<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COMCAST CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
[LOGO OF COMCAST]
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 22, 2000
----------------
The Annual Meeting of Shareholders of Comcast Corporation (the "Company")
will be held on Thursday, June 22, 2000 at 9:00 a.m. local time at the offices
of the Company, 1500 Market Street, West Tower, 9th Floor, Philadelphia,
Pennsylvania, for the following purposes:
1. To elect nine directors to serve for the ensuing year and until their
respective successors shall have been duly elected and qualified.
2. To consider a proposal to approve an amendment to the Comcast
Corporation 1996 Stock Option Plan.
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the 2000 fiscal year.
4. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The close of business on May 3, 2000 has been fixed as the record date for
the meeting. All shareholders of record at that time are entitled to notice
of, and all holders of Class A Common Stock and Class B Common Stock are
entitled to vote at, the meeting and any adjournment or postponement thereof.
Because holders of Class A Special Common Stock are not generally entitled
to vote and no resolution is proposed for the meeting for which a vote of the
Class A Special Common Stock is required by law, holders of Class A Special
Common Stock are not entitled to vote at the meeting. The enclosed proxy
statement is being sent to holders of Class A Special Common Stock for
informational purposes only.
In the event that the meeting is adjourned for one or more periods
aggregating at least fifteen days due to the absence of a quorum, those
shareholders entitled to vote who attend the adjourned meeting, although
otherwise less than a quorum, shall constitute a quorum for the purpose of
acting upon any matter set forth in this notice.
All shareholders are cordially invited to attend the meeting. The Board of
Directors urges you to date, sign and return promptly the enclosed proxy with
respect to your shares of Class A Common Stock. The proxies are solicited by
the Board of Directors of the Company. The return of the proxy will not affect
your right to vote in person if you do attend the meeting. Copies of the
Company's Annual Report on Form 10-K and Summary Annual Report are enclosed.
STANLEY WANG
Secretary
May 16, 2000
<PAGE>
[LOGO OF COMCAST]
1500 Market Street
Philadelphia, Pennsylvania 19102-2148
----------------
PROXY STATEMENT
----------------
The enclosed proxy is solicited by the Board of Directors of Comcast
Corporation (the "Company"), a Pennsylvania corporation, for use at the Annual
Meeting of Shareholders (the "meeting") to be held on Thursday, June 22, 2000
at 9:00 a.m. local time at the offices of the Company, 1500 Market Street,
West Tower, 9th Floor, Philadelphia, Pennsylvania, and any adjournment or
postponement thereof. This Proxy Statement, the foregoing notice and the
enclosed proxy are being mailed to shareholders on or about May 16, 2000.
The Board of Directors does not intend to bring any matters before the
meeting other than the matters specifically referred to in the notice of the
meeting, nor does the Board of Directors know of any matter which anyone else
proposes to present for action at the meeting. However, if any other matters
properly come before the meeting, the persons named in the accompanying proxy
or their duly constituted substitutes acting at the meeting will be deemed
authorized to vote or otherwise act thereon in accordance with their judgment
on such matters.
When your proxy card is returned properly signed, the shares represented
will be voted in accordance with your directions. In the absence of
instructions, the shares represented at the meeting by the enclosed proxy will
be voted "FOR" each of the nominees for the Board of Directors in the election
of directors and "FOR" each of the other proposals submitted to shareholders
in accordance with the foregoing notice of meeting and as set forth in this
Proxy Statement. Any proxy may be revoked at any time prior to its exercise by
notifying the Secretary in writing, by delivering a duly executed proxy
bearing a later date or by attending the meeting and voting in person.
Voting Electronically
Instead of submitting your vote by mail on the enclosed proxy card, the
Company's by-laws permit you to vote electronically via the Internet. Please
note that there are separate Internet voting arrangements depending on whether
shares registered in the Company's stock records are in your name or in the
name of a brokerage firm or bank.
The Internet voting procedures are designed to authenticate shareholders'
identities, to allow shareholders to vote their shares and to confirm that
their instructions have been properly recorded. Shareholders voting via the
Internet should understand that there may be costs associated with electronic
access, such as usage charges from Internet access providers and telephone
companies, that will be borne by the shareholder.
For Shares Registered Directly in the Name of the Shareholder
Shareholders with shares registered directly in their name in the Company's
stock records maintained by its transfer agent, EquiServe Trust Company, N.A.
("EquiServe"), may vote their shares (1) via the Internet at the following
address on the World Wide Web: http://www.eproxyvote.com/cmcsa, (2) by mailing
their signed proxy card, or (3) by attending the meeting and voting in person.
Specific instructions to be followed by registered shareholders are set forth
on the enclosed proxy card. Votes submitted via the Internet through EquiServe
as described herein must be received by 5:00 p.m. eastern time on June 21,
2000.
1
<PAGE>
For Shares Registered in the Name of a Brokerage Firm or Bank
A number of brokerage firms and banks are participating in separate programs
that offer Internet voting options. Such programs are different from the
program provided by EquiServe for shares registered directly in the name of
the shareholder. If your shares are held in an account at a brokerage firm or
bank participating in any such program, you may vote those shares via the
Internet in accordance with instructions set forth on the voting form provided
to you by the brokerage firm or bank that holds your shares.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Outstanding Shares and Voting Rights
At the close of business on May 3, 2000, the record date, the Company had
outstanding [24,939,080] shares of Class A Common Stock, par value $1.00 per
share, [9,444,375] shares of Class B Common Stock, par value $1.00 per share,
and [840,221,601] shares of Class A Special Common Stock, par value $1.00 per
share. All share amounts in this Proxy Statement reflect the stock split in
the form of a dividend of one share of Class A Special Common Stock for each
share of Class A Common Stock, Class A Special Common Stock and Class B Common
Stock paid on May 5, 1999 to shareholders of record as of the close of
business on April 20, 1999.
On each matter voted upon at the meeting and any adjournment or postponement
thereof, the Class A Common Stock and Class B Common Stock will vote together.
Each record holder of Class A Common Stock will be entitled to one vote per
share and each record holder of Class B Common Stock will be entitled to
fifteen votes per share. Holders of Class A Special Common Stock shall not be
entitled to vote at the meeting. References to voting classes of the Company's
Common Stock herein shall not include the Class A Special Common Stock. In the
election of directors, Class A Common Stock and Class B Common Stock
shareholders shall not have cumulative voting rights.
The presence, in person or by proxy, of shareholders entitled to cast a
majority of the votes which shareholders are entitled to cast on each matter
to be voted upon at the meeting will constitute a quorum for the meeting. In
the event that the meeting is adjourned for one or more periods aggregating at
least fifteen days due to the absence of a quorum, those shareholders entitled
to vote who attend the adjourned meeting, although otherwise less than a
quorum as described in the preceding sentence, shall constitute a quorum for
the purpose of acting upon any matter set forth in the foregoing notice of the
meeting.
In the election of directors, the nine nominees receiving a plurality of the
votes cast at the meeting shall be elected. Approval of all other proposals to
be submitted to shareholders in accordance with the foregoing notice of the
meeting and as set forth in this Proxy Statement requires the affirmative vote
of a majority of the votes cast at the meeting. For purposes of determining
the number of votes cast with respect to any voting matter, only those cast
"FOR," "AGAINST" or, in the case of the election of directors, "WITHHELD," are
included. Abstentions and broker non-votes are counted only for purposes of
determining whether a quorum is present at the meeting.
