hold office until the
next annual meeting of shareholders and until his or her successor has been
elected and qualified.
VACANCIES ON THE BOARD
Under Colorado law, unless otherwise provided in the articles of
incorporation, if a vacancy occurs on the board of directors, including a
vacancy resulting from an increase in the number of directors, it may be filled
by the shareholders or the board of directors. If less than a quorum of
directors remain in office, they may fill the vacancy by the affirmative vote of
a majority of all the directors remaining in office. The Jones Intercable Bylaws
provide that vacancies on the board of directors are filled by the remaining
directors, unless the remaining directors elect to call a special meeting of the
shareholders to fill such vacancy. If the vacancy is to be filled by the
directors, it is filled by the affirmative vote of a majority of the directors
elected by the same voting group remaining in office. If the vacancy is to be
filled by the shareholders, only the holders of shares of that voting group are
entitled to vote to fill the vacancy. A director elected to fill a vacancy holds
office during the unexpired term of his or her predecessor in office. A director
elected to fill a position resulting from an increase in the board of directors
holds office until the next annual meeting of shareholders and until his or her
successor is elected and qualified.
Pennsylvania law provides that a majority of the directors then in office,
even if less than a quorum, may fill newly created directorships and all
vacancies, including vacancies resulting from an increase in the size of the
board. In addition, when one or more directors resign from the board effective
at a future date, the directors then in office, including those who have so
resigned, may fill the vacancy or vacancies by a majority vote. Unless the
bylaws specify otherwise, directors selected to fill newly created directorships
and all vacancies serve only the balance of the unexpired term. Comcast's Bylaws
provide that any vacancies on the board of directors, including vacancies
resulting from an increase in the number of directors, may be filled by a
majority vote of the remaining members of the board (though less than a quorum)
or by a sole remaining director or by the shareholders. Each person so selected
shall be a director to serve for the balance of the unexpired term.
REMOVAL OF DIRECTORS
Under Colorado law, a director of a corporation that does not have
cumulative voting may be removed with or without cause with the approval of a
majority of the outstanding shares entitled to vote at an election of directors.
In the case of a Colorado corporation having cumulative voting, if less than the
entire board is to be removed, a director may not be removed without cause if
the number of shares voted against such removal would be sufficient to elect the
director under cumulative voting. The Jones Intercable Bylaws provide that any
director may be removed at any time, with or without cause, if the number of
votes cast in favor of removal exceeds the number of votes cast against removal
at a meeting expressly called for that purpose. Only the shareholders of the
voting group that elected the director may participate in the vote to remove the
director.
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With two exceptions under Pennsylvania law, the holders of a majority of the
shares entitled to vote at an election of directors may remove any director,
with or without cause. Those two exceptions are as follows:
- if the corporation has a classified board, shareholders may remove a
director only for cause; and
- if the corporation has cumulative voting, and less than the entire board
of directors is to be removed, then no director may be removed without
cause if the votes cast against his removal would be sufficient to elect
him if cumulatively voted at an election of the entire board of directors,
or if there are classes of directors, at an election of the class of
directors of which he or she is a part.
Comcast's Bylaws correspond to Pennsylvania law and its board is not
classified nor does Comcast have cumulative voting; therefore, a majority of the
shareholders entitled to elect directors may remove a director, with or without
cause.
INTERESTED DIRECTOR TRANSACTIONS
Under Colorado law, certain contracts or transactions in which one or more
of a corporations' directors has an interest are not void or voidable because of
such interest provided that certain conditions, such as obtaining the required
approval and fulfilling the requirements of good faith and full disclosure, are
met. Pursuant to Colorado law:
- the material facts as to the interested director's relationship or
interest in the transaction are disclosed or are known to the board of
directors, or a committee of the board of directors, and the board of
directors or committee in good faith authorizes, approves, or ratifies the
interested director transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested directors are
less than a quorum; or
- the material facts as to the interested director's relationship or
interest in the transaction are disclosed or are known to the shareholders
entitled to vote thereon, and the interested director transaction is
specifically authorized, approved, or ratified in good faith by a vote of
the shareholders; or
- the interested director transaction is fair as to the corporation.
The Jones Intercable Articles of Incorporation provide that interested
director transactions are not invalid provided that the interest is disclosed or
is known to a majority of the board of directors. In addition, interested
directors are counted for determining whether a quorum is present at a meeting
of the board and interested directors may vote to authorize the transaction in
which they are interested.
Pennsylvania law provides rules for transactions between a corporation and
one or more of its directors or between a corporation and another entity in
which the corporation's director is also a director or in which the director has
a financial interest. Under the laws of Pennsylvania, such a transaction is not
void or voidable solely because:
- of the director's interest;
- the interested director was present at or participated in the meeting at
which the transaction was authorized; or
- the interested director's vote counted in the authorization of the
transaction.
Such a transaction is not void or voidable provided:
- the board of directors knows or learns of the material facts regarding the
director's interest and the board authorizes the transaction by the
affirmative vote of a majority of disinterested directors; even though the
disinterested directors are less than a quorum.
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- the shareholders entitled to vote on the transaction know or are told the
material facts regarding the director's interest, and the shareholders
approve in good faith the transaction; or
- the transaction is fair to the corporation as of the time it is
authorized, approved or ratified by the board of directors or
shareholders.
Comcast's Articles of Incorporation and Bylaws do not alter the statutory
rules regarding interested director transactions.
SHAREHOLDER RECORDS
Colorado law allows any shareholder to inspect the shareholder list for a
purpose reasonably related to such person's interests as a shareholder. Colorado
law limits the inspection rights to periods after notice of a meeting through
and including the time of the meeting. Colorado law allows any shareholder to
inspect the corporate records containing the corporation's bylaws, articles of
incorporation, corporate minutes of shareholder meetings and actions and written
communications to the shareholders for the previous three years upon giving the
corporation five days written notice of such demand to inspect the books.
Colorado law also grants certain shareholders a more extensive right to inspect
other corporate records.
Under Pennsylvania law, every shareholder has a statutory right to inspect
the stock list or books and records of a corporation for a proper purpose during
the usual hours for business upon submitting a written verified demand stating
his or her purpose. If a corporation does not grant inspection to a shareholder
within five business days of a demand, the shareholder may apply to the court
for an order to enforce his or her demand. A proper purpose is any purpose
reasonably related to such person's status as a shareholder in a corporation.
SHAREHOLDER DERIVATIVE SUITS
Under Colorado law, a shareholder may bring a derivative action on behalf of
the corporation only if the shareholder was a shareholder of the corporation at
the time of the transaction in question or if his or her stock thereafter
devolved upon him or her by operation of law. Colorado law provides that the
corporation or the defendant in a derivative suit may make a motion to the court
for an order requiring the plaintiff shareholder to furnish a security bond.
Pennsylvania law provides that a shareholder may bring a derivative action
on behalf of the corporation only if the shareholder was a shareholder of the
corporation or owner of a beneficial interest in the shares at the time of the
transaction in question, or that the shares or beneficial interest in the shares
evolved by operation of law from a person who owned the shares or beneficial
interest at that time. The above requirement may be waived, in the discretion of
the court, if disqualification of the claim will result in serious injustice.
Pennsylvania law also provides that, unless the shareholders maintaining the
proceeding meet certain minimum share ownership requirements, the corporation is
entitled to require the plaintiffs to give security for the reasonable expenses
associated with the proceeding and any possible indemnification that may be
required.
DISSOLUTION
Under Colorado law, if the dissolution is initially approved by the board of
directors, it may be approved in an "existing corporation", such as Jones
Intercable, by two-thirds of the outstanding shares of the corporation's stock
entitled to vote. In the event of such a board-initiated dissolution, Colorado
law allows a Colorado corporation to include in its articles of incorporation a
different voting requirement in connection with dissolutions. The Jones
Intercable Articles of Incorporation and Bylaws do not alter the voting
requirement in connection with a dissolution of the corporation.
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Under Pennsylvania law, if the board of directors adopts a resolution
recommending to dissolve the corporation, the shareholders must adopt the
resolution by the affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon.
LEGAL MATTERS
The validity of Comcast's Class A Special Common Stock to be issued pursuant
to Comcast's exchange offer will be passed upon by Arthur R. Block, Esquire,
Senior Deputy General Counsel.
Comcast has received an opinion from its counsel, Dechert Price & Rhoads,
regarding certain income tax consequences with respect to the merger.
EXPERTS
The consolidated financial statements and the related financial statement
schedules incorporated in this proxy statement/prospectus by reference from
Comcast's Annual Report on Form 10-K for the year ended December 31, 1998 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The consolidated balance sheets of Jones Intercable and its subsidiaries as
of December 31, 1998 and 1997 and the related consolidated statements of
operations, shareholders equity and cash flows for each of the years in the
three year period ended December 31, 1998, have been incorporated by reference
to Jones Intercable's Annual Report on Form 10-K for the year ended
December 31, 1998 in reliance upon the report of Arthur Andersen LLP,
independent certified public accountants, given on the authority of said firm as
an expert in accounting and auditing.
The consolidated financial statements of QVC, Inc. and subsidiaries, as of
December 31, 1998 and 1997 and for each of the years in the three-year period
ended December 31, 1998, have been audited by KPMG LLP, independent certified
public accountants, as stated in their report, which is included as an exhibit
to Comcast's annual report on Form 10-K for the fiscal year ended December 31,
1998 and incorporated herein by reference in reliance upon the authority of said
firm as experts in accounting and auditing.
FUTURE SHAREHOLDER PROPOSALS
BY SHAREHOLDERS OF JONES INTERCABLE
If the merger is consummated, there will be no public shareholders of Jones
Intercable and no public participation in any future meetings of shareholders of
Jones Intercable. However, if the merger is not consummated, Jones Intercable's
public shareholders will continue to be entitled to attend and participate in
Jones Intercable's shareholder meetings. If the merger is not consummated, any
proposals by shareholders intended to be presented at the 2000 annual meeting
must be received by Jones Intercable no later than April 15, 2000 in order to be
considered by the Board of Directors of Jones Intercable for inclusion in Jones
Intercable's 2000 proxy statement.
WHERE YOU CAN FIND MORE INFORMATION
Comcast has filed a registration statement on Form S-4 regarding the merger
with the Securities and Exchange Commission. This proxy statement/prospectus is
a part of the registration statement but does not contain all of the information
included in the registration statement. References in this proxy
statement/prospectus to any of Comcast's contracts or other documents are not
necessarily complete and you should refer to the exhibits filed with the
registration statement for copies of the actual contracts or documents. You
should refer to the registration statement, and its exhibits for further
information about Comcast, its Class A Special Common Stock and the merger
agreement. You may
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read and copy the registration statement, the related exhibits and the other
materials we file with the SEC at the following locations in Washington D.C.,
New York, New York and Chicago, Illinois:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional
450 Fifth Street, N.W. 7 World Trade Center Office
Room 1024 Suite 1300 Citicorp Center
Washington, D.C. 20549 New York, New York 10048 500 West Madison Street
Suite 1400
Chicago, Illinois
60661-2511
</TABLE>
Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. The SEC also maintains an Internet site
that contains reports, proxy and information statements and other information
regarding issuers that file reports with the SEC, including Comcast and Jones
Intercable. The site's address is http://www.sec.gov.
Comcast and Jones Intercable file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy any
of these filings at the SEC's Internet site or at the SEC's public reference
rooms. You can request copies of those filings, upon payment of a duplicating
fee, by writing to the SEC. Comcast and Jones Intercable's SEC filings are also
available to the public from commercial document retrieval services.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information into this proxy
statement/prospectus, which means that we can disclose important information to
you by referring you to another document filed separately with the SEC. This
proxy statement/prospectus incorporates important business and financial
information about us that is not included in or delivered with this proxy
statement/prospectus. The information incorporated by reference is deemed to be
a part of this proxy statement/prospectus, except for any information superseded
by information contained directly in this proxy statement/ prospectus. This
proxy statement/prospectus incorporates by reference the documents set forth
below that Comcast (SEC File No. 0-06983) and Jones Intercable (SEC File
No. 1-09953) have previously filed with the SEC.
- Comcast's Annual Report on Form 10-K for the year ended December 31, 1998.
- Comcast's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999.
- Comcast's Current Reports on Form 8-K dated January 18, 2000,
December 23, 1999, December 22, 1999, December 13, 1999, November 16,
1999, November 16, 1999, November 16, 1999, November 2, 1999, October 12,
1999, August 9, 1999, July 7, 1999, May 26, 1999, May 26, 1999, May 4,
1999, April 7, 1999, March 22, 1999, March 9, 1999, March 9, 1999 and
January 20, 1999.
- The description of Comcast Class A Special Common Stock contained in
Comcast's Registration Statement on Form 8-A/A filed on July 16, 1996
(including any amendment or report filed for the purpose of updating such
description).
- Jones Intercable's Annual Report on Form 10-K for the year ended
December 31, 1998.
- Jones Intercable's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999, June 30, 1999 and September 30, 1999.
- Jones Intercable's Current Reports on Form 8-K dated December 22, 1999,
August 9, 1999, May 26, 1999 and April 7, 1999.
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- The description of Jones Intercable's Common Stock contained in Item 12 of
Jones Intercable's Registration Statement on Form 10 filed on June 13,
1979 (including any amendment or report filed for the purpose of updating
such description).
- The description of Jones Intercable's Class A Common Stock contained in
Jones Intercable's Registration Statement on Form 8-A filed on
January 26, 1981 (including any amendment or report filed for the purpose
of updating such description).
We also incorporate by reference into this proxy statement/prospectus
additional documents that may be filed by us with the SEC from the date of this
proxy statement/prospectus to the date of the expiration of the merger. These
include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements.
We have filed each of these documents with the SEC and they are available
from the SEC's Internet site and public reference rooms described under "Where
You Can Find More Information" above. You may also request a copy of these
filings, at no cost (excluding all exhibits unless we have specifically
incorporated by reference an exhibit in this prospectus), by writing or calling
either of us at the following address or telephone number:
<TABLE>
<S> <C>
Marlene S. Dooner Kelley Claypool
Senior Director, Investor Relations Senior Analyst, Investor Relations
Comcast Corporation Jones Intercable, Inc.
1500 Market Street c/o Comcast Corporation
Philadelphia, Pennsylvania 19102-2148 1500 Market Street
Comcast Investor Relations Hotline: Philadelphia, Pennsylvania 19102-2148
(215) 655-8199 Jones Investor Relations Hotline:
(215) 655-8198
</TABLE>
YOU SHOULD REQUEST DOCUMENTS AT LEAST FIVE BUSINESS DAYS BEFORE THE DATE OF
THE SPECIAL MEETING TO ENSURE TIMELY DELIVERY.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROXY STATEMENT/PROSPECTUS TO VOTE ON THE ADOPTION OF THE
MERGER AND THE MERGER AGREEMENT. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU
WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS. THIS PROXY STATEMENT/PROSPECTUS IS DATED JANUARY 25, 2000.
YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND
NEITHER THE MAILING OF THIS PROXY STATEMENT/PROSPECTUS TO JONES INTERCABLE
SHAREHOLDERS NOR THE ISSUANCE OF COMCAST CLASS A SPECIAL COMMON STOCK IN THE
MERGER SHALL CREATE ANY IMPLICATION TO THE CONTRARY.
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
AMONG
JONES INTERCABLE, INC.,
COMCAST CORPORATION
AND
COMCAST JOIN HOLDINGS, INC.
DATED AS OF DECEMBER 22, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C>
ARTICLE I THE MERGER.......................................................... A-1
Section 1.1. The Merger.................................................. A-1
Section 1.2. Effective Time; Closing..................................... A-2
Section 1.3. Effect of the Merger........................................ A-2
Section 1.4. Conversion of Shares........................................ A-2
Section 1.5. Stock Options............................................... A-2
Section 1.6. Exchange of Shares; Stock Transfer Books.................... A-3
Section 1.7. Fractional Shares........................................... A-3
Section 1.8. Lost Certificates........................................... A-4
Section 1.9. No Dissenters' Rights....................................... A-4
ARTICLE II THE SURVIVING CORPORATION.......................................... A-4
Section 2.1. Certificate of Incorporation................................ A-4
Section 2.2. Bylaws...................................................... A-4
Section 2.3. Directors and Officers...................................... A-4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................... A-4
Section 3.1. Organization and Standing................................... A-4
Section 3.2. Capitalization.............................................. A-5
Section 3.3. Authority for Agreement..................................... A-5
Section 3.4. No Conflict................................................. A-6
Section 3.5. Required Filings and Consents............................... A-6
Section 3.6. Compliance.................................................. A-6
Section 3.7. Reports and Financial Statements............................ A-7
Section 3.8. Registration Statement...................................... A-7
Section 3.9. Company Action.............................................. A-7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB............ A-8
Section 4.1. Organization and Standing................................... A-8
Section 4.2. Capitalization.............................................. A-8
Section 4.3. Authority for Agreement..................................... A-8
Section 4.4. No Conflict................................................. A-8
Section 4.5. Required Filings and Consents............................... A-9
Section 4.6. Registration Statement...................................... A-9
Section 4.7. Reports and Financial Statements............................ A-9
Section 4.8. Ownership of Merger Sub; No Prior Activities................ A-10
ARTICLE V COVENANTS........................................................... A-10
Section 5.1. Conduct of the Business Pending the Merger.................. A-10
Section 5.2. Registration Statement; Other Filings....................... A-10
Section 5.3. Meeting of Company Shareholders............................. A-11
Section 5.4. Access to Information; Confidentiality...................... A-11
Section 5.5. Notification of Certain Matters............................. A-11
Section 5.6. Further Action; Commercially Reasonable Efforts............. A-12
Section 5.7. Shareholder Litigation...................................... A-12
Section 5.8. Indemnification............................................. A-12
Section 5.9. Public Announcements........................................ A-13
Section 5.10. Affiliates.................................................. A-14
</TABLE>
A-i
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<TABLE>
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<S> <C> <C>
Section 5.11. Listing..................................................... A-14
ARTICLE VI CONDITIONS......................................................... A-14
Section 6.1. Conditions to the Obligation of Each Party.................. A-14
Section 6.2. Conditions to Obligations of Parent and Merger Sub to Effect A-14
the Merger..................................................
Section 6.3. Conditions to Obligations of the Company to Effect the A-16
Merger......................................................
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER................................. A-16
Section 7.1. Termination................................................. A-16
Section 7.2. Effect of Termination....................................... A-17
Section 7.3. Amendments.................................................. A-17
Section 7.4. Waiver...................................................... A-18
ARTICLE VIII GENERAL PROVISIONS............................................... A-18
Section 8.1. No Third Party Beneficiaries................................ A-18
Section 8.2. Entire Agreement............................................ A-18
Section 8.3. Succession and Assignment................................... A-18
Section 8.4. Counterparts................................................ A-18
Section 8.5. Headings.................................................... A-18
Section 8.6. Governing Law............................................... A-18
Section 8.7. Severability................................................ A-19
Section 8.8. Specific Performance........................................ A-19
Section 8.9. Construction................................................ A-19
Section 8.10. Non-Survival of Representations and Warranties and A-19
Agreements..................................................
Section 8.11. Certain Definitions......................................... A-19
Section 8.12. Fees and Expenses........................................... A-19
Section 8.13. Notices..................................................... A-20
</TABLE>
A-ii
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of December 22,
1999, among Jones Intercable, Inc., a Colorado corporation (the "Company"),
Comcast Corporation, a Pennsylvania corporation ("Parent"), and Comcast JOIN
Holdings, Inc., a Delaware corporation ("Merger Sub") and wholly owned
subsidiary of Parent.
W I T N E S S E T H:
WHEREAS, as of the date hereof, Parent and its subsidiaries own 2,878,151
shares of the Company's Common Stock, par value $.01 per share (the "Common
Shares"), and 13,782,500 shares of the Company's Class A Common Stock, par value
$0.01 per share (the "Class A Shares")(the Common Shares and Class A Shares are
collectively referred to herein as the "Shares");
WHEREAS, Parent and the Company desire that the Company be merged with and
into Merger Sub, on the terms and conditions set forth herein;
WHEREAS, a special committee (the "Special Committee") comprised of the
independent directors of the Board of Directors of the Company (the "Company
Board") has unanimously determined that the Merger (as defined herein) is fair
to and in the best interests of the shareholders of the Company other than
Parent and its Affiliates (the "Public Shareholders") and has unanimously
approved and adopted this Agreement and the Merger and has unanimously
recommended that the Company Board and the shareholders of the Company approve
and adopt this Agreement and the Merger;
WHEREAS, the Company has received the written opinion of Donaldson,
Lufkin & Jenrette Securities Corporation (the "Financial Advisor"), the
financial advisor to the Special Committee and the Company, that the
consideration to be received by the Public Shareholders for their Shares in the
Merger is fair to the Public Shareholders from a financial point of view;
WHEREAS, the Company Board has, by the unanimous action of the directors
present and voting, determined that the Merger is fair to and in the best
interests of the Public Shareholders and has resolved to approve and adopt this
Agreement and the Merger and to recommend the approval and adoption of this
Agreement and the Merger by the Company's shareholders;
WHEREAS, the respective Boards of Directors of Parent, and Merger Sub have
deemed it advisable and in the best interests of their respective shareholders
to consummate, and have approved, the merger of the Company with and into Merger
Sub (the "Merger"), upon the terms and subject to the conditions set forth
herein; and
WHEREAS, the Merger is intended to qualify for Federal income tax purposes
as a tax-free reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
Section 1.1. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the applicable provisions of the
Colorado Business Corporation Act (the "CBCA") and the Delaware General
Corporation Law (the "DGCL"), at the Effective Time (as defined herein) the
Company shall be merged with and into Merger Sub. As a result of the Merger, the
separate corporate existence of the Company shall cease and Merger Sub shall
continue as the surviving corporation of the Merger. In its capacity as the
surviving corporation of the Merger, Merger Sub is sometimes referred to herein
as the "Surviving Corporation."
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Section 1.2. EFFECTIVE TIME; CLOSING. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VI hereof or on
such later date as may be mutually agreed to by Parent and the Company, the
parties hereto shall cause the Merger to be consummated by filing articles of
merger (the "Articles of Merger") with the Secretary of State of the State of
Colorado, by filing a certificate of merger (the "Certificate of Merger") with
the Secretary of State of the State of Delaware, and making all other filings or
recordings required under the CBCA and the DGCL in connection with the Merger,
in such form as is required by, and executed in accordance with the relevant
provisions of, the CBCA and the DGCL. The Merger shall become effective at such
time as the Articles of Merger are duly filed with the Secretary of State of the
State of Colorado and the Certificate of Merger is duly filed with the Secretary
of State of the State of Delaware, or at such other time as the parties hereto
agree shall be specified in the Articles of Merger and the Certificate of Merger
(the date and time the Merger becomes effective, the "Effective Time"). On the
date of such filing, a closing shall be held at the offices of Dechert Price &
Rhoads, 4000 Bell Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania
19103, or such other place as the parties shall agree.
Section 1.3. EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the CBCA and the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities, obligations, restrictions, disabilities and duties of the
Company and Merger Sub shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
Section 1.4. CONVERSION OF SHARES. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the Effective
Time (other than Shares owned by Parent or Merger Sub and other than Shares
owned by the Company as treasury stock) shall be cancelled and shall be
converted automatically into the right to receive 1.4 shares of the Class A
Special Common Stock, par value $1.00 per share (the "Class A Special Common
Stock") of Parent. For purposes of this Agreement, the term "Merger
Consideration" means the shares of Class A Special Common Stock to be
delivered in exchange for the Shares pursuant to this Section 1.4(a)
together with any cash paid in lieu of fractional shares pursuant to
Section 1.7, and the term "Exchange Ratio" means the ratio of 1.4 shares of
Class A Special Common Stock to one Share. The Exchange Ratio shall be
adjusted to reflect fully the effect of any stock split, reverse stock
split, stock dividend, recapitalization or other like change without receipt
of consideration with respect to either the Shares or the Class A Special
Common Stock occurring on or after the date hereof and prior to the
Effective Time.
(b) Each Share issued and outstanding immediately prior to the Effective
Time owned by Parent or Merger Sub, and each Share that is owned by the
Company as treasury stock shall be canceled and no payment or distribution
shall be made with respect thereto.
(c) Each share of Common Stock, par value $0.01 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall remain
outstanding and shall constitute one (1) validly issued, fully paid and
nonassessable share of Common Stock, par value $0.01 per share, of the
Surviving Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
Section 1.5. STOCK OPTIONS. As of the Effective Time, by virtue of the
Merger and without any action on the part of holders thereof, each option (a
"Company Option") which has been granted under the Company's 1992 Stock Option
Plan (the "Company Stock Option Plan") and is outstanding at the Effective Time,
whether or not then exercisable, shall be immediately exercisable in accordance
with Section 7.7. of the Company Stock Option Plan and, unless exercised, shall
expire in accordance with Article XII of the Company Stock Option Plan. At least
three days before the anticipated
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Effective Time, Parent shall deliver to each holder of a Company Option an
appropriate notice setting forth the holder's rights with respect to such
Company Options as described in the preceding sentence and shall notify each
holder that the Company Options may be exercised conditioned upon the occurrence
of the Effective Time and that any Company Options not exercised at the
Effective Time shall expire.
Section 1.6. EXCHANGE OF SHARES; STOCK TRANSFER BOOKS.
(a) Parent shall designate a bank, trust company or transfer agent
reasonably satisfactory to the Company to act as the Exchange Agent (the
"Exchange Agent").