The holder of all of the Class B Common Stock has indicated that it will
vote all of its shares "FOR" each of the nominees for director listed below
and "FOR" each of the other proposals submitted to shareholders in accordance
with the foregoing notice of the meeting and as set forth in this Proxy
Statement. Consequently, the election of each of the nominees for director
listed below and the approval of each of the other proposals submitted to
shareholders in accordance with the foregoing notice of meeting and as set
forth in this Proxy Statement are assured.
2
<PAGE>
Principal Shareholders
The following table sets forth certain information regarding the holdings of
each shareholder who was known to the Company to be the beneficial owner, as
defined in Rule 13d-3 of the Securities Exchange Act of 1934 (the "Exchange
Act"), of more than 5% of any voting class of the Company's Common Stock
(Class A and Class B) as of February 29, 2000. So far as is known to the
Company, the persons named in the table below as beneficially owning the
shares set forth therein have sole voting power and sole investment power with
respect to such shares, unless otherwise indicated.
<TABLE>
<CAPTION>
Amount Percent
Beneficially of
Title of Voting Class Name and Address of Beneficial Owner Owned Class
--------------------- ------------------------------------ ------------ -------
<S> <C> <C> <C>
Class A Common Stock Brian L. Roberts 138,269 0.6%(1)
1500 Market Street
Philadelphia, PA 19102-2148
Class B Common Stock Brian L. Roberts 9,444,375 100%(1)
1500 Market Street
Philadelphia, PA 19102-2148
</TABLE>
- --------
(1) As of February 29, 2000, Sural Corporation ("Sural"), a Delaware
corporation, was the sole owner of the Company's outstanding Class B
Common Stock and owned 136,913 shares of the Company's outstanding Class A
Common Stock. Mr. Brian L. Roberts, President of the Company, owns stock
representing substantially all of the voting power of all classes of
voting securities of Sural. Pursuant to Rule 13d-3 under the Exchange Act,
Mr. Brian L. Roberts is deemed to be the beneficial owner of the shares of
Class B Common Stock and Class A Common Stock owned by Sural, and he is
deemed to be the beneficial owner of 1,356 shares of Class A Common Stock
owned by his wife, as to which he disclaims beneficial ownership. Since
each share of Class B Common Stock is entitled to fifteen votes, the
shares of Class A Common Stock and Class B Common Stock owned by Sural and
Mr. Brian L. Roberts constituted as of February 29, 2000 approximately 85%
of the voting power of the two classes of the Company's voting Common
Stock combined. The Class B Common Stock is convertible on a share-for-
share basis into Class A Common Stock or Class A Special Common Stock. If
Sural and Mr. Brian L. Roberts were to convert the Class B Common Stock
that they are deemed to beneficially own into Class A Common Stock, Mr.
Roberts would beneficially own 9,582,644 shares of Class A Common Stock
(approximately 27.9% of the Class A Common Stock).
3
<PAGE>
Security Ownership of Management
The following table sets forth certain information regarding the Class A
Common Stock (one vote per share) and the Class A Special Common Stock
(generally non-voting) beneficially owned by each director of the Company, by
Mr. Ralph J. Roberts (the "Chief Executive Officer," see note (12) below), by
each of the Company's other four most highly compensated executive officers
during 1999 and by all directors and executive officers of the Company as a
group, as of February 29, 2000. Each of the persons named in the table below
as beneficially owning the shares set forth therein has sole voting power and
sole investment power with respect to such shares, unless otherwise indicated.
<TABLE>
<CAPTION>
Amount Percent
Beneficially Owned(1) of Class(1)
-------------------------------------- ---------------
Class A Class A
Name of Beneficial Owner Class A Special Class A Special
- ------------------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
John R. Alchin(3)....... -- 585,587(4) (2) (2)
Gustave G. Amsterdam.... 25,269 185,369 (2) (2)
Sheldon M. Bonovitz..... 16,523(5) 228,316(6) (2) (2)
Julian A. Brodsky(3).... 234,146(7) 3,267,338(8) (2) (2)
Joseph L. Castle, II.... 375 33,569 (2) (2)
Brian L. Roberts(3)(9).. 138,269(10) 10,486,597(11) (2) 1.2%
Ralph J. Roberts(12).... 872,866(13) 6,480,647(14) 3.5% (2)
Lawrence S. Smith(3).... -- 256,328(15) (2) (2)
Bernard C. Watson....... -- 54,000 (2) (2)
Irving A. Wechsler...... 110,607 618,711 (2) (2)
Anne Wexler............. -- 44,700 (2) (2)
All directors and
executive officers as a
group (12 persons)(3).. 1,438,946 22,630,857(4) 5.8% 2.7%
(5)(7)(10)(13) (6)(8)(11)(14)(15)(16)
</TABLE>
- --------
(1) With respect to each beneficial owner, the shares issuable upon exercise
of his or her currently exercisable options and options exercisable
within 60 days of February 29, 2000 are deemed to be outstanding for the
purpose of computing the percentage of the class of Common Stock owned.
Includes the following shares of Class A Special Common Stock for which
the named individuals, and all directors and executive officers as a
group, hold currently exercisable options or options exercisable within
60 days of February 29, 2000: Mr. Alchin, 389,150 shares; Mr. Amsterdam,
10,800 shares; Mr. Bonovitz, 43,200 shares; Mr. Brodsky, 2,089,301
shares; Mr. Castle, 28,200 shares; Mr. Brian L. Roberts, 781,096 shares;
Mr. Ralph J. Roberts, 4,417,497 shares; Mr. Smith, 138,230 shares; Mr.
Watson, 43,200 shares; Mr. Wechsler, 43,200 shares; Ms. Wexler, 43,200
shares; and all directors and executive officers as a group, 8,340,528
shares. Does not include the following shares which were issuable under
options exercised prior to February 29, 2000, but the receipt of which
was irrevocably deferred pursuant to the Company's 1997 Deferred Stock
Option Plan: Mr. Amsterdam, 39,006 shares; Mr. Bonovitz, 18,329 shares;
Mr. Brodsky, 789,326 shares; Mr. Ralph J. Roberts, 2,921,518 shares; and
Mr. Wechsler, 13,393 shares.
(2) Less than one percent of the applicable class.
(3) The following named executive officers also beneficially own shares of
the common stock of QVC, Inc., a 57%-owned subsidiary of the Company,
including shares issuable under options to purchase shares exercisable
within 60 days of February 29, 2000: Mr. Alchin, 2,040 shares;
Mr. Brodsky, 2,720 shares; Mr. Brian L. Roberts, 4,160 shares; Mr. Smith,
2,120 shares; and all directors and executive officers as a group, 11,040
shares. The number of shares of common stock of QVC, Inc. beneficially
owned by each of them, and by all directors and executive officers as a
group, represents less than one percent of the outstanding common stock
of QVC, Inc.
4
<PAGE>
(4) Includes 30 shares of Class A Special Common Stock owned in the Comcast
Corporation Retirement--Investment Plan, as to which shares he disclaims
beneficial ownership.
(5) Includes 4,443 shares of Class A Common Stock held in trust or as a
custodian for his children, 6,425 shares owned by his wife, and 2,636
shares held by him as trustee for a testamentary trust, as to all of
which shares he disclaims beneficial ownership.
(6) Includes 8,568 shares of Class A Special Common Stock held in trust or as
a custodian for his children, 6,513 shares owned by his wife, 152,528
shares held by him as trustee for a testamentary trust, and 10,476 shares
owned by a charitable foundation of which his wife is a trustee, as to
all of which shares he disclaims beneficial ownership.
(7) Includes 15,000 shares of Class A Common Stock owned by a charitable
foundation of which he and members of his family are directors and
officers, and 88,178 shares owned by Swallow Drive Fund, L.P., a limited
partnership the general partner of which is controlled by Mr. Brodsky and
his wife, as to all of which shares he disclaims beneficial ownership.
(8) Includes 289,562 shares of Class A Special Common Stock owned by Swallow
Drive Fund, L.P., as to which shares he disclaims beneficial ownership.
See note (7) above.
(9) Pursuant to Rule 13d-3 of the Exchange Act, Mr. Brian L. Roberts is also
deemed to be the beneficial owner of all of the outstanding shares of the
Company's Class B Common Stock owned by Sural. See note (1) to the table
under the caption "Principal Shareholders."
(10) Includes 1,356 shares of Class A Common Stock owned by his wife, as to
which shares he disclaims beneficial ownership, and 136,913 shares of
Class A Common Stock owned by Sural. See note (1) to the table under the
caption "Principal Shareholders."
(11) Includes 2,712 shares of Class A Special Common Stock owned by his wife,
40,206 shares owned in the Comcast Corporation Retirement--Investment
Plan, and 10,000 shares owned by a charitable foundation of which he and
his wife are directors and officers, as to all of which shares he
disclaims beneficial ownership. Also includes 9,581,288 shares owned by
Sural, but does not include additional shares of Class A Special Common
Stock issuable upon conversion of Class B Common Stock beneficially owned
by Mr. Brian L. Roberts. See note (1) to the table under the caption
"Principal Shareholders." If Sural and Mr. Brian L. Roberts were to
convert the Class B Common Stock that they are deemed to beneficially own
into Class A Special Common Stock, Mr. Roberts would beneficially own
19,930,972 shares of Class A Special Common Stock (approximately 2.3% of
the Class A Special Common Stock).
(12) The Company's by-laws do not provide for the position of "Chief Executive
Officer." For purposes of application of the proxy rules of the
Securities and Exchange Commission to this Proxy Statement, the Company
has determined that Mr. Ralph J. Roberts should be deemed to be the
Company's chief executive officer.
(13) Includes 570,813 shares of Class A Common Stock owned by a limited
partnership, the general partner of which is controlled by Mr. Ralph J.
Roberts.
(14) Includes 267,033 shares of Class A Special Common Stock owned by a
charitable foundation of which he and his wife are trustees, as to which
shares he disclaims beneficial ownership, and 570,813 shares owned by a
limited partnership, the general partner of which is controlled by
Mr. Ralph J. Roberts.
(15) Includes 58,000 shares of Class A Special Common Stock owned in a grantor
retained annuity trust, as to which shares he disclaims beneficial
ownership.
(16) Includes 30 shares of Class A Special Common Stock owned by an executive
officer, other than those named above, in the Comcast Corporation
Retirement--Investment Plan, as to which shares beneficial ownership is
disclaimed.
5
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's executive officers
and directors and persons who own more than ten percent of a registered class
of the Company's equity securities (collectively, the "reporting persons") to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with copies of these reports.
Based on the Company's review of the copies of these reports received by it,
and written representations received from reporting persons, the Company
believes that all filings required to be made by the reporting persons for the
period January 1, 1999 through December 31, 1999 were made on a timely basis,
except for: one report regarding a disposition of shares of stock by Mr.
Bonovitz, a director of the Company, in connection with the exercise of stock
options, for which a Form 4 was inadvertently filed late; one report regarding
a disposition of shares of stock by Mr. Wechsler, a director of the Company,
in connection with the exercise of stock options, for which a Form 4 was
inadvertently filed late; one report regarding a disposition of shares of
stock by Mr. Amsterdam, a director of the Company, in connection with the
exercise of stock options, for which a Form 4 was inadvertently filed late;
and two reports regarding dispositions of shares of stock by Mr. Smith,
Executive Vice President of the Company, one report in connection with the
exercise of stock options and one report in connection with a gift of common
stock, for each of which transactions a Form 4 was inadvertently filed late.
6
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the Company's last three fiscal years,
certain information concerning the annual and long-term compensation, as well
as other compensation paid to or for the Chief Executive Officer and each of
the Company's other four most highly compensated executive officers (the
"named executive officers"):
<TABLE>
<CAPTION>
Long-Term
Compensation All Other
Annual Compensation Awards Compensation
---------------------------------- ------------ (Principally
Number of Split-Dollar
Other Annual Securities Insurance
Bonus Compensation Underlying Benefits)
Name and Principal Position(1) Year Salary($) ($)(2) ($)(3) Options(#) ($)(4)
- ------------------------------ ---- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Roberts......... 1999 $1,050,000 $ 525,000 $2,279,829 250,000(6) $9,109,062
Chairman of the 1998 1,000,000 500,000 1,998,687(5) 1,134,610(6) 7,369,463
Board of Directors 1997 870,185 -- 1,387,050(5) 117,738(6) 5,625,776
Julian A. Brodsky........ 1999 $ 723,516 $ 361,758 $ 25,252 60,000(6) $ 918,136
Vice Chairman of 1998 689,063 344,532 23,409 605,000(6) 973,578
the Board of Directors 1,600(7)
1997 656,250 328,125 26,483 105,000(6) 1,067,761
Brian L. Roberts......... 1999 $1,000,000 $1,662,000 $ 360,643 4,000,000(6) $ 224,203
President 2,600(7)
1998 689,063 713,250 278,398 3,169,610(6) 222,026
7,800(7)
1997 656,250 687,000 42,883 160,160(6) 33,859
5,000(7)
Lawrence S. Smith........ 1999 $ 723,516 $ 431,440 $ 3,496 100,000(6) $ 32,261
Executive Vice President 1998 689,063 413,800 3,257 705,000(6) 30,361
2,200(7)
1997 656,250 397,000 10,452 105,000(6) 34,899
200(7)
John R. Alchin........... 1999 $ 608,753 $ 332,877 $ 31,799 75,000(6) $ 35,460
Executive Vice President 1998 579,813 318,407 48,411 587,500(6) 33,670
and Treasurer 1,200(7)
1997 552,250 304,625 17,984 87,500(6) 37,845
</TABLE>
- --------
(1) The Company's by-laws do not provide for the position of "Chief Executive
Officer." For purposes of application of the proxy rules of the Securities
and Exchange Commission to this Proxy Statement, the Company has
determined that Mr. Ralph J. Roberts should be deemed to be the Company's
chief executive officer.
(2) The amounts in this column include bonuses earned by the named persons
under the Company's 1996 Executive Cash Bonus Plan, bonuses paid to the
named persons (except Messrs. Ralph J. Roberts and Brodsky) in 1999, 1998
and 1997 relating to termination of the Company's discretionary bonus plan
(see "Report on Executive Compensation of the Compensation Committee's
Subcommittee on Performance-Based Compensation--Effect of Internal Revenue
Code Section 162(m)"), and guaranteed bonuses of $137,812 and $131,250,
paid to Mr. Brian L. Roberts in 1998 and 1997, respectively, and $5,788,
$5,512 and $5,250, paid to Mr. Smith in 1999, 1998 and 1997, respectively.