(b) As promptly as practicable, but in no event later than five business
days after the Effective Time, Parent shall cause the Exchange Agent to mail
to each record holder, as of the Effective Time, of an outstanding
certificate or certificates that immediately prior to the Effective Time
represented the Shares (collectively, the "Certificates") a form letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) and instructions for use in
effecting the surrender of the Certificates for exchange and receiving the
Merger Consideration to which such holder shall be entitled under this
Article I.
(c) Upon surrender to the Exchange Agent of a Certificate, together with
such letter of transmittal duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor that number of shares of
Class A Special Common Stock that such holder has the right to receive under
this Article I, and such Certificate shall forthwith be cancelled. If any
shares of Class A Special Common Stock are to be issued to a person other
than the person in whose name the surrendered Certificate is registered, it
shall be a condition of exchange that such surrendered Certificate shall be
properly endorsed or otherwise in proper form for transfer and that the
person requesting such exchange shall pay any transfer or other taxes
required by reason of the exchange by a person other than the registered
holder of the Certificate surrendered or such person shall establish to the
satisfaction of Parent that such tax has been paid or is not applicable.
Until surrendered in accordance with the provisions of this Section 1.6,
each Certificate shall represent, for all purposes, the right to receive the
Merger Consideration in respect of the number of Shares evidenced by such
Certificate. No dividends or other distributions that are declared after the
Effective Time on shares of Class A Special Common Stock and payable to the
holders of record thereof after the Effective Time will be paid to holders
of Certificates until such holders surrender their Certificates. Upon such
surrender, Parent shall deposit with the Exchange Agent and shall cause the
Exchange Agent to pay to the record holders of the shares of Class A Special
Common Stock representing Merger Consideration, the dividends or other
distributions, excluding interest, that became payable after the Effective
Time and were not paid because of the delay in surrendering Certificates for
exchange.
(d) From and after the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the Shares that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to Parent or the Surviving Corporation, they
shall be cancelled and exchanged as provided in this Article I.
(e) None of Parent, the Company or the Surviving Corporation shall be
liable to any holder of Certificates with respect to any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 1.7. FRACTIONAL SHARES. Notwithstanding any other provision of
this Agreement, each holder of Shares who upon surrender of Certificates would
be entitled to receive fractional shares of Class A Special Common Stock shall
not be entitled to receive dividends on or vote such fractional shares of
Class A Special Common Stock and shall receive, in lieu of such fractional
shares of Class A
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Special Common Stock, cash or an amount equal to such fraction multiplied by the
Market Value. "Market Value" shall mean the closing price of Class A Special
Common Stock as reported on the Nasdaq National Market on the trading day
immediately preceding the date on which the Effective Time occurs. All
references in this Agreement to Class A Special Common Stock to be issued as
Merger Consideration shall be deemed to include any cash in lieu of fractional
shares of Class A Special Common Stock payable pursuant to this Section 1.7.
Section 1.8. LOST CERTIFICATES. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of the fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Exchange Agent, the posting by such person of a bond in such reasonable
amount as Parent may direct as indemnity against any claim that may be made
against it with respect to such Certificate, Parent will issue in exchange for
such lost, stolen or destroyed Certificate, the shares of Class A Special Common
Stock and any cash in lieu of fractional shares, and any unpaid dividends and
distributions on shares of Class A Special Common Stock deliverable in respect
thereof pursuant to this Agreement.
Section 1.9. NO DISSENTERS' RIGHTS. In accordance with Section 7-113-102
of the CBCA, holders of Shares shall not be entitled to dissenters' rights with
respect to the Merger.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1. CERTIFICATE OF INCORPORATION. At the Effective Time and
subject to the terms of SECTION 5.8 hereof, the certificate of incorporation of
Merger Sub in effect at the Effective Time shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.
Section 2.2. BYLAWS. Subject to the terms of Section 5.8 hereof, the
bylaws of Merger Sub in effect at the Effective Time shall be the bylaws of the
Surviving Corporation until thereafter amended as provided therein or by
applicable law.
Section 2.3. DIRECTORS AND OFFICERS. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Merger Sub at the Effective Time shall be
the directors of the Surviving Corporation, and (ii) the officers of Merger Sub
at the Effective Time shall continue as the officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub as follows:
Section 3.1. ORGANIZATION AND STANDING. The Company and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has full
corporate power and authority and all necessary governmental approvals to own,
lease and operate its properties and to conduct its business as presently
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority and governmental approvals would not,
individually or in the aggregate, have a Material Adverse Effect (as defined
herein) on the Company. The Company and each of its subsidiaries is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for such failures to be so qualified or licensed
and in good standing that
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would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. The Company has furnished to Parent true and complete copies of its
articles of incorporation (the "Company Articles of Incorporation") and bylaws
(the "Company Bylaws"), each as amended to date, which documents are in full
force and effect. Neither the Company nor any of its subsidiaries is in
violation of any provision of its articles of incorporation, bylaws or
equivalent organizational documents. "Material Adverse Effect" shall mean, with
respect to any party hereto, any change, event or effect that, when taken
together with all other adverse changes, events or effects, is or is reasonably
likely to be materially adverse to the business, operations, prospects,
properties, condition (financial or otherwise), assets, or liabilities
(including, without limitation, contingent liabilities) of such party and its
subsidiaries, taken as a whole.
Section 3.2. CAPITALIZATION. The authorized capital stock of the Company
consists of 5,550,000 Common Shares and 60,000,000 Class A Shares. As of
November 30, 1999, (i) 5,113,021 Common Shares and 36,937,420 Class A Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, (ii) no Common Shares and no Class A Shares are held in the
treasury of the Company, and (iii) 21,225 Company Options were outstanding
pursuant the Company Stock Option Plan, each such option entitling the holder
thereof to purchase one Class A Share and 21,225 Class A Shares are authorized
and reserved for future issuance pursuant to the exercise of such Company
Options. The Company has previously furnished to Parent a detailed schedule of
outstanding Company Options including the exercise prices, vesting schedules and
existing provisions therefore. Except as set forth above, there are no options,
warrants, convertible securities, subscriptions, stock appreciation rights,
phantom stock plans or stock equivalents or other rights, agreements,
arrangements or commitments (contingent or otherwise) of any character issued or
authorized by the Company relating to the issued or unissued capital stock of
the Company or obligating the Company to issue or sell any shares of capital
stock of, or options, warrants, convertible securities, subscriptions or other
equity interests in, the Company. All Shares subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable.
Section 3.3. AUTHORITY FOR AGREEMENT. The Company has all necessary power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger and the transactions contemplated by this
Agreement. The execution, delivery and performance by the Company of this
Agreement, and the consummation by the Company of the Merger and the
transactions contemplated by this Agreement, have been duly authorized by all
necessary corporate action (including without limitation the unanimous approval
of the members of the Special Committee) and no other corporate proceedings on
the part of the Company are necessary to authorize this Agreement or to
consummate the Merger or the transactions contemplated by this Agreement (other
than, with respect to the Merger, the approval and adoption of the Merger and
this Agreement by the affirmative vote of (i) the holders of two-thirds of the
outstanding Common Shares voting as a single class, (ii) the holders of
two-thirds of the outstanding Class A Shares voting as a single class and
(iii) the holders of a majority of the outstanding Shares that are not
beneficially owned by Parent or its Affiliates voting together as a single class
with each such Share being entitled to one vote for purposes of the approval set
forth in this clause (iii) (the approvals referred to in clauses (i), (ii) and
(iii) are sometimes referred to herein as the "Company Shareholder Approvals"),
and the filing and recordation of appropriate merger documents as required by
the CBCA and the DGCL). This Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by
Parent and Merger Sub, constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. The
Company Shareholder Approvals are the only votes of the Company's shareholders
necessary to approve this Agreement, the Merger and the transactions
contemplated by this Agreement.
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Section 3.4. NO CONFLICT. Except with respect to receipt of any applicable
Franchise Approvals and FCC Consents (each as defined herein), the execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company and the consummation of the Merger and the transactions
contemplated by this Agreement will not, (i) conflict with or violate the
Company Articles of Incorporation or Company Bylaws, (ii) conflict with or
violate any United States federal state or local or any foreign statute, law,
rule, regulation, ordinance, code, order, judgment, decree or any other
requirement or rule of law (a "Law") applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any property or asset of any of them is
bound or affected, except in the case of clauses (ii) and (iii) above for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company, or prevent or materially delay the performance by the Company of any of
its obligations under this Agreement or the consummation of the Merger or the
transactions contemplated by this Agreement.
Section 3.5. REQUIRED FILINGS AND CONSENTS. The execution and delivery of
this Agreement by the Company do not, and the performance of this Agreement by
the Company will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any United States federal, state or local or
any foreign government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), except (i) for applicable requirements, if any, of state
securities or "blue sky" laws ("Blue Sky Laws") and filing and recordation of
appropriate merger documents as required by the CBCA and the DGCL, (ii) the
filing by Parent and the Company of the Transaction Disclosure Documents (as
defined herein) with the Securities and Exchange Commission (the "SEC") in
accordance with the Securities Act of 1933, as amended (the "Securities Act")
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(iii) for applicable actions, if any, by the Federal Communications Commission
(the "FCC") granting its consent to the transfer of ownership of all licenses,
permits, construction permits and other authorizations issued by the FCC in
connection with the business and operations of the Company and its subsidiaries,
in connection with the consummation of the Merger and the transactions
contemplated hereby (the "FCC Consents") and for consents or approvals of, or
notices to, such analogous state or local regulatory authorities with respect to
transfer of ownership, in connection with the Merger and the transactions
contemplated hereby, of any license, franchise (including without limitation any
written "Franchise" within the meaning of Section 602(8) of the Communications
Act), permit, construction permit or other authorization issued by such state or
local regulatory authorities and held by the Company or its subsidiaries (the
"Franchise Approvals"), and (iv) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company, or prevent or materially delay the performance by the Company of
any of its obligations under this Agreement or the consummation of the Merger or
the transactions contemplated by this Agreement.
Section 3.6. COMPLIANCE. Neither the Company nor any of its subsidiaries
is in conflict with, or in default or violation of, (i) any Law applicable to
the Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected, or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or any property or
asset of the Company or any of its subsidiaries is bound or affected, except in
the case of clauses (i) and (ii) above for any such conflicts, defaults or
violations
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that would not, individually or in the aggregate, have a Material Adverse Effect
on the Company, or prevent or materially delay the performance by the Company of
any of its obligations under this Agreement or the consummation of the Merger or
the transactions contemplated by this Agreement.
Section 3.7. REPORTS AND FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and documents required to
be filed by it with the SEC since December 31, 1998, and has heretofore made
available to Parent, in the form filed with the SEC, (i) its Annual Report
on Form 10-K for the fiscal year ended December 31, 1998, and (ii) its
Quarterly Reports on Form 10-Q for the periods ended March 31, June 30 and
September 30, 1999 (the forms, reports and other documents referred to in
clauses (i) and (ii) above, together with any amendments or supplements
thereto, being referred to herein, collectively, as the "Company SEC
Reports"). The Company SEC Reports (i) were prepared in all material
respects in accordance with the applicable requirements of the Securities
Act and the Exchange Act, as the case may be, and the rules and regulations
thereunder and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
(b) Each of the consolidated financial statements contained in the
Company SEC Reports complies as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto and was prepared in accordance with United
States generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of the unaudited interim
financial statements, as permitted by Form 10-Q under the Exchange Act) and
each fairly presented the consolidated financial position, results of
operations and cash flows of the Company and its consolidated subsidiaries
as at the respective dates thereof and for the respective periods indicated
therein.
Section 3.8. REGISTRATION STATEMENT. None of the information to be
supplied by the Company for inclusion or incorporation by reference in the
Registration Statement will, at the time that the Registration Statement is
declared effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any event with
respect to the Company should occur that is required to be described in an
amendment of, or a supplement to, the Registration Statement, such event shall
be so described, and such amendment or supplement shall be promptly filed with
the SEC and, as required by law, disseminated to the shareholders of the
Company, and such amendment or supplement shall comply in all material respects
with all provisions of the Securities Act. For purposes of this Section 3.8, any
statement which is made or incorporated by reference in the Registration
Statement shall be deemed modified or superseded to the extent any later filed
document incorporated by reference in the Registration Statement or any
statement included in the Registration Statement modifies or supersedes such
earlier statement.
Section 3.9. COMPANY ACTION.