(3) This column includes Company payments to the named executive officers to
cover their tax liabilities incurred in connection with: (a) local taxes
on stock option grants or exercises;
7
<PAGE>
(b) Company payments to Messrs. Ralph J. Roberts, Brodsky and Brian L.
Roberts to cover the premiums attributable to the term life insurance
portion of split-dollar life insurance policies or separate term life
insurance policies (see note (4)(b) below); (c) Company payments to cover
premiums attributable to the executive long-term disability plan (see note
(4)(e) below); and (d) other incidental taxable fringe benefits provided to
the named executive officers. Such amounts are calculated based upon the
amount of tax payable by the executive officers in accordance with the
highest individual income tax bracket.
(4) The amounts shown in this column principally represent benefits associated
with split-dollar life insurance arrangements. In accordance with the
terms of the split-dollar life insurance arrangements, the Company will
recover all of the cumulative premiums paid by the Company for the whole-
life portion of such policies. This column includes (with respect to
amounts applicable to 1999): (a) the dollar value, on a term loan
approach, of the benefit of the whole-life portion of the premiums for
split-dollar life insurance policies paid by the Company projected on an
actuarial basis (Mr. Ralph J. Roberts $7,833,061; Mr. Brodsky $890,012;
Mr. Brian L. Roberts $22,830; Mr. Smith $22,278; and Mr. Alchin $21,332),
although the Company believes that a more realistic determination of the
economic value of the benefit would be based on an approach which
calculates the time value of money (using the applicable short-term
federal funds rate) of the premiums paid by the Company through 1999 (Mr.
Ralph J. Roberts $4,800,720; Mr. Brodsky $534,712; Mr. Brian L. Roberts
$16,711; Mr. Smith $20,697; and Mr. Alchin $20,541); (b) Company payments
to named executive officers to cover the premiums attributable to the term
life insurance portion of split-dollar life insurance policies or separate
term life insurance policies (Mr. Ralph J. Roberts $1,270,401; Mr. Brodsky
$18,009; Mr. Brian L. Roberts $190,689; Mr. Smith $1,745; and
Mr. Alchin $1,610); (c) Company contributions to its 401(k) Retirement--
Investment Plan in the amount of $5,600 for each of the named executive
officers; (d) Company payments to its long-term disability plan in the
amount of $980 for each of the named executive officers (other than
Mr. Ralph J. Roberts, who did not participate in such plan); and (e)
Company payments to the named executive officers (other than Mr. Ralph J.
Roberts, who did not participate in such plan) to cover the premiums
attributable to the executive long-term disability plan (Mr. Brodsky
$3,535; Mr. Brian L. Roberts $4,104; Mr. Smith $1,658; and Mr. Alchin
$5,938).
(5) Also includes $15,379 and $33,581 paid to him to cover the taxes payable
by him with respect to estate and succession planning services provided to
him by the Company in 1998 and 1997, respectively.
(6) Represents the number of shares of the Company's Class A Special Common
Stock issuable upon exercise of options.
(7) Represents the number of shares of the common stock of QVC, Inc., a 57%-
owned non-public subsidiary of the Company, issuable upon exercise of: (a)
options granted to the named executive officers by the Compensation
Committee of the QVC, Inc. Board of Directors on November 28, 1997, April
30, 1998 or July 7, 1999 pursuant to the 1995 QVC Stock Option and Stock
Appreciation Rights Plan (the "1995 QVC Plan") (except for options to
purchase 800 shares granted to Mr. Smith on July 7, 1998, and options to
purchase 4,600 shares granted to Mr. Brian L. Roberts on October 26,
1998); and (b) options granted April 18, 1996, assigned by the Company to
Mr. Brian L. Roberts on December 18, 1997. Such options were issued with
tandem stock appreciation rights exercisable in lieu of the options for
75% of the excess of the value of the QVC, Inc. common stock (as
determined pursuant to the 1995 QVC Plan) over the exercise price of such
options. Such options have an exercise price per share of $865.47 (for
options granted July 7, 1999), $651.84 (for options granted July 7 and
October 26, 1998), $688.14 (for options granted November 28, 1997 and
April 30, 1998), or $177.05 (for options granted April 18, 1996),
representing the value of the shares underlying such options on the date
of grant as determined pursuant to the 1995 QVC Plan, and such options
vest 20% on each of the first five anniversaries of the date of grant
(except for the options granted April 18, 1996, which vest 20%
8
<PAGE>
on grant and 20% on each January 1, 1997-2000), based on the named
executive's continued service to the Company. In all cases, vesting is
accelerated upon a change of control of QVC, Inc. The QVC, Inc. options
expire ten years after the date of grant. The estimated present value of
QVC, Inc. stock options at the date of grant which were granted in 1999 to
Mr. Brian L. Roberts is $956,332 and is calculated using the Black-Scholes
option pricing model, based upon the following assumptions used in
developing the grant valuation: an expected volatility of approximately
20.0%; an expected term to exercise of eight years; an interest rate of
approximately 6.1%; and no dividend yield. The actual value of the options,
if any, realized by Mr. Brian L. Roberts will depend on the extent to which
the market value of the common stock of QVC, Inc. exceeds the exercise
price of the option on the date the option is exercised. Consequently,
there is no assurance that the value realized by Mr. Brian L. Roberts will
be at or near the value estimated above. During 1999, such executive
officers exercised certain of such options to purchase shares of QVC, Inc.
common stock and realized value upon such exercises as follows: Mr.
Brodsky, 800 shares, $550,736; Mr. Brian L. Roberts, 4,160 shares,
$1,778,355; Mr. Smith, 800 shares, $451,792; and Mr. Alchin, 600 shares,
$413,052. At December 31, 1999, the excess of the fair market value of QVC,
Inc. common stock over the exercise price for options outstanding based
upon the most recent valuation date was as follows: Mr. Brodsky ($125,715
exercisable, $1,226,021 unexercisable); Mr. Brian L. Roberts ($0
exercisable, $5,495,678 unexercisable); Mr. Smith ($210,095 exercisable,
$1,484,969 unexercisable); and Mr. Alchin ($94,286 exercisable, $919,516
unexercisable).
9
<PAGE>
Stock Option Grants
The following table contains information concerning grants of stock options
under the Company's 1996 Stock Option Plan to the Chief Executive Officer and
to each of the Company's other four most highly compensated executive officers
during 1999. No Comcast Corporation stock appreciation rights ("SARs") were
granted during 1999 to the Chief Executive Officer or to any of the Company's
other four most highly compensated executive officers.
Stock Option Grants in 1999
<TABLE>
<CAPTION>
Individual Grants(1)
-------------------------------------------------------------------
% of
Total
Number of Options
Securities Granted
Underlying to Exercise
Options Employees Price Expiration Grant Date
Name Granted(#) in 1999 ($/Sh) Dates Present Value (2)
- ---- ---------- --------- --------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Ralph J. Roberts........ 2,790(3) * $36.1281 05/03/04 $ 34,289
247,210 3.4% 32.8437 05/03/09 4,264,373
Julian A. Brodsky....... 60,000 * $32.8437 05/03/09 1,035,000
Brian L. Roberts(4)..... 3,094(3) * $32.5875 01/05/04 $ 33,230
996,906 13.6% 29.6250 01/05/09 15,043,312
1,000,000 13.6 31.6875 04/05/09 16,610,000
1,000,000 13.6 32.8437 05/03/09 17,250,000
2,338(3) * 42.7625 10/04/04 34,228
997,662 13.6 38.8750 10/04/09 20,611,697
Lawrence S. Smith....... 100,000 1.4% $32.8437 05/03/09 1,725,000
John R. Alchin.......... 75,000 1.0% $32.8437 05/03/09 1,293,750
</TABLE>
- --------
* Less than one percent of total options granted to employees in 1999.