The Company represents that (i) at a meeting duly called and held on
December 21, 1999, the Special Committee has unanimously (A) determined that
this Agreement and the transactions contemplated hereby, including the Merger,
are fair to and in the best interests of the Public Shareholders, (B) approved
and authorized this Agreement, the Merger and the transactions contemplated
hereby, and (C) recommended that the shareholders of the Company approve and
adopt this Agreement and the Merger, (ii) at a meeting duly called and held on
December 21, 1999, the Company Board has by unanimous vote of all directors
present and voting and based in part upon the approval and recommendation of the
Special Committee set forth in the preceding clause (i)
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(A) determined that this Agreement and the transactions contemplated hereby,
including the Merger, are fair to and in the best interests of the Public
Shareholders, (B) approved and authorized this Agreement, the Merger and the
transactions contemplated hereby, and (C) recommended that the shareholders of
the Company approve and adopt this Agreement and the Merger, and (iii) the
Financial Advisor has delivered to the Special Committee and to the Company
Board its written opinion dated December 21, 1999 (the "Fairness Opinion") that
the consideration to be received by the Public Shareholders in the Merger is
fair to such holders from a financial point of view. A copy of such opinion has
been provided to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows:
Section 4.1. ORGANIZATION AND STANDING. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has full corporate power and authority
to conduct its business as presently conducted and to enter into and perform
this Agreement and to consummate the Merger and the transactions contemplated by
this Agreement.
Section 4.2. CAPITALIZATION. The authorized capital stock of Parent
consists of 200,000,000 shares of Class A Common Stock, par value $1.00 per
share ("Class A Common Stock"), 2,500,000,000 shares of Class A Special Common
Stock and 50,000,000 shares of Class B Common Stock, par value $1.00 per share
("Class B Common Stock"). As of November 30, 1999, 25,993,380 shares of Class A
Common Stock, 716,334,793 shares of Class A Special Common Stock and 9,444,375
shares of Class B Common Stock were issued and outstanding. All outstanding
shares of Parent's capital stock are, and the shares of Class A Special Common
Stock to be issued in accordance with this Agreement, when issued in accordance
with this Agreement, will be validly issued, fully paid and non-assessable.
Section 4.3. AUTHORITY FOR AGREEMENT. Each of Parent and Merger Sub has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the Merger and
the transactions contemplated by this Agreement. The execution, delivery and
performance by each of Parent and Merger Sub of this Agreement, and the
consummation by each of Parent and Merger Sub of the transactions contemplated
by this Agreement, has been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or to consummate the Merger or the
transactions contemplated by this Agreement (other than, with respect to the
Merger, the filing and recordation of appropriate merger documents as required
by the CBCA and the DGCL). This Agreement has been duly executed and delivered
by Parent and Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub enforceable against Parent and Merger Sub in
accordance with its terms.
Section 4.4. NO CONFLICT. Except with respect to receipt of any applicable
Franchise Approvals and FCC Consents, the execution and delivery of this
Agreement by Parent and Merger Sub do not, and the performance of this Agreement
by Parent and Merger Sub and the consummation of the Merger and the transactions
contemplated by this Agreement will not, (i) conflict with or violate the
articles of incorporation or bylaws of Parent or Merger Sub, (ii) conflict with
or violate any Law applicable to Parent or Merger Sub or any of their respective
subsidiaries or by which any property or asset of Parent or Merger Sub or their
respective subsidiaries is bound or affected, or (iii) result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of,
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or result in the creation of a lien or other encumbrance on any property or
asset of Parent or Merger Sub or their respective subsidiaries pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Merger Sub or
their respective subsidiaries is a party or by which Parent or Merger Sub or
their respective subsidiaries or any property or asset of any of them is bound
or affected, except in the case of clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, prevent or delay the performance by Parent or
Merger Sub of their respective obligations under this Agreement or the
consummation of the Merger or the transactions contemplated by this Agreement.
Section 4.5. REQUIRED FILINGS AND CONSENTS. The execution and delivery of
this Agreement by Parent and Merger Sub do not, and the performance of this
Agreement by Parent and Merger Sub will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity, except (i) for applicable requirements, if any, of state securities or
Blue Sky Laws and filing and recordation of appropriate merger documents as
required by the CBCA and the DGCL, (ii) the filing by Parent and the Company of
the Transaction Disclosure Documents with the SEC in accordance with the
Securities Act and the Exchange Act, (iii) for applicable FCC Consents and
Franchise Approvals, if any, and (iv) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not, individually or in the aggregate, prevent or delay the performance by
Parent or Merger Sub of any of their respective obligations under this Agreement
or the consummation of the Merger or the transactions contemplated by this
Agreement.
Section 4.6. REGISTRATION STATEMENT. None of the information to be
supplied by Parent or Merger Sub for inclusion or incorporation by reference in
the Registration Statement (except for information about the Company furnished
by the Company to Parent) will, at the time the Registration Statement is
declared effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any event with
respect to Parent, its officers and directors or any of its subsidiaries shall
occur and is required to be described in an amendment of, or a supplement to,
the Registration Statement, such event shall be so described, and such amendment
or supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the shareholders of the Company. For purposes of this
Section 4.6, any statement which is made or incorporated by reference in the
Registration Statement shall be deemed modified or superseded to the extent any
later filed document incorporated by reference in the Registration Statement or
any statement included in the Registration Statement modifies or supersedes such
earlier statement.
Section 4.7. REPORTS AND FINANCIAL STATEMENTS.
(a) Parent has filed all forms, reports and documents required to be
filed by it with the SEC since December 31, 1998, and has made available to
the Company, in the form filed with the SEC, (i) its Annual Report on
Form 10-K for the fiscal year ended December 31, 1998, and (ii) its
Quarterly Reports on Form 10-Q for the periods ended March 31, June 30 and
September 30, 1999 (the forms, reports and other documents referred to in
clauses (i) and (ii) above, together with any amendments or supplements
thereto, being referred to herein, collectively, as the "Parent SEC
Reports"). The Parent SEC Reports (i) were prepared in all material respects
in accordance with the applicable requirements of the Securities Act, and
the Exchange Act, as the case may be, and the rules and regulations
thereunder and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
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(b) Each of the consolidated financial statements contained in the
Parent SEC Reports complies as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto and was prepared in accordance with GAAP
applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto or, in the case of the unaudited
interim financial statements, as permitted by Form 10-Q under the Exchange
Act) and each fairly presented the consolidated financial position, results
of operations and cash flows of Parent and its consolidated subsidiaries as
at the respective dates thereof and for the respective periods indicated
therein.
Section 4.8. OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES.
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the date hereof through the Effective Time, all of the
outstanding capital stock of the Merger Sub will be owned directly by
Parent.
(c) As of the date hereof and as of the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement, Merger Sub
has not and will not have incurred, directly or indirectly, through any
subsidiary or affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
ARTICLE V
COVENANTS
Section 5.1. CONDUCT OF THE BUSINESS PENDING THE MERGER. The Company
covenants and agrees that between the date of this Agreement and the Effective
Time, unless Parent shall have otherwise consented to or approved such action,
(a) the businesses of the Company and its subsidiaries shall be conducted only
in, and the Company and its subsidiaries shall not take any action except in,
the ordinary course of business and in a manner consistent with prior practice,
(b) the Company and its subsidiaries shall use their commercially reasonable
best efforts to preserve substantially intact their business organizations, to
keep available the services of their current officers and employees and to
preserve the current relationships of the Company and its subsidiaries with
customers, suppliers and other persons with which the Company or its
subsidiaries has significant business relations, and (c) the Company and its
subsidiaries shall not take any action that would make the Company's
representations and warranties set forth herein untrue in any material respect.
Section 5.2. REGISTRATION STATEMENT; OTHER FILINGS. (a) As promptly as
practicable after the execution of this Agreement, the Company and Parent will
jointly prepare and file with the SEC a preliminary proxy statement relating to
the Merger and this Agreement (such proxy statement, as amended or supplemented,
the "Proxy Statement"), and Parent will prepare and file with the SEC a
registration statement on Form S-4 (the "Registration Statement"), in which the
Proxy Statement shall be included as a prospectus. Parent will use reasonable
best efforts to cause the Registration Statement to be declared effective under
the Securities Act as soon as practicable after such filing, and will take all
actions required under applicable federal or state securities laws in connection
with the issuance of Parent's shares of Class A Special Common Stock in the
Merger. Each party will notify the other promptly upon the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff or
any other government officials for amendments or supplements to the Proxy
Statement, the Registration Statement or any other filing or for additional
information and will supply the other party with copies of all correspondence
between such party or any of its representatives, on the one hand, and the SEC,
or its staff or any other government officials, on the other hand, with respect
to
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the Registration Statement, the Proxy Statement or the Merger. Whenever any
event occurs that is required to be set forth in an amendment or supplement to
the Registration Statement or the Proxy Statement, the relevant party will
promptly inform the other party of such occurrence and cooperate in filing with
the SEC or its staff or any other government officials, and/or mailing to
shareholders of the Company, such amendment or supplement. The Proxy Statement
and Registration Statement, together with any supplements or amendments thereto,
and any other filings required to be made with the SEC regarding the Merger,
this Agreement and the transactions contemplated hereby, are sometimes referred
to herein as the "Transaction Disclosure Documents."
(b) The Transaction Disclosure Documents will include the recommendation
of the Special Committee in favor of approval of this Agreement (except that
the Special Committee may withdraw, modify or refrain from making such
recommendation to the extent that the Special Committee determines in good
faith after consultation with outside legal counsel that failure to
withdraw, modify or refrain from making such recommendation would constitute
a breach of the Special Committee's fiduciary duties under applicable law).
(c) The Transaction Disclosure Documents will include the recommendation
of the Board of Directors of the Company in favor of approval of this
Agreement (except that the Board of Directors of the Company may withdraw,
modify or refrain from making such recommendation to the extent that the
Board of Directors determines in good faith after consultation with outside
legal counsel that failure to withdraw, modify or refrain from making such
recommendation would constitute a breach of the Board's fiduciary duties
under applicable law).
(d) To the extent that the Special Committee or the Board withdraws,
modifies or refrains from making their respective recommendations pursuant
to Section 5.2(b) or (c) hereof, the Transaction Disclosure Documents will
reflect such action.
(e) The Company represents that the Financial Advisor has consented to
the inclusion of references to, and the text of, the Fairness Opinion in the
Transaction Disclosure Documents.
Section 5.3. MEETING OF COMPANY SHAREHOLDERS. Promptly after the date
hereof, the Company will take all action necessary in accordance with the CBCA
and the Company Articles of Incorporation the Company Bylaws to convene a
meeting of its shareholders (the "Company Shareholders' Meeting") to be held as
promptly as practicable for the purpose of obtaining the Company Shareholder
Approvals. The Company will use its reasonable best efforts to solicit from its
shareholders proxies in favor of the approval of this Agreement and the Merger,
and will take all other action necessary or advisable to secure the vote or
consent of its shareholders required by the CBCA to obtain such approvals.
Parent shall vote, or cause to be voted, all of the Shares then owned by it and
any of its subsidiaries in favor of the approval of this Agreement and the
Merger.
Section 5.4. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) From the date hereof to the Effective Time, the Company and its
officers, directors, employees, auditors and agents shall not impede the
access of Parent and Merger Sub or their officers, directors, employees,
auditors and agents at all reasonable times to the officers, employees,
agents, properties, offices, plants and other facilities, books and records
of the Company and its subsidiaries, and shall furnish Parent and Merger Sub
with financial, operating and other data and information as Parent or Merger
Sub, through its officers, directors, employees, auditors or agents, may
reasonably request.
(b) No investigation pursuant to this Section 5.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 5.5. NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence, or nonoccurrence, of any
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event which would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate and (ii) any failure by such party (or
Merger Sub, in case of Parent) to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 5.5 shall not
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
Section 5.6. FURTHER ACTION; COMMERCIALLY REASONABLE EFFORTS. Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Merger and the other transactions contemplated by this Agreement, including,
without limitation, using commercially reasonable efforts to obtain all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of each Governmental Entity and parties to contracts with the Company and
its subsidiaries as are necessary for the consummation of the Merger and the
other transactions contemplated by this Agreement and to fulfill the conditions
set forth in Article VI. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers of each party to this Agreement and the Surviving
Corporation shall use commercially reasonable efforts to take all such action.
Notwithstanding the foregoing, Parent and Merger Sub shall not be required to
pay any consideration (other than customary filing fees and the like), divest or
otherwise rearrange the composition of any assets or agree to any conditions,
restrictions, requirements or other obligations which Parent determines to be
unreasonably adverse or burdensome to Parent or the Surviving Corporation or
which have any of the effects set forth in clauses (i)--(vi) of Section 6.2(a).
Section 5.7. SHAREHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate in the defense or settlement of any shareholder
litigation against the Company and its directors relating to the transactions
contemplated by this Agreement including the cases styled Susser v. Jones, et
al., Famet v. Jones, et al., Harbor Finance Partners Ltd. v. Jones, et al., and
Harbor Finance Partners Ltd. v. Frenzel, et al., all pending in the District
Court, City and County of Denver, State of Colorado (Case Nos. 99CV5119,
99CV5132, 99CV2568 and 99CV7150); provided, however, that no such settlement
shall be agreed to without Parent's consent.