(1) All of the options are for the purchase of shares of Class A Special
Common Stock and were granted on either January 5, April 5, May 3, or
October 4, 1999 under the Company's 1996 Stock Option Plan. Except as
described in note (3) below, all options granted in 1999 have exercise
prices equal to their fair market value on the date of grant and generally
become exercisable at the rate of 40% of the shares covered thereby on the
second anniversary of the date of grant, and 20% each on the third, fourth
and fifth anniversaries of the date of grant, or, as to 50% of the excess
of the options granted on May 3, 1999 to each of Messrs. Brodsky, Smith
and Alchin over options to purchase 7,500 shares, at the rate of 20% of
the shares covered thereby on the second anniversary of the date of grant,
another 10% on each of the third through ninth anniversaries of the date
of grant, and 10% six months prior to the tenth anniversary of the date of
grant. The options that expire on January 5, 2004, May 3, 2004 and October
4, 2004, as well as 3,044 of the options granted to each of Messrs.
Brodsky, Smith and Alchin expiring May 3, 2009, are incentive stock
options. All other options granted are nonqualified stock options.
(2) These amounts represent the estimated present value of stock options at
the date of grant calculated using the Black-Scholes option pricing model,
based upon the following assumptions used in developing the grant
valuations: an expected volatility of approximately 35.9%; an expected
term to exercise of eight years, except for certain incentive stock
options granted to Messrs. Ralph J. Roberts and Brian L. Roberts, for
which the expected term to exercise is five years; an interest rate of
approximately 5.5%; and no dividend yield. The actual value of the
options, if any, realized by an executive officer will depend on the
extent to which the market value of the Class A Special Common Stock
exceeds the exercise price of the option on the date the option is
exercised. Consequently, there is no assurance that the value realized by
an executive officer will be at or near the value estimated above. These
amounts should not be used to predict stock performance.
10
<PAGE>
(3) In accordance with the tax rules governing incentive stock options, these
options were granted at an exercise price equal to 110% of the fair market
value on the date of grant. The options to purchase shares of the
Company's Class A Special Common Stock become exercisable at the rate of
40% of the shares covered thereby on the second anniversary of the date of
grant, another 20% on each of the third and fourth anniversaries of the
date of grant, and another 20% six months prior to the fifth anniversary
of the date of grant.
(4) In addition to the options described above, options to purchase 2,600
shares of the common stock of QVC, Inc. at an exercise price of $865.47
per share were granted to Mr. Brian L. Roberts on July 7, 1999. See note
(7) under "Executive Compensation--Summary Compensation Table."
Stock Option Exercises and Holdings
The following table sets forth information related to options exercised
during 1999 by the Chief Executive Officer and each of the Company's other
four most highly compensated executive officers during 1999, and the number
and value of options or SARs held at December 31, 1999 by such individuals.
Aggregated Option Exercises in 1999 and Option Values at December 31, 1999
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares December 31, 1999(#) December 31, 1999($)
Acquired on Value ------------------------- --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Ralph J. Roberts
Class A Special
Common Stock.......... 2,921,518(1) (1) 5,570,892 1,453,770 $239,251,400 $ 45,672,619
Julian A. Brodsky(2)
Class A Special Common
Stock.................. 807,785(3) $ 942,947(3) 1,877,369 1,541,258 $ 80,763,349 $ 58,628,474
Brian L. Roberts(2)
Class A Special Common
Stock.................. 550,927 $17,260,219 555,005 8,413,977 $ 22,801,962 $228,501,217
Lawrence S. Smith(2)
Class A Special Common
Stock.................. 340,180 $ 9,218,896 159,992 1,523,314 $ 6,499,126 $ 56,271,872
John R. Alchin(2)
Class A Special
Common Stock.......... 215,706 $ 6,799,848 292,814 1,226,256 $ 12,165,881 $ 45,269,963
</TABLE>
- --------
(1) Represents 2,921,518 shares of Class A Special Common Stock to be issued
to Mr. Ralph J. Roberts which were credited to his account. The receipt of
such shares has been deferred until July 2002 pursuant to the Company's
1997 Deferred Stock Option Plan (the "Deferred Stock Option Plan"),
resulting from the net exercise on February 12, 1999 of options to
purchase 1,991,556 shares at an exercise price of $3.1111 per share and
options to purchase 1,644,204 shares at an exercise price of $9.5625 per
share, net of 75,446 shares withheld to satisfy certain tax obligations.
The fair market value of such shares on such date was $34.3125 per share.
The value ultimately realized with respect to such shares will be
determined based upon the fair market value of such shares upon their
issuance to Mr. Ralph J. Roberts. If such shares (and such withheld
shares) had been issued to Mr. Ralph J. Roberts on the date of exercise,
the aggregate value realized by him with respect to such exercises would
have been $102,833,384.
(2) See also note (7) under "Executive Compensation--Summary Compensation
Table."
11
<PAGE>
(3) Mr. Brodsky realized the value shown above upon the exercise of options to
purchase 18,459 shares of Class A Special Common Stock. In addition,
789,326 shares of Class A Special Common Stock to be issued to Mr. Brodsky
were credited to his account. The receipt of such shares has been deferred
until January 2003 pursuant to the Deferred Stock Option Plan, resulting
from the net exercise on January 7, 1999 of options to purchase 554,472
shares at an exercise price of $3.1111 per share and the net exercise on
February 23, 1999 of options to purchase 416,332 shares at an exercise
price of $9.5625 per share, net of 22,034 shares withheld to satisfy
certain tax obligations. The per share fair market value of such shares on
January 7, 1999 was $31.50 and on February 23, 1999 was $38.0313. The
value ultimately realized with respect to such shares will be determined
based on the fair market value of such shares upon their issuance to Mr.
Brodsky. If such shares (and such withheld shares) had been issued to Mr.
Brodsky on the dates of exercise, the aggregate value realized by him with
respect to such exercises would have been $27,593,322.
Pension Plans
Under the Company's Supplemental Executive Retirement Plan (the "Plan"),
adopted July 31, 1989, supplemental retirement, death and disability benefits
may be paid to or in respect of certain senior executives employed by the
Company and its affiliated companies, as selected by the Company's Board of
Directors. The Plan contemplates the payment of various percentages of a
participant's Final Average Compensation (as actuarially reduced, in certain
circumstances, and as defined below) in the event that the participant (i)
elects to retire early (after the later of the participant's 55th birthday or
20 years of service with the Company); (ii) retires at age 65 or after;
(iii) suffers a permanent disability which renders the participant incapable
of employment in the same or a similar occupation; or (iv) dies. A participant
may elect a reduction in lifetime benefits in exchange for the continuation of
payments to a surviving spouse. As of the date of this Proxy Statement,
Messrs. Ralph J. Roberts and Brodsky (who are each credited with 30 years of
service, the maximum credited service allowed under the Plan) are the only
current employees selected by the Board of Directors to participate in the
Plan.
The following table shows the annual single life annuity retirement benefit
which Messrs. Ralph J. Roberts and Brodsky, respectively, would receive based
on remuneration covered by, and years of service credited under, the Plan if
he had retired on January 1, 2000 at age 65 (or older). The benefits shown
below are subject to reduction for Social Security benefits.
Pension Plan Table
<TABLE>
<CAPTION>
Final Average Years of Service
Compensation(1) 30 or More(2)
--------------- ----------------
<S> <C>
$ 600,000.................................................. $360,000
700,000.................................................. 420,000
800,000.................................................. 480,000
900,000.................................................. 540,000
1,000,000.................................................. 600,000
1,100,000.................................................. 660,000
1,200,000.................................................. 720,000
</TABLE>
- --------
(1) Final Average Compensation equals one-fifth of the total compensation for
the five years preceding termination of employment. Compensation includes
salary, bonus (including any deferred bonus) and any other supplementary
remuneration, but excludes discretionary payments made to participants to
offset tax liabilities incurred upon the exercise of nonqualified stock
options and split-dollar life insurance bonuses. In the case of Mr. Ralph
J. Roberts, Final Average Compensation may, under some circumstances, be
increased as described in "Agreements with Executive Officers--
Compensation Agreement with the Chief Executive Officer--Election to
Become a Consultant," below.
(2) This column represents the maximum benefits payable under the Plan.
12
<PAGE>
The Company also has an agreement with Mr. Brodsky pursuant to which he is
entitled to a $30,000 payment each year for 15 years commencing upon his
termination of employment, subject to a vesting schedule. Any benefits
received under this agreement reduce the benefits to which Mr. Brodsky is
entitled under the Plan.
Executive Cash Bonus Plan
The Comcast Corporation 1996 Executive Cash Bonus Plan (the "Executive Cash
Bonus Plan") provides for an annual cash bonus to be paid to eligible
employees of the Company ("Participants") selected by the Subcommittee on
Performance-Based Compensation of the Compensation Committee of the Board of
Directors (the "Compensation Subcommittee") with respect to years from 1996
(beginning July 1, 1996) through 2003 (each a "Plan Year"). The purpose of the
Executive Cash Bonus Plan is to provide performance-based cash bonus
compensation in accordance with a formula that is based on the financial
success of the Company as part of an integrated compensation program. The
Executive Cash Bonus Plan is intended to satisfy the requirements in Section
162(m) of the Internal Revenue Code and regulations thereunder for
"performance-based compensation" to employees subject to that provision, which
compensation is deductible by the Company even if total compensation to an
employee receiving it exceeds $1 million in any year.
Eligibility. The Compensation Subcommittee has designated all of the
Company's named executive officers and five additional employees, one of whom
is an executive officer, as Participants in the Executive Cash Bonus Plan. The
Executive Cash Bonus Plan also provides that the Compensation Subcommittee may
from time to time designate other key executives to be included as
Participants in the Executive Cash Bonus Plan. The Compensation Subcommittee
expects that Participants in the Executive Cash Bonus Plan will be limited to
employees whose compensation is or may be subject to Section 162(m).
Bonus Entitlement. The maximum amount of the bonus payable under the
Executive Cash Bonus Plan (the "Target Bonus") with respect to any Plan Year
is (a) 150% of the sum of a Participant's base salary and any guaranteed bonus
awarded by the Compensation Subcommittee to such Participant for such Plan
Year, plus (b) the amount, if any, by which the Participant's bonus under the
Executive Cash Bonus Plan in any prior Plan Year was less than the Target
Bonus for such prior Plan Year(s). In no event, however, can a Participant's
Target Bonus for any Plan Year exceed $3 million.
The Executive Cash Bonus Plan requires that at the beginning of each Plan
Year the Compensation Subcommittee establish two goals for the Company's Cash
Flow (as defined in the Executive Cash Bonus Plan) for such Plan Year, a First
Tier Goal and a Second Tier Goal (which shall be higher than the First Tier
Goal). Each Participant in the Executive Cash Bonus Plan is entitled to a
bonus with respect to a Plan Year which is equal to 66 2/3% of the
Participant's Target Bonus if the Company's Cash Flow for the Plan Year is at
least equal to the First Tier Goal, and 100% of the Target Bonus if the
Company's Cash Flow for the Plan Year is at least equal to the Second Tier
Goal. If the level of Cash Flow for the Plan Year is higher than the First
Tier Goal and lower than the Second Tier Goal, the bonus with respect to such
Plan Year shall be such percentage of the Participant's Target Bonus in excess
of 66 2/3% as is determined by prorating the difference between 66 2/3% and
100%. If the level of Cash Flow for a Plan Year is below the First Tier Goal
established with respect to such Plan Year, no bonus is payable under the
Executive Cash Bonus Plan for that Plan Year.
Each Participant shall be entitled to receive a bonus in accordance with the
Executive Cash Bonus Plan only after certification by the Compensation
Subcommittee that the performance goals have been satisfied. The bonus payment
under the Executive Cash Bonus Plan is to be paid to each Participant as soon
as practicable following the close of the applicable Plan Year.
13
<PAGE>
The Compensation Subcommittee has discretion under the Executive Cash Bonus
Plan to reduce or eliminate the bonus otherwise payable to a Participant if it
determines that such a reduction or elimination of the bonus is in the best
interests of the Company.
In the event any payment of a bonus otherwise payable under the Executive
Cash Bonus Plan occurs more than two months after the close of the Plan Year,
the amount of the bonus otherwise payable shall be increased by the amount
such bonus payment would earn if it were invested in an investment bearing a
7% annual rate of return, compounded daily, or such other reasonable rate of
interest as may be determined by the Compensation Subcommittee, during the
period from the close of the Plan Year with respect to which such bonus is
paid and the date the bonus is actually paid.
"Cash Flow" is defined in the Executive Cash Bonus Plan as the operating
income before depreciation and amortization for the Company and those of its
subsidiaries which are included with the Company in its consolidated financial
statements as prepared by the Company in accordance with generally accepted
accounting principles. In the event of a significant acquisition or
disposition of any assets, business division, company or other business
operations of the Company during a Plan Year that is reasonably expected to
have an effect on Cash Flow as otherwise determined under the terms of the
Executive Cash Bonus Plan, the Executive Cash Bonus Plan provides that the
First Tier Goal and the Second Tier Goal shall be adjusted to take into
account the impact of such acquisition or disposition so as to preserve the
relationship between the Cash Flow goals for the Plan Year and the Company's
performance in the prior comparable period, on a pro forma basis giving effect
to the acquisition or disposition, as further adjusted to reflect any aspects
of the transaction that should be taken into account to ensure comparability
between amounts in the prior Plan Year and the current Plan Year.
Administration. The Executive Cash Bonus Plan is administered by the
Compensation Subcommittee.
Amendment and Termination of the Plan. The Executive Cash Bonus Plan may be
terminated or revoked by the Company at any time and amended by the Company
from time to time, provided that neither the termination, revocation or
amendment of the Executive Cash Bonus Plan may, without the written approval
of the Participant, reduce the amount of a bonus payment that is due, but has
not yet been paid, and provided further that no changes that would increase
the amount of bonuses determined under provisions of the Executive Cash Bonus
Plan shall be effective without approval by the Compensation Subcommittee and
without disclosure to and approval by the shareholders of the Company in a
separate vote prior to payment of such bonuses. In addition, the Executive
Cash Bonus Plan may be modified or amended by the Compensation Subcommittee,
as it deems appropriate, in order to comply with any rules, regulations or
other guidance promulgated by the Internal Revenue Service with respect to
applicable provisions of the Internal Revenue Code as they relate to the
exemption for "performance-based compensation" under Section 162(m).