Section 5.8. INDEMNIFICATION.
(a) It is understood and agreed that all rights to indemnification by
the Company now-existing in favor of each present director and officer of
the Company as provided in the Company Articles of Incorporation or the
Company Bylaws, in each case as in effect on the date of this Agreement, or
pursuant to any other agreements in effect on the date hereof, shall survive
the Merger and shall continue in full force and effect for a period of at
least six (6) years from the Effective Time. Consistent with the foregoing,
for a period of at least six (6) years from the Effective Time, the Articles
of Incorporation and Bylaws of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set
forth, respectively, in the Company Articles of Incorporation and Company
Bylaws, which provisions shall not be amended, repealed or otherwise
modified during such six (6)-year period in any manner that would adversely
affect the rights thereunder of individuals who, immediately prior to the
Effective Time, were directors or officers of the Company.
(b) The Company shall, to the fullest extent permitted under applicable
law and regardless of whether the Merger becomes effective, with respect to
any claim brought within the applicable statute of limitations relating
thereto, indemnify and hold harmless, and, after the Effective Time, the
Surviving Corporation shall, to the fullest extent permitted under
applicable law, indemnify and hold harmless, each present director and
officer of the Company and its subsidiaries (collectively, the "Indemnified
Parties") against all costs and expenses (including attorneys' fees),
judgments,
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fines, losses, claims, damages, liabilities and settlement amounts paid in
connection with any claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), whether civil,
criminal, administrative or investigative, arising out of or pertaining to
any action or omission in their capacity as an officer or director, whether
occurring before or after the Effective Time (and shall pay any expenses in
advance of the final disposition of such action or proceeding to each
Indemnified Party to the fullest extent permitted under the CBCA and the
DGCL, upon receipt from the Indemnified Party to whom expenses are advanced
of any undertaking to repay such advances required under the CBCA and the
DGCL). In the event of any such claim, action, suit, proceeding or
investigation, (i) the Company or the Surviving Corporation, as the case may
be, shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Company or the Surviving Corporation, promptly after statements therefor are
received and (ii) the Company and the Surviving Corporation shall cooperate
in, and may control, the defense of any such matter; provided further that
if any D&O Insurance (as defined herein) in effect at the time shall require
the insurance company to control such defense in order to obtain the full
benefits of such insurance and such provision is consistent with the
provisions of the Company's D&O Insurance existing as of the date of this
Agreement, then the provisions of such policy shall govern. Notwithstanding
the foregoing, neither the Company nor the Surviving Corporation shall be
liable for any settlement effected without its written consent (which
consent shall not be unreasonably withheld). In addition, neither the
Company nor the Surviving Corporation shall be obligated pursuant to this
Section 5.8(b) to pay the fees and expenses of more than one counsel (plus
appropriate local counsel) for all Indemnified Parties in any single action.
All rights under this Section 5.8(b) shall be deemed to be a contract
between the Company and each of the Indemnified Parties.
(c) The Surviving Corporation shall use its reasonable best efforts to
maintain in effect for six (6) years from the Effective Time, if available,
the current directors' and officers' liability insurance policies ("D&O
Insurance") maintained by the Company covering those persons who are
currently covered by such policies (provided that the Surviving Corporation
may substitute therefor policies of at least the same coverage containing
terms and conditions which are not materially less favorable) with respect
to matters occurring prior to the Effective Time; provided, however, that in
no event shall the Surviving Corporation be required to expend pursuant to
this Section 5.8(c) more than an amount per year equal to two hundred
percent (200%) of current annual premiums paid by the Company for such
insurance. In the event that, but for the proviso to the immediately
preceding sentence, the Surviving Corporation would be required to expend
more than two hundred percent (200%) of current annual premiums, the
Surviving Corporation shall obtain the maximum amount of such insurance, if
any, obtainable by payment of annual premiums equal to two hundred percent
(200%) of current annual premiums.
(d) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers all or substantially all of its properties and
assets to any person, then, and in each such case, proper provision shall be
made so that the successors and assigns of the Surviving Corporation shall
assume the obligations set forth in this Section 5.8.
Section 5.9. PUBLIC ANNOUNCEMENTS. Parent and the Company shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the Merger and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange to which Parent or the Company is a party.
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Section 5.10. AFFILIATES. At least 30 days prior to the Effective Time,
the Company and Parent shall agree as to persons (other than Parent and its
subsidiaries) who are, at the time the Merger is submitted for approval to the
shareholders of the Company, "affiliates" of the Company for purposes of
Rule 145 under the Securities Act. The Company shall use its best efforts to
cause each such person to deliver to Parent on or prior to the Effective Time a
letter (an "Affiliate Letter") to the effect that such person will not offer to
sell, sell or otherwise dispose of any shares of Class A Special Common Stock
issued in the Merger, except pursuant to an effective registration statement, in
compliance with Rule 145, as amended from time to time, or in a transaction
which, in the opinion of legal counsel satisfactory to Parent, is exempt from
the registration requirements of the Securities Act. Parent shall not be
required to maintain the effectiveness of the Registration Statement for the
purpose of resale of the Class A Special Common Stock by such affiliates and the
certificates representing the Class A Special Common Stock received by such
affiliates in the Merger shall bear a customary legend regarding applicable
Securities Act restrictions and the provisions of this Section 5.10.
Section 5.11. LISTING. Parent shall use its best efforts to cause the
shares of Class A Special Common Stock to be issued to holders of Common Shares
and Class A Shares pursuant to this Agreement to be listed on the Nasdaq
National Market subject to official notice of issuance, prior to the Effective
Time.
ARTICLE VI
CONDITIONS
Section 6.1. CONDITIONS TO THE OBLIGATION OF EACH PARTY. The respective
obligations of Parent, Merger Sub and the Company to effect the Merger are
subject to the satisfaction of the following conditions, unless waived in
writing by all parties:
(a) SHAREHOLDER APPROVAL. The Company Shareholder Approvals shall have
been obtained.
(b) NO INJUNCTIONS. No temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect.
(c) NO CONSENTS. All actions by or in respect of or filings with any
governmental body, agency, official or authority required to permit the
consummation of the Merger shall have been obtained or made.
(d) REGISTRATION. The Registration Statement (as amended or
supplemented) shall have become effective under the Securities Act and shall
not be subject to any stop order, and no action, suit, proceeding or
investigation by the Commission seeking a stop order or to suspend the
effectiveness of the Registration Statement shall have been initiated or
threatened. Parent shall have received all state securities law or blue sky
permits and authorizations necessary to issue the Merger Consideration as
contemplated hereby and such permits and authorizations shall be in full
force and effect.
(e) NASDAQ LISTING. The shares of Class A Special Common Stock to be
issued in the Merger shall have been authorized for listing on the Nasdaq
National Market subject only to official notice of issuance.
Section 6.2. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB TO EFFECT
THE MERGER. The obligations of Parent and Merger Sub to effect the Merger are
further subject to satisfaction or waiver at or prior to the Effective Time of
the following conditions:
(a) there shall not have been threatened, instituted or be pending any
action, proceeding, application or counterclaim by any Governmental Entity
or by any other person before any court
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or governmental regulatory or administrative agency, authority or tribunal
(i) challenging or seeking to make illegal, materially delay or otherwise
directly or indirectly restrain, prohibit or enjoin or make more costly the
consummation of the Merger and the other transactions contemplated by this
Agreement, (ii) seeking to obtain any damages from the Company, Parent,
Merger Sub or any of their respective Affiliates which directly or
indirectly relate to the consummation of the Merger and the other
transactions contemplated by this Agreement, (iii) seeking to prohibit or
limit the ownership or operation by the Company, Parent, Merger Sub or any
of their subsidiaries of all or any portion of their business or assets, or
to compel the Company, Parent, Merger Sub or any of their subsidiaries to
dispose of or hold separate all or any portion of their businesses or
assets, as a result of the Merger and the other transactions contemplated by
this Agreement; (iv) seeking to impose or confirm limitations on the ability
of Parent or Merger Sub or any of their Affiliates to exercise effectively
full rights of ownership of any Shares or any securities of the Surviving
Corporation, including, without limitation, the right to vote any Shares or
any securities of the Surviving Corporation on all matters properly
presented to the Company's or the Surviving Corporation's shareholders,
including, without limitation, the approval and adoption of the Agreement
and the Merger by the Company's shareholders; (v) seeking to require
divestiture by Parent or Merger Sub or any of their Affiliates or
subsidiaries of any Shares or any securities of the Surviving Corporation;
or (vi) which if adversely determined would have a Material Adverse Effect
on the Company, Parent or the Surviving Corporation or inhibit the ability
of any party to this Agreement to perform its obligations hereunder;
(b) there shall not have been any order or injunction issued, or any Law
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to Parent, Merger Sub, the Company or any subsidiary or Affiliate
of Parent, Merger Sub or the Company which has resulted, or is reasonably
likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) through (vi) of paragraph (a) above;
(c) there shall not have occurred any change, condition, event or
development that has a Material Adverse Effect on the Company since the date
hereof;
(d) the Special Committee and the Board of Directors of the Company each
shall not have amended, withdrawn or modified in a manner adverse to Parent
or Merger Sub its adoption or recommendation of the Merger or this
Agreement, or resolved to do any of the foregoing, and the Fairness Opinion
shall not have been amended, withdrawn or modified in a manner adverse to
Parent or Merger Sub;
(e) the representations and warranties of the Company in this Agreement
which are qualified as to materiality shall be true and correct and the
representations or warranties that are not so qualified shall be true and
correct in all material respects; provided that any breach of a
representation or warranty of the Company of which Parent had actual
knowledge prior to the date hereof or which breach occurred directly as a
result of an action taken at the direction of Parent shall be deemed to have
been waived by Parent to the extent Parent had actual knowledge prior to the
date hereof of such breach or such breach occurred directly as a result of
such action taken at the direction of Parent;
(f) the Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement;
(g) all FCC Consents and Franchise Approvals shall have been obtained,
be in effect and be subject to no limitations, conditions, restrictions or
obligations, except for such consents the failure to obtain would not, and
such limitations, conditions, restrictions or obligations as would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect on the Surviving Corporation; and
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(h) no court, arbitrator or Governmental Entity shall have issued any
order, and there shall not be any statute, rule or regulation restraining or
prohibiting the effective operation of the business of Parent and its
subsidiaries or the Company and its subsidiaries after the Effective Time
that would be reasonably expected to have a Material Adverse Effect on
Parent or the Surviving Corporation.
Section 6.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY TO EFFECT THE
MERGER. The obligations of the Company to effect the Merger are further subject
to satisfaction or waiver at or prior to the Effective Time of the following
conditions:
(a) the representations and warranties of Parent and Merger Sub which
are qualified as to materiality shall be true and correct and the
representations and warranties that are not so qualified shall be true and
correct in all material respects;
(b) Parent and Merger Sub shall have performed in all material respects
all obligations required to be performed by them under this Agreement; and
(c) (i) there shall not have been threatened, instituted or be pending
any action, proceeding, application or counterclaim by any Governmental
Entity or by any other person before any court or governmental regulatory or
administrative agency, authority or tribunal which would be reasonably
expected to have a Material Adverse Effect on Parent; (ii) there shall not
have been any order or injunction issued, or any law enacted, entered,
enforced, promulgated, amended, issued or deemed applicable to Parent,
Merger Sub, the Company or any subsidiary or Affiliate of Parent, Merger Sub
or the Company which has resulted, or is reasonably likely to result in a
Material Adverse Effect on Parent; and (iii) no court, arbitrator or
Governmental Entity shall have issued any order, and there shall not be any
statute, rule or regulation restraining or prohibiting the effective
operation of the business of Parent and its subsidiaries or the Company and
its subsidiaries after the Effective Time that would be reasonably expected
to have a Material Adverse Effect on Parent.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1. TERMINATION. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time, whether before or
after approval of matters presented in connection with the Merger by the
shareholders of the Company:
(a) By mutual written consent duly authorized by the Boards of Directors
of Parent and the Company, if such termination is also approved by the
Special Committee;
(b) By any of Parent, Merger Sub or the Company if any court of
competent jurisdiction or other Governmental Entity shall have issued an
order, decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable;
(c) By any of Parent, Merger Sub or the Company (at the direction of the
Special Committee) if the Effective Time shall not have occurred on or
before December 31, 2000; provided, however, that the right to terminate
this Agreement under this Section 7.1(c) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
primary cause of, or resulted in, the failure of the Effective Time to occur
on or before such date;
(d) By any of Parent, Merger Sub or the Company (at the direction of the
Special Committee) if this Agreement and the Merger shall fail to be
approved and adopted by the shareholders of the Company at the Company
Shareholders' Meeting called for such purpose;
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(e) By Parent or Merger Sub if the Special Committee shall have amended,
withdrawn or modified in a manner adverse to Parent or Merger Sub its
approval or recommendation of the Merger or this Agreement or shall have
resolved to do any of the foregoing or if the Fairness Opinion shall have
been amended, withdrawn or modified in a manner adverse to Parent or Merger
Sub;
(f) by Parent or Merger Sub, if (i) any of the conditions set forth in
Section 6.2 shall have become incapable of fulfillment and shall not have
been waived by Parent and Merger Sub, or (ii) if the Company shall breach in
any material respect any of its representations, warranties or obligations
hereunder and such breach shall not have been cured in all material respects
or waived by Parent or Merger Sub and the Company shall not have provided
reasonable assurance to Parent and Merger Sub that such breach will be cured
in all material respects on or before the Effective Time, but in the case of
clause (ii) Parent or Merger Sub may terminate this agreement only if such
breach, singly or together with all other such breaches, constitutes a
failure of the conditions contained in Section 6.2 as of the date of such
termination; or
(g) by the Company, if (i) any of the conditions set forth in
Section 6.3 shall have become incapable of fulfillment and shall not have
been waived by the Company, (ii) if Parent or Merger Sub shall breach in any
material respect any of their respective representations, warranties or
obligations hereunder and such breach shall not have been cured in all
material respects or waived by the Company and Parent or Merger Sub, as the
case may be, shall not have provided reasonable assurance to the Company
that such breach will be cured in all material respects on or before the
Effective Time, but in the case of clause (ii) the Company may terminate
this agreement only if such breach, singly or together with all other such
breaches, constitutes a failure of the condition contained in Section 6.3 as
of the date of such termination;
provided, however that any party seeking termination pursuant to clause (f) or
(g) hereof shall not be in breach of any of its material representations,
warranties, covenants or agreements contained in this Agreement.