Agreements with Executive Officers
Compensation Agreement with the Chief Executive Officer
A Compensation and Deferred Compensation Agreement and Stock Appreciation
Bonus Plan with the Chief Executive Officer (the "1993 Compensation
Agreement") was approved by the Company's shareholders on June 22, 1994.
Certain terms of the 1993 Compensation Agreement expired on December 31, 1997,
and on December 16, 1997 the Company and the Chief Executive Officer entered
into a new Compensation and Deferred Compensation Agreement. This agreement
was amended and restated effective August 31, 1998, and then amended again
effective August 19, 1999 (as so amended, the "1998 Compensation Agreement").
The 1998 Compensation Agreement generally extends the terms of the 1993
Compensation Agreement with certain modifications.
14
<PAGE>
The 1998 Compensation Agreement provides that the Chief Executive Officer
will continue to serve as Chairman of the Board of Directors of the Company
until December 31, 2002, or until such time as he may elect to change his
status to that of a non-executive consultant, and that until he makes such
election he will continue to devote substantially all of his working time to
the Company, on the terms and conditions summarized below. If he elects to
become a non-executive consultant, he shall devote such time as is necessary
to perform the functions reasonably requested by the Company. In addition, for
a period of five years following any termination of the service period of the
1998 Compensation Agreement, the Chief Executive Officer will perform such
reasonable ceremonial functions as the Company may request, and will promote
the interests and goodwill of the Company in such manner as the Company may
reasonably request.
Base Salary. The 1998 Compensation Agreement provides that the Chief
Executive Officer will receive an annual base salary of $1 million beginning
in 1998, as adjusted (but never reduced, except pursuant to an overall plan to
reduce the compensation of all senior executive officers of the Company) in
order to reflect the greater of increases in the consumer price index
subsequent to 1997 and the average percentage increase in the base
compensation of the five employees of the Company (other than the Chief
Executive Officer) with the highest base compensation.
Bonus. The 1998 Compensation Agreement provides that so long as he continues
to serve as an executive of the Company the Chief Executive Officer will be
eligible to receive annual bonuses of up to 50% of his base salary in
accordance with the Company's Executive Cash Bonus Plan, based on performance
targets established by the Compensation Subcommittee.
Split-Dollar Life Insurance. The 1998 Compensation Agreement requires the
Company to continue to provide and to maintain the split-dollar life insurance
provided to the Chief Executive Officer under the 1993 Compensation Agreement,
and in addition to provide additional survivorship split-dollar life insurance
to the Chief Executive Officer and his spouse. Such split-dollar life
insurance includes certain split-dollar life insurance provided pursuant to
the 1993 Compensation Agreement to replace the potential benefits represented
by the Company's terminated discretionary bonus plan with respect to the
appreciation through March 15, 1994, in the options for Class A Special Common
Stock previously awarded to the Chief Executive Officer, taking into account
the financial position of the Company and the tax deductibility of any such
payments. See "Report on Executive Compensation of the Compensation
Committee's Subcommittee on Performance-Based Compensation." Under the split-
dollar life insurance arrangements, the Company pays a portion of the annual
premiums for certain single-life and joint-and-survivor life insurance
policies for the Chief Executive Officer, and upon payment of the policies at
the death of the Chief Executive Officer or of the survivor of the Chief
Executive Officer and his spouse, as applicable, the Company recovers all of
the cumulative premiums previously paid by the Company for the whole-life
portion of such policies. The Chief Executive Officer is responsible for
payment of the portion of such annual premiums representing the cost of term
insurance for each year. The Company also pays the Chief Executive Officer an
annual cash bonus in an amount equal to the portion of the annual premium for
such life insurance that he is required to pay; in addition, the Company
increases the bonus by an amount sufficient to pay any income tax or gift tax
liability incurred in connection with payment of the bonus.
Supplemental Death Benefit. Upon the death of the Chief Executive Officer,
the 1998 Compensation Agreement requires the Company to pay a supplemental
death benefit (the "Death Benefit") to the personal representatives of the
Chief Executive Officer. The amount of the Death Benefit shall initially be
$31.2 million. Under the terms of the 1998 Compensation Agreement, the Chief
Executive Officer may request that the Company invest portions of the Death
Benefit in certain investments identified by the Chief Executive Officer.
Should the Company choose to comply with the Chief Executive Officer's
request, the amount of the Death Benefit will be adjusted to reflect the
increase or decrease in value of any such investments. The 1998 Compensation
Agreement substituted the Death Benefit for two bonus arrangements included in
the 1993 Compensation Agreement that
15
<PAGE>
were based on appreciation of the Company's Class A Common Stock from the date
of grant of options to purchase Class B Common Stock to the date of exercise.
The Compensation Subcommittee determined that the after-tax present value cost
to the Company of the Death Benefit was approximately equal to the cost of the
bonuses that would otherwise have been paid. The Company must pay the Death
Benefit within six months from the date of the Chief Executive Officer's
death.
Termination. The 1998 Compensation Agreement will terminate upon the Chief
Executive Officer's death, at the Company's option upon his disability, or for
cause (as such terms are defined in the 1998 Compensation Agreement) upon a
vote of not less than two-thirds of the entire membership of the Company's
Board of Directors. If his employment is terminated by reason of his death or
disability, the Company shall continue to pay his annual base salary on a
monthly basis to him or his spouse, during their lifetimes, for a maximum of
five years, and the Accrued Cash Bonus, the Benefit Plans (as such terms are
defined in the 1998 Compensation Agreement) and the Death Benefit will
continue to be payable. In the event of death, all of his outstanding stock
options will vest fully and remain exercisable for their remaining terms. If
his employment is terminated by the Company in violation of the 1998
Compensation Agreement, he shall remain entitled to substantially all of the
benefits under the 1998 Compensation Agreement.
Noncompetition and Confidentiality. Under the 1998 Compensation Agreement,
the Chief Executive Officer agrees not to compete with the Company during his
employment and for five years after termination of his employment. The
agreement also requires him to maintain the confidentiality of certain
information of the Company, and not to use such information except for the
benefit of the Company, at all times during his employment and after
termination of his employment. Breach of any of such obligations constitutes
cause for termination of the 1998 Compensation Agreement and terminates the
Company's obligations for payments subsequent to any discharge of the Chief
Executive Officer.
Change of Control Provisions. Prior to any "Change of Control" (as defined
below), the Company must establish and fund a grantor trust, the amounts in
which will be subject to claims of the Company's creditors in the case of the
Company's bankruptcy, for the purpose of paying all deferred compensation,
nonqualified retirement benefits, and split-dollar life insurance premiums and
bonuses for the Chief Executive Officer then applicable. Upon the occurrence
of a Change of Control, such trust must become irrevocable (if not already
irrevocable), and the Company must continue to make payments into such trust
to maintain sufficient amounts therein to fund all benefits subject to the
trust. A "Change of Control" is defined as occurring when persons other than
the Chief Executive Officer and members of his family or trusts for their
benefit acquire voting power over more than 50% of the voting stock of the
Company.