Section 7.2. EFFECT OF TERMINATION.
(a) In the event of the termination of this Agreement pursuant to
Section 7.1 hereof, this Agreement shall forthwith become void, and except
as provided in this Section 7.2 and in Section 8.10, there shall be no
liability on the part of any party hereto, provided that nothing herein
shall relieve any party from liability for any willful breach hereof.
(b) In the event that this Agreement is terminated pursuant to
Section 7.1(e) or pursuant to any other paragraph of Section 7.1 in
circumstances where Parent or Merger Sub had the right to terminate this
Agreement pursuant to Section 7.1(e), then upon such termination, the
Company shall pay to Parent upon demand an amount equal to $8,000,000 in
cash by wire transfer of immediately available funds. In the event the
payment referred to in the preceding sentence is not payable and this
Agreement is terminated pursuant to Section 7.1(d) or pursuant to any other
paragraph of Section 7.1 in circumstances where Parent or Merger Sub had the
right to terminate this Agreement pursuant to Section 7.1(d), then upon such
termination, the Company shall pay to Parent upon demand an amount equal to
$2,000,000 in cash by wire transfer of immediately available funds.
Section 7.3. AMENDMENTS. This Agreement may not be amended except by
action of the board of directors of each of the parties hereto (and, in the case
of the Company, with the approval of the Special Committee) set forth in an
instrument in writing signed on behalf of each of the parties hereto; provided,
however, that after approval of the Merger by the shareholders of the Company,
no amendment may be made without the further approval of the shareholders of the
Company if the effect of such amendment would be to (i) reduce the Merger
Consideration or change the form thereof
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or (ii) alter or change any of the terms and conditions of this Agreement if any
of such alterations or changes, alone or in the aggregate, would be materially
adverse to the shareholders of the Company (other than Parent and its
subsidiaries). This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
Section 7.4. WAIVER. At any time prior to the Effective Time, whether
before or after any of the Company Shareholders' Meeting, any party hereto, by
action taken by its board of directors (and, in the case of the Company, with
the approval of the Special Committee), may (i) extend the time for the
performance of any of the covenants, obligations or other acts of any other
party hereto or (ii) waive any inaccuracy of any representations or warranties
or compliance with any of the agreements, covenants or conditions of any other
party or with any conditions to its own obligations. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party by its duly
authorized officer. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights. The waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other facts
and circumstances and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. NO THIRD PARTY BENEFICIARIES. Other than the provisions of
Section 5.8 hereof, nothing in this Agreement shall confer any rights or
remedies upon any person other than the parties hereto.
Section 8.2. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any prior understandings, agreements, or representations by or among
the parties, written or oral, with respect to the subject matter hereof. In
consideration of the agreements and covenants of Parent and Merger Sub contained
herein and their willingness to enter into this Agreement, the parties hereby
acknowledge, confirm and agree that Parent and Merger Sub are not parties to the
Shareholders Agreement dated as of December 20, 1994 among Glenn R. Jones, Jones
International, Ltd., Bell Canada International Inc. and the Company, as amended,
and none of Parent, Merger Sub or any of their Affiliates (other than the
Company) shall be subject to, or bound by, the terms and conditions of such
agreement.
Section 8.3. SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors. No party may assign either this Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other parties, provided, however, that Merger Sub may freely assign its rights
to another wholly owned subsidiary of Parent without such prior written
approval.
Section 8.4. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 8.5. HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 8.6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without regard
to principles of conflicts of law thereof.
A-18
<PAGE>
Section 8.7. SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
Section 8.8. SPECIFIC PERFORMANCE. The Company acknowledges and agrees
that Parent and Merger Sub would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, the Company agrees that Parent and
Merger Sub shall be entitled to an injunction or injunctions to prevent breaches
of the provisions of this Agreement and to enforce specifically this Agreement
and the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the parties and the
matter, in addition to any other remedy to which it may be entitled, at law or
in equity.
Section 8.9. CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 8.10. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that (i) the agreements set
forth in Articles I and VIII and Sections 5.7, 5.8 and 5.9 shall survive the
Effective Time indefinitely and (ii) the agreements set forth in Section 7.2 and
Article VIII shall survive the termination of this Agreement indefinitely.
Section 8.11. CERTAIN DEFINITIONS. For purposes of this Agreement, the
term "Affiliate" shall have the same meaning as set forth in Rule 12b-2
promulgated under the Exchange Act, and the term "person" shall mean any
individual, corporation, partnership (general or limited), limited liability
company, limited liability partnership, trust, joint venture, joint-stock
company, syndicate, association, entity, unincorporated organization or
government or any political subdivision, agency or instrumentality thereof.
Section 8.12. FEES AND EXPENSES. Subject to Section 7.2, whether or not
the Merger is consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
A-19
<PAGE>
Section 8.13. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses, or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 8.13:
If to Parent or Merger Sub:
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Attention: General Counsel
with copies to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Attention: Barton J. Winokur, Esq.
Peter D. Cripps, Esq.
If to the Company:
Jones Intercable, Inc.
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Attention: General Counsel
with copies to:
Wilmer Cutler & Pickering
2445 M Street N.W.
Washington D.C. 20037-1420
Attention: Russell J. Bruemmer
A-20
<PAGE>
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
<TABLE>
<S> <C> <C>
COMCAST CORPORATION
By: /s/ ARTHUR R. BLOCK
-----------------------------------------
Name: Arthur R. Block
Title: Vice President
COMCAST JOIN HOLDINGS, INC.
By: /s/ ARTHUR R. BLOCK
-----------------------------------------
Name: Arthur R. Block
Title: Vice President
JONES INTERCABLE, INC.
By: /s/ ARTHUR BLOCK
-----------------------------------------
Name: Arthur R. Block
Title: Vice President
</TABLE>
A-21
<PAGE>
APPENDIX B
[LOGO]
December 21, 1999
Special Committee
of the Board of Directors
and the Board of Directors
Jones Intercable, Inc.
P.O. Box 3309
Englewood, Colorado 80155
Ladies and Gentlemen:
You have requested our opinion as to the fairness from a financial point of
view to the stockholders of Jones Intercable, Inc. (the "Company") other than
Comcast Corporation ("Comcast") of the consideration to be received by such
stockholders pursuant to the terms of the Agreement and Plan of Merger, dated as
of December 22, 1999 (the "Agreement"), among Comcast, the Company and Comcast
JOIN Holdings, Inc., a wholly owned subsidiary of Comcast ("Merger Sub")
pursuant to which the Company will be merged (the "Merger") with and into Merger
Sub.
Pursuant to the Agreement, each share of Common Stock and Class A Common
Stock of the Company will be converted into the right to receive 1.4 shares (the
"Exchange Ratio") of Class A Special Common Stock, $1.00 par value per share of
Comcast.
In arriving at our opinion, we have reviewed the draft dated December 21,
1999 of the Agreement. We also have reviewed financial and other information
that was publicly available or furnished to us by the Company and Comcast
including information provided during discussions with their respective
managements. Included in the information provided during discussions with the
respective managements were certain financial projections for the Company
provided to us by the management of the Company and certain financial
projections for Comcast provided to us by the management of Comcast. In
addition, we have compared certain financial and securities data of the Company
and Comcast with various other companies whose securities are traded in public
markets, reviewed the historical stock prices and trading volumes of the common
stock of the Company and Comcast, reviewed prices and premiums paid in certain
other business combinations and conducted such other financial studies, analyses
and investigations as we deemed appropriate for purposes of this opinion. We
were not requested to, nor did we, solicit the interest of any other party in
acquiring the Company.
In rendering our opinion, we have relied upon and assumed the accuracy and
completeness of all of the financial and other information that was available to
us from public sources, that was provided to us by the Company and Comcast or
their respective representatives, or that was otherwise reviewed by us. With
respect to the financial projections provided to us, we have relied on
representations that they have been prepared on the basis reflecting the best
currently available estimates and judgments of the management of the Company and
Comcast as to the future operating and financial performance of the Company and
Comcast, respectively. We have not assumed any responsibility for making an
independent evaluation of any assets or liabilities or for making any
independent verification of any of the information reviewed by us. We have
relied as to certain legal matters on advice of counsel to the Special Committee
of the Board of Directors of the Company.
Our opinion is necessarily based on economic, market, financial and other
conditions as they exist on, and on the information made available to us as of,
the date of this letter. It should be understood
<PAGE>
Jones Intercable, Inc.
Page 2 December 21, 1999
that, although subsequent developments may affect this opinion, we do not have
any obligation to update, revise or reaffirm this opinion. We are expressing no
opinion as to the prices at which the Comcast Class A Special Common Stock will
actually trade at any time. Our opinion does not address the relative merits of
the Merger and the other business strategies being considered by the Company's
Board of Directors, nor does it address the Board's decision to proceed with the
Merger. Our opinion does not constitute a recommendation to any stockholder as
to how such stockholder should vote on the proposed transaction.
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as part of its
investment banking services, is regularly engaged in the valuation of businesses
and securities in connection with mergers, acquisitions, underwritings, sales
and distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. DLJ has performed investment
banking and other services for the Company and Comcast in the past and has been
compensated for such services.
Based upon the foregoing and such other factors as we deem relevant, we are
of the opinion that the consideration to be received by the stockholders of the
Company other than Comcast pursuant to the Agreement is fair to such
stockholders from a financial point of view.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE SECURITIES
CORPORATION
By: /s/ JAMES M. BRONER
----------------------------------------
James M. Broner
Senior Vice President
B-2
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subchapter D (Sections 1741 through 1750) of Chapter 17 of the Pennsylvania
Business Corporation Law of 1988 (the "PBCL" or "Pennsylvania Law") contains
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers, employees and agents (collectively, "Representatives"), and
related matters, which is summarized below.
Under Section 1741, subject to certain limitations, a corporation has the
power to indemnify directors, officers and other Representatives under certain
prescribed circumstances against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with a threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative, to which any of them
is a party or threatened to be made a party by reason of his being a
Representative of the corporation or serving at the request of the corporation
as a Representative of another corporation, partnership, joint venture, trust or
other enterprise, if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation and,
with respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 1742 provides for indemnification with respect to derivative actions
similar to that provided by Section 1741. However, indemnification is not
provided under Section 1742 in respect of any claim, issue or matter as to which
a Representative has been adjudged to be liable to the corporation unless and
only to the extent that the proper court determines upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, the Representative is fairly and reasonably entitled to indemnity for
the expenses that the court deems proper.
Section 1743 provides that indemnification against expenses is mandatory to
the extent that a Representative has been successful on the merits or otherwise
in defense of any such action or proceeding referred to in Section 1741 or 1742.
Section 1744 provides that unless ordered by a court, any indemnification
under Section 1741 or 1742 shall be made by the corporation as authorized in the
specific case upon a determination that indemnification of a Representative is
proper because the Representative met the applicable standard of conduct, and
such determination will be made by (i) the board of directors by a majority vote
of a quorum of directors not parties to the action or proceeding; (ii) if a
quorum is not obtainable or if obtainable and a majority of disinterested
directors so directs, by independent legal counsel in a written opinion; or
(iii) by the shareholders.
Section 1745 provides that expenses incurred by a Representative in
defending any action or proceeding referred to in Subchapter D of Chapter 17 of
the PBCL may be paid by the corporation in advance of the final disposition of
such action or proceeding upon receipt of an undertaking by or on behalf of the
Representative to repay such amount if it shall ultimately be determined that he
is not entitled to be indemnified by the corporation.
Section 1746 provides generally that except in any case where the act or
failure to act giving rise to the claim for indemnification is determined by a
court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by Subchapter D of
Chapter 17 of the PBCL shall not be deemed exclusive of any other rights to
which a Representative seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding that office.
Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any Representative against any liability incurred by him
in his capacity as a Representative, whether or not
II-1
<PAGE>
the corporation would have the power to indemnify him against that liability
under Subchapter D of Chapter 17 of the PBCL.
Sections 1748 and 1749 apply the indemnification and advancement of expenses
provisions contained in Subchapter D of Chapter 17 of the PBCL to successor
corporations resulting from consolidation, merger or division and to service as
a Representative of a corporation or an employee benefit plan.
Section 7-2 of Comcast's Bylaws provides that it will indemnify any of its
directors or officers to the fullest extent permitted by the Pennsylvania Law
against all expense, liability and loss reasonably incurred or suffered by such
person in connection with any threatened, pending or completed action, suit or
proceeding (a "Proceeding") involving such person by reason of the fact that he
or she is or was a director or officer of Comcast or is or was serving at the
request or for the benefit of Comcast in any capacity for another corporation or
other enterprise. No indemnification pursuant to Section 7-2 may be made,
however, in any case where the act or failure to act giving rise to the claim
for indemnification is determined by a court to have constituted willful
misconduct or recklessness.
Section 7-2 further provides that the right to indemnification includes the
right to have the expenses incurred by the indemnified person in defending any
Proceeding paid by Comcast in advance of the final disposition of the Proceeding
to the fullest extent permitted by Pennsylvania Law. In addition, Section 7-2
provides that registrant may purchase and maintain insurance for the benefit of
any person on behalf of whom insurance is permitted to be purchased by
Pennsylvania Law against any expense, liability or loss whether or not Comcast
would have the power to indemnify such person under Pennsylvania or other law.
Comcast may also purchase and maintain insurance to insure its indemnification
obligations, whether arising under its Bylaws or otherwise. In addition,
Section 7-2 states that Comcast may create a fund of any nature or otherwise may
secure in any manner its indemnification obligations, whether arising under the
Bylaws or otherwise.
Section 7-3 of Comcast's Bylaws states that the provisions of Comcast's
Bylaws relating to indemnification constitute a contract between Comcast and
each of its directors and officers which may be modified as to any director or
officer only with that person's consent or as provided in Section 7-3. Further,
any repeal or amendment of the indemnification provisions of Comcast's Bylaws
adverse to any director or officer will apply only on a prospective basis. In
addition, no repeal or amendment of the Bylaws may affect the indemnification
provisions of the Bylaws so as to limit indemnification or the advancement of
expenses in any manner unless adopted by (a) the unanimous vote of Comcast's
directors then serving or (b) the affirmative vote of shareholders entitled to
cast at least 80% of the votes that all shareholders are entitled to cast in the
election of directors, provided that no such amendment will have a retroactive
effect inconsistent with the preceding sentence.
Comcast's directors and officers are insured against certain liabilities
under its directors' and officers' liability insurance as permitted by the PBCL.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibits required to be filed by Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- ------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger among Jones Intercable, Inc.,
Comcast Corporation and Comcast JOIN Holdings, Inc., dated
as of December 22, 1999 (attached as Appendix A to the proxy
statement/prospectus).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- ------------------------------------------------------------
<C> <S>
4 Specimen Class A Special Common Stock Certificate
(incorporated by reference to Exhibit 4(2) to Comcast's
Annual Report on Form 10-K for the year ended December 31,
1986).
5 Opinion and consent of Arthur R. Block, Esquire, Senior
Deputy General Counsel of Comcast.
8.1 Opinion and consent of Dechert Price & Rhoads as to certain
U.S. federal income tax matters.
15 Letter re: Unaudited Interim Financial Information from
Arthur Andersen LLP.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of KPMG LLP.
23.4 Consent of Arthur R. Block, Esquire, Senior Deputy General
Counsel (included in Exhibit 5).
23.5 Consent of Donaldson, Lufkin & Jenrette Securities
Corporation.
23.6 Consent of Dechert Price & Rhoads (included in Exhibit 8.1)
24.1* Power of Attorney.
99.1 Form of proxy card for the special meeting of shareholders
of Jones Intercable.
99.2 Form of notice of special meeting of shareholders of Jones
Intercable.
99.3 Opinion of Donaldson, Lufkin & Jenrette Securities
Corporation (attached as Appendix B to the proxy
statement/prospectus).
</TABLE>
- ------------------------
* Previously filed.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-3
<PAGE>
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes, that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows:
(1) that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items
of the applicable form.
(2) that every prospectus (i) that is filed pursuant to the immediately
preceding paragraph, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(e) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(f) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amendment No. 2 to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized in
Philadelphia, Pennsylvania, on January 25, 2000.
<TABLE>
<S> <C> <C>
COMCAST CORPORATION
By: /s/ JOHN R. ALCHIN
-----------------------------------------
John R. Alchin,
SENIOR VICE PRESIDENT AND TREASURER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board of
------------------------------------------- Directors; Director
Ralph J. Roberts
* Vice Chairman of the Board of
------------------------------------------- Directors; Director
Julian A. Brodsky
* President; Director
------------------------------------------- (Principal Executive
Brian L. Roberts Officer)
* Executive Vice President
------------------------------------------- (Principal Accounting
Lawrence S. Smith Officer)
/s/ JOHN R. ALCHIN Senior Vice President and
------------------------------------------- Treasurer (Principal January 25, 2000
John R. Alchin Financial Officer)
* Director
-------------------------------------------
Gustave G. Amsterdam
* Director
-------------------------------------------
Sheldon M. Bonovitz
* Director
-------------------------------------------
Joseph L. Castle II
* Director
-------------------------------------------
Bernard C. Watson
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director
-------------------------------------------
Irving A. Wechsler
* Director
-------------------------------------------
Anne Wexler
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ JOHN R. ALCHIN
---------------------
John R. Alchin January 25, 2000
Attorney-in-fact
</TABLE>
II-6
<PAGE>
Exhibit 5
[COMCAST LETTERHEAD]
January 25, 2000
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102-2148
Ladies and Gentlemen:
I am Senior Deputy General Counsel and Vice President of Comcast
Corporation, a Pennsylvania corporation (the "Company"). I have acted as counsel
to the Company in connection with the Company's Registration Statement on Form
S-4, as amended (the "Registration Statement"), and the proxy statement
prospectus contained in the Registration Statement (the "Prospectus") filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Act"), covering the registration under the Act of 58,900,333
shares of the Class A Special Common Stock to be issued by the Company (the
"Shares") pursuant to the Agreement and Plan of Merger among Jones Intercable,
Inc., the Company and Comcast JOIN Holdings, Inc., a wholly owned subsidiary of
the Company, dated as of December 22, 1999 (the "Merger Agreement").
I have examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as I have deemed
necessary for the purposes of rendering this opinion.
On the basis of the foregoing, I am of the opinion that the Shares
have been duly authorized and, assuming the due execution and delivery of
certificates representing the Shares, when issued and delivered as contemplated
by the Merger Agreement, will be validly issued, fully paid and non-assessable.
I am a member of the Bar of the Commonwealth of Pennsylvania and
the foregoing opinion is limited to the laws of the Commonwealth of Pennsylvania
and the federal laws of the United States of America.
I hereby consent to the filing of this opinion as an exhibit to
the Registration Statement. In addition, I consent to the reference to me under
the caption "Legal Matters" in the Prospectus contained in the Registration
Statement.
Very truly yours,
/s/ Arthur R. Block
--------------------------------
Arthur R. Block
Vice President and Senior Deputy
General Counsel
<PAGE>
Exhibit 8.1
[LETTERHEAD]
January 25, 2000
Board of Directors
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Re: Merger of Jones Intercable, Inc. with and into
Comcast Join Holdings, Inc.
Ladies and Gentlemen:
This opinion is being delivered to you in connection with the
filing of the Proxy Statement/Prospectus for the merger (the "Merger") of Jones
Intercable, Inc. (the "Company"), a Colorado corporation, with and into Comcast
JOIN Holdings, Inc. ("Merger Sub"), a Delaware corporation and wholly owned
subsidiary of Comcast Corporation ("Parent"), a Pennsylvania corporation. The
Proxy Statement/Prospectus is included in the Registration Statement on Form S-4
of Parent, as amended, filed with the Securities and Exchange Commission on
January 10, 2000 and as amended thereafter (the "Registration Statement"). The
terms and conditions of the Merger are set forth in that Agreement and Plan of
Merger (the "Reorganization Agreement") dated as of December 22, 1999, by and
among Parent, Merger Sub and the Company.
Except as otherwise provided, capitalized terms used but not
defined herein shall have the meanings set forth in the Reorganization
Agreement. All section references, unless otherwise indicated, are to the
Internal Revenue Code of 1986, as amended (the "Code").
We have acted as counsel to the Parent and Merger Sub in
connection with the Merger. As such, and for the purpose of rendering this
opinion, we have examined, and are relying upon (without any independent
investigation or review thereof) the truth and accuracy, at
<PAGE>
Board of Directors
Comcast Corporation
Page 2
all relevant times, of the statements, covenants, representations and warranties
contained in the following documents (including all exhibits and schedules
attached thereto):
(a) the Reorganization Agreement;
(b) those certain tax representation letters dated on or
about the date hereof delivered to us by Parent, Merger Sub and the Company
containing certain representations of Parent, Merger Sub and the Company (the
"Tax Representation Letters"); and
(c) such other instruments and documents related to the
formation, organization and operation of Parent, Merger Sub and the Company and
related to the consummation of the Merger and the other transactions
contemplated by the Reorganization Agreement as we have deemed necessary or
appropriate.
In connection with rendering this opinion, we have assumed
(without any independent investigation or review thereof) that:
1. Original documents submitted to us (including signatures
thereto) are authentic, documents submitted to us as copies conform to the
original documents, and that all such documents have been (or will be by the
Effective Time) duly and validly executed and delivered where due execution and
delivery are a prerequisite to the effectiveness thereof;
2. All representations, warranties and statements made or
agreed to by Parent, Merger Sub and the Company, their managements, employees,
officers, directors and stockholders in connection with the Merger, including,
but not limited to, those set forth in the Reorganization Agreement (including
the exhibits thereto) and the Tax Representation Letters are true and accurate
at all relevant times;
3. All covenants contained in the Reorganization Agreement
(including exhibits thereto) and the Tax Representation Letters have been or
will be performed without waiver or breach of any material provision thereof;
and
4. Any representation or statement made "to the best of
knowledge" or similarly qualified is correct without such qualification.
Based on our examination of the foregoing items and subject to the
limitations, qualifications, assumptions and caveats set forth herein, we are of
the opinion that, provided the Merger is consummated in accordance with the
terms and conditions of the Reorganization Agreement and as set forth in the
Registration Statement, for federal income tax purposes:
(i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code;
(ii) Parent, Merger Sub and the Company will each be a party
to the reorganization within the meaning of Section 368(b) of the Code;
<PAGE>
Board of Directors
Comcast Corporation
Page 3
(iii) Parent, the Company and Merger Sub will not recognize
any gain or loss as a result of the Merger;
(iv) No gain or loss will be recognized by holders of Company
Shares who exchange their Company Shares for Parent Class A Special Common
Stock, except with respect to any cash received by Company stockholders in lieu
of fractional shares of Parent Class A Special Common Stock;
(v) Each holder's aggregate tax basis in Parent Class A
Special Common Stock received in the Merger will equal his or her aggregate tax
basis in the Company Shares exchanged therefor, reduced by the amount of cash
received and increased by the amount of gain recognized in the Merger;
(vi) Provided that the Company Shares are held as a capital
asset at the Effective Time, the holding period of Parent Class A Special Common
Stock received in the Merger in exchange therefor will include the holding
period of such Company Shares; and
(vii) A holder of Company Shares who receives cash in lieu of
a fractional share of Parent Class A Special Common Stock will recognize gain or
loss equal to the difference, if any, between the amount of cash received and
the holder's tax basis in the fractional share interest.
We consent to the reference to our firm under the caption
"Material U.S. Federal Income Tax Consequences of the Merger" in the Proxy
Statement/Prospectus included in the Registration Statement and to the filing of
this opinion as an exhibit to the Registration Statement. In giving this
consent, we do not hereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
This opinion does not address the various state, local or foreign
tax consequences that may result from the Merger or the other transactions
contemplated by the Reorganization Agreement. In addition, no opinion is
expressed as to any federal income tax consequence of the Merger or the other
transactions contemplated by the Reorganization Agreement except as specifically
set forth herein, and this opinion may not be relied upon except with respect to
the consequences specifically discussed herein.
No opinion is expressed as to any transaction other than the
Merger as described in the Reorganization Agreement, or as to any other
transaction whatsoever, including the Merger, if all of the transactions
described in the Reorganization Agreement are not consummated in accordance with
the terms of the Reorganization Agreement and without waiver of any material
provision thereof. To the extent that any of the representations, warranties,
statements and assumptions material to our opinion and upon which we have relied
are not accurate and complete in all material respects at all relevant times,
our opinion could be
<PAGE>
Board of Directors
Comcast Corporation
Page 4
adversely affected and should not be relied upon. This opinion may not apply to
holders of Company Shares who have received their Shares as compensation for
services rendered (for example, if the Shares are substantially non-vested
within the meaning of Section 83 of the Code or were acquired upon the exercise
of incentive stock options under Section 422 of the Code).
This opinion only represents our best judgment as to the federal
income tax consequences of the Merger and is not binding on the Internal Revenue
Service or any court of law, tribunal, administrative agency or other
governmental body. The conclusions are based on the Code, existing judicial
decisions, administrative regulations and published rulings, all of which are
subject to change, possibly with retroactive effect. No assurance can be given
that future legislative, judicial or administrative changes or interpretations
would not adversely affect the accuracy of the conclusions stated herein.
Nevertheless, by rendering this opinion, we undertake no responsibility to
advise you of any new developments in the application or interpretation of the
federal income tax laws.
This opinion is being delivered solely in connection with the
filing of the Proxy Statement/Prospectus contained in the Registration
Statement. It is intended for your benefit, and it may not be relied upon or
utilized for any other purpose or by any other person and may not be made
available to any other person without our prior written consent.
Very truly yours,
/s/ Dechert Price & Rhoads
<PAGE>
EXHIBIT 15
LETTER RE: UNAUDITED FINANCIAL INFORMATION
We are aware that Comcast Corporation has incorporated by reference in this
registration statement the Jones Intercable, Inc. Form 10-Q's for the
quarters ended March 31, June 30, and September 30, 1999, which include our
reports covering the unaudited interim financial statements contained
therein. Pursuant to Regulation C of the Securities Act of 1933, those
reports are not considered a part of this registration statement or reports
prepared or certified by our firm within the meaning of Section 7 and 11 of
the Securities Act of 1933.
/s/ Arthur Andersen LLP
Denver, Colorado,
January 25, 2000
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 2 to
Registration Statement No. 333-85745 of Comcast Corporation and its
subsidiaries on Form S-4 of our reports dated February 22, 1999, appearing in
the Annual Report on Form 10-K of Comcast Corporation and its subsidiaries
for the year ended December 31, 1998 and to the reference to us under the
heading "Experts" in the Proxy Statement/Prospectus, which is part of this
Registration Statement.
/s/ Deloitte & Touche LLP
January 25, 2000
Philadelphia, Pennsylvania
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Comcast Corporation registration statement of our report
dated February 17, 1999 included in the Jones Intercable, Inc. Form 10-K for
the year ended December 31, 1998, and to all references to our firm included
in this registration statement.
/s/ Arthur Andersen LLP
Denver, Colorado,
January 25, 2000
<PAGE>
Exhibit 23.3
Consent of Independent Auditors
The Board of Directors
QVC, Inc.
We consent to the incorporation by reference in the registration statement on
Form S-4 of Comcast Corporation of our report dated February 3, 1999, with
respect to the consolidated balance sheets of QVC, Inc. and subsidiaries as
of December 31, 1998 and 1997, and the related consolidated statements of
operations and comprehensive income, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1998 (such
consolidated financial statements are not separately presented herein), which
report is included as an exhibit to the Form 10-K of Comcast Corporation for
the year ended December 31, 1998. We also consent to the reference to us
under the heading "Experts" in the Proxy Statement/Prospectus.
/s/ KPMG LLP
Philadelphia, Pennsylvania
January 25, 2000
<PAGE>
EXHIBIT 23.5
January 25, 2000
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Dear Sirs and Mesdames:
We hereby consent to the inclusion in the Registration Statement on Form S-4,
as amended, relating to the proposed merger of Jones Intercable, Inc. and
Comcast JOIN Holdings, Inc., a wholly owned subsidiary of Comcast, of our
opinion letter appearing as Appendix B to the Proxy Statement / Prospectus
which is a part of the Registration Statement, and to the references to our
firm name therein. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended (the "Securities Act"), or the
rules and regulations adopted by the Securities and Exchange Commission (the
"Commission") thereunder, nor do we admit that we are experts with respect to
any part of such Registration Statement within the meaning of the term
"experts" as used in the Securities Act or the rules and regulations of the
Commission thereunder.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Louis P. Friedman
------------------------------------
Managing Director
<PAGE>
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JONES INTERCABLE, INC.
c/o Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
The undersigned hereby appoints Ralph J. Roberts and Stanley Wang, and each
of them, as proxies, with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as designated on the reverse side
all the shares of Common Stock of Jones Intercable, Inc. held of record by
the undersigned on January 24, 2000 at the Special Meeting of Shareholders to
be held at the corporate offices of the Company, 1500 Market Street,
Philadelphia, Pennsylvania, at 10:00 a.m., Eastern Time, on March 2, 2000,
and at any adjournment thereof. IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL
VOTE FOR APPROVAL OF THE MERGER OF JONES INTERCABLE, INC. WITH AND INTO
COMCAST JOIN HOLDINGS, INC., A WHOLLY OWNED SUBSIDIARY OF COMCAST
CORPORATION, AND THE AGREEMENT AND PLAN OF MERGER, DATED AS OF DECEMBER 22,
1999, AMONG JONES INTERCABLE, INC., COMCAST CORPORATION, AND COMCAST JOIN
HOLDINGS, INC. IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATION, AND AT THEIR
DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE SPECIAL
MEETING.
(continued on other side)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Please mark
your vote as
indicated in
this example [X]
The Board of Directors Recommends a Vote FOR in Item 1.
To vote your shares for approval of the merger of Jones Intercable, Inc.
with and into Comcast JOIN Holdings, Inc., a wholly owned subsidiary of
Comcast Corporation, and the Agreement and Plan of Merger, dated as of
December 22, 1999, by and among, Jones Intercable, Inc., Comcast Corporation
and Comcast JOIN Holdings, Inc., mark the "FOR" box on item "1." To vote
against approval of the merger and the Agreement and Plan of Merger, mark
the "AGAINST" box. To abstain from voting for approval of the merger and the
Agreement and Plan of Merger, mark the "ABSTAIN" box.
1. Approval of the merger and the Agreement and Plan of Merger.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT
LEFT / /
MARK HERE IF YOU PLAN TO ATTEND THE
SPECIAL MEETING / /
Signature(s)____________________________ Date____________________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JONES INTERCABLE, INC.
c/o Comcast Corporation
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
The undersigned hereby appoints Ralph J. Roberts and Stanley Wang, and each
of them, as proxies, with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as designated on the reverse side
all the shares of Class A Common Stock of Jones Intercable, Inc. held of
record by the undersigned on January 24, 2000 at the Special Meeting of
Shareholders to be held at the corporate offices of the Company, 1500 Market
Street, Philadelphia, Pennsylvania, at 10:00 a.m., Eastern Time, March 2,
2000 and at any adjournment thereof. IF NO DIRECTIONS ARE GIVEN, THE PROXIES
WILL VOTE FOR APPROVAL OF THE MERGER OF JONES INTERCABLE, INC. WITH AND INTO
COMCAST JOIN HOLDINGS, INC., A WHOLLY OWNED SUBSIDIARY OF COMCAST
CORPORATION, AND THE AGREEMENT AND PLAN OF MERGER, DATED AS OF DECEMBER 22,
1999, AMONG JONES INTERCABLE, INC., COMCAST CORPORATION AND COMCAST JOIN
HOLDINGS, INC. IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATION, AND AT THEIR
DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE SPECIAL
MEETING.
(continued on other side)
This proxy/voting instruction card also constitutes your voting instructions
to the trustee under the Comcast Corporation Retirement-Investment Plan to
vote shares credited to your account in the plan. If you do not return your
card, your shares will not be voted. The trustee shall in all events exercise
voting obligations consistent with their fiduciary duties under the
Employment Retirement Income Security Act of 1974, as amended.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Please mark [X]
your vote as
indicated in
this example
The Board of Directors Recommends a Vote FOR in Item 1.
To vote your shares for approval of the merger of Jones Intercable, Inc. with
and into Comcast JOIN Holdings, Inc., a wholly owned subsidiary of Comcast
Corporation, and the Agreement and Plan of Merger, dated as of December 22,
1999, by and among, Jones Intercable, Inc., Comcast Corporation and Comcast
JOIN Holdings, Inc., mark the "FOR" box on item "1." To vote against approval
of the merger and the Agreement and Plan of Merger, mark the "AGAINST" box. To
abstain from voting for approval of the merger and the Agreement and Plan of
Merger, mark the "ABSTAIN" box.
1. Approval of the merger and the Agreement and Plan of Merger.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT
LEFT / /
MARK HERE IF YOU PLAN TO ATTEND THE
SPECIAL MEETING / /
Signature(s)____________________________ Date_________________________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Exhibit 99.2
JONES INTERCABLE, INC.
C/O COMCAST CORPORATION
1500 MARKET STREET
PHILADELPHIA, PENNSYLVANIA 19102-2148
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 2, 2000
To the Shareholders:
Notice is hereby given that a special meeting of shareholders of Jones
Intercable, Inc. will be held at 1500 Market Street, Philadelphia PA 19102 on
March 2, 2000, at 10:00 a.m., Eastern time, for the following purposes:
1. To consider and act upon a proposal to approve a merger and merger
agreement among Jones Intercable, Inc., Comcast Corporation and Comcast JOIN
Holdings, Inc. a wholly owned subsidiary of Comcast Corporation. If the
conditions to the merger are satisfied or waived, each outstanding share of
Jones Intercable Common Stock and Class A Common Stock will be converted into
the right to receive 1.4 shares of Comcast Class A Special Common Stock.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Information relating to the above matters is set forth in the accompanying
proxy statement/ prospectus. A copy of the merger agreement is set forth as
Appendix A to the proxy statement/ prospectus and is incorporated herein by
reference.
The close of business on January 24, 2000 has been fixed as the record date
for determination of the shareholders entitled to notice of and to vote at the
meeting or any adjournment thereof. Approval of the merger agreement requires
the affirmative vote of:
- the holders of two-thirds of the outstanding shares of Common Stock
voting as a single class,
- the holders of two-thirds of the outstanding shares of Class A Common
Stock voting as a single class, and
- the holders of a majority of the shares of Jones Intercable Common
Stock and Class A Common Stock that are not beneficially owned by
Comcast or its affiliates voting together as a single class with each
share of Common Stock and Class A Common Stock being entitled to one
vote for the purposes of this approval.
Comcast intends to vote its shares of Jones Intercable Common Stock and
Class A Common Stock for approval of the merger and the merger agreement.
Shareholders may vote in person or by proxy. The proxy statement, which
explains in detail the merger, and the accompanying proxy card are attached to
this notice. Only holders of record of Jones Intercable shares at the close of
business on January 24, 2000 will be entitled to vote at the meeting or any
adjournment thereof with respect to all matters described above. Please sign,
date and mail the enclosed proxy promptly using the enclosed postage-paid
envelope. This action will not limit your right to vote in person if you wish to
attend the special meeting.
A special committee of the independent members of your Board of Directors
has unanimously approved and adopted the merger and the merger agreement. After
receiving the recommendation of the special committee, your Board of Directors
unanimously approved and adopted the merger and the merger agreement. The
special committee and your Board of Directors each recommends that you vote in
favor of the proposal.
<PAGE>
THE MERGER IS AN IMPORTANT DECISION FOR JONES INTERCABLE AND ITS
SHAREHOLDERS. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, WE URGE YOU
TO COMPLETE, SIGN AND PROMPTLY RETURN THE ENCLOSED PROXY CARD TO ENSURE THAT
YOUR SHARES WILL BE VOTED AT THE MEETING.
PLEASE DO NOT SEND ANY CERTIFICATES FOR JONES INTERCABLE SHARES AT THIS
TIME.
By Order of the Board of
Directors,
Stanley L. Wang
Secretary
January 25, 2000
Should you have any questions regarding the special meeting or the attached
proxy statement/ prospectus, please contact our proxy solicitor, D.F. King &
Co., at 77 Water Street, New York, NY 10005. D.F. King's telephone number for
banks and brokers is (212) 269-5550 (call collect) and for all others is
(800) 207-3156.
2