Election to Become a Consultant. The Chief Executive Officer may at any
time, upon 30 days notice to the Company, elect to change his position from
that of an executive to that of consultant to the Company. In such event, he
shall continue to receive all of the compensation provided under the 1998
Compensation Agreement, other than the bonus under the Executive Cash Bonus
Plan. If he elects to become a consultant, the Chief Executive Officer's
entitlement to retirement benefits under the Company's Supplemental Executive
Retirement Plan will be adjusted annually to reflect 150% of his base salary
as a consultant, but his benefits under such plan will not in any event exceed
the bonus he could have received under the 1998 Compensation Agreement had he
continued to work as an executive.
Compensation Agreement with Mr. Brian L. Roberts
The Company entered into a Compensation Agreement (the "Compensation
Agreement") with Brian L. Roberts, the Company's President. The following is a
description of the material terms of the Compensation Agreement.
16
<PAGE>
Term. The term of the Compensation Agreement is from June 16, 1998 through
June 30, 2003 (the "Employment Period"). Mr. Brian L. Roberts agrees to work
full time for the Company during the Employment Period.
Base Salary. The Compensation Agreement provides that Mr. Brian L. Roberts
will receive an annual base salary of $1 million beginning in 1998, as
adjusted (but never reduced, except pursuant to an overall plan to reduce the
compensation of all senior executive officers of the Company) from time to
time to reflect his contribution to the growth and success of the Company.
Bonus; Options. Pursuant to the Compensation Agreement, Mr. Brian L. Roberts
is eligible to receive an annual performance bonus, payable in cash,
commencing in 1999, of up to 150% of his base salary for the applicable year.
The amount of the bonus is determined annually by the Compensation
Subcommittee, in accordance with, and upon satisfaction of, the standards
contained in the Company's Executive Cash Bonus Plan. The Compensation
Agreement also provides that Mr. Brian L. Roberts is to receive grants of
options to purchase 3,000,000 shares of the Class A Special Common Stock of
the Company granted effective June 16, 1998 and options to purchase 1,000,000
shares of the Class A Special Common Stock of the Company granted or to be
granted effective the second business day of each fiscal quarter in 1999 and
2000, or such earlier date as the Compensation Subcommittee may determine in
its sole discretion.
Deferred Compensation. The Compensation Agreement provides that the Company
and Mr. Brian L. Roberts may, by written agreement prior to the end of any
calendar year during the Employment Period, cause the payment of all or a
portion of the compensation payable to Mr. Brian L. Roberts in the subsequent
calendar year to be deferred to a subsequent calendar year in accordance with
and subject to the Company's 1996 Deferred Compensation Plan.
Termination. The Compensation Agreement will terminate upon the death of
Mr. Brian L. Roberts, at the Company's option upon his disability, or for
cause (as such terms are defined in the Compensation Agreement) upon a vote of
not less than two-thirds of the entire membership of the Company's Board of
Directors. If his employment is terminated by reason of his death or
disability, the Company shall continue to pay his annual base salary on a
monthly basis to him or his spouse, during their lifetimes, for a maximum of
five years, and the accrued cash bonus as provided for in the Compensation
Agreement and any applicable health plan benefits will continue to be payable.
If his employment is terminated by the Company in violation of the
Compensation Agreement, he shall remain entitled to substantially all of the
benefits under the Compensation Agreement.
Noncompetition and Confidentiality. Under the Compensation Agreement,
Mr. Brian L. Roberts agrees not to compete with the Company during his
employment and for two years after termination of his employment. The
Agreement also requires him to maintain the confidentiality of certain
information of the Company, and not to use such information except for the
benefit of the Company, at all times during his employment and after
termination of his employment. Breach by Brian L. Roberts of any of such
obligations constitutes cause for termination of the Compensation Agreement,
and terminates the Company's obligations for payments subsequent to such
termination.
Change of Control Provisions. Prior to any "Change of Control" (as defined
below), the Company must establish and fund a grantor trust, the amounts in
which will be subject to claims of the Company's creditors in the case of the
Company's bankruptcy, for the purpose of paying all deferred compensation and
term life insurance premiums and bonuses for Mr. Brian L. Roberts then
applicable. Upon the occurrence of a Change of Control, such trust must become
irrevocable (if not already irrevocable), and the Company must continue to
make payments into such trust to maintain sufficient amounts therein to fund
all benefits subject to the trust. A "Change of Control" is defined as
occurring when persons other than Mr. Brian L. Roberts and members of his
immediate family or trusts for their benefit acquire voting power over more
than 50% of the voting stock of the Company.
17
<PAGE>
Term Life Insurance Agreement with Mr. Brian L. Roberts
The Company has entered into a Term Life Insurance Premium and Tax Bonus
Agreement dated as of September 23, 1998 (the "Term Life Insurance Agreement")
with Mr. Brian L. Roberts, the Company's President. The Term Life Insurance
Agreement provides that, as additional compensation to Mr. Brian L. Roberts,
the Company will reimburse him for all of the premiums on certain specified
20- and 15-year level-premium term life insurance policies aggregating $170
million in insurance on his life, and that the Company will pay him an
additional bonus equal to the income tax payable on such reimbursement and the
bonus. The annual amount of the premiums to be reimbursed under the Term Life
Insurance Agreement is approximately $189,000 through 2012 and $177,000 from
2013-2017.
The Term Life Insurance Agreement provides that prior to any "Change of
Control" (as defined below), the Company must establish a grantor trust, the
amounts in which will be subject to claims of the Company's creditors in the
case of the Company's bankruptcy, for the purpose of paying all premium
reimbursements and tax bonuses for the remaining life of the policies subject
to the Term Life Insurance Agreement. Upon the occurrence of a Change of
Control, such trust must become irrevocable (if not already irrevocable), and
the Company must make payments into such trust in an amount equal to the full
amount required to be paid during the remaining term of the insurance
policies. A "Change of Control" is defined as occurring when persons other
than Mr. Brian L. Roberts and members of his family or trusts for their
benefit acquire voting power over more than 50% of the voting stock of the
Company. The Term Life Insurance Agreement does not terminate upon termination
of the employment of Mr. Brian L. Roberts by the Company.
Employment Agreements with Messrs. Smith and Alchin
The Company has entered into employment agreements with two other named
executive officers of the Company: Lawrence S. Smith, the Company's Executive
Vice President, and John R. Alchin, the Company's Executive Vice President and
Treasurer. The following is a description of the material terms of such
agreements.
The term of such agreements is from January 1, 1995 through December 31,
2000 (the "Executive Employment Period"). Mr. Smith and Mr. Alchin each agree
to work full time for the Company during the Executive Employment Period.
The agreement with Mr. Smith provides for a base salary of $600,000 in 1995,
and the agreement with Mr. Alchin provides for a base salary of $500,000 in
1995. In each case, for each year in the Executive Employment Period
subsequent to 1995 the base salary is increased by the greater of 5% or the
percentage increase during the previous year in the consumer price index.
Pursuant to the agreements, each of the executives is eligible to receive an
annual performance bonus, commencing in 1996, of up to 50% of his base salary
for the applicable year. The amount of the bonus is determined annually by the
Compensation Subcommittee, based on the performance of the Company and of the
executive during such year, and is payable in cash or in shares of Class A
Special Common Stock of the Company, at the discretion of the Compensation
Subcommittee.
Each agreement provides that the executive's employment may be terminated
without cause by the Company and that he may resign voluntarily. If the
executive's employment is terminated without cause, he is entitled to receive
his then-current base salary and all insurance, medical or other similar
benefits for a period of one year from the date of discharge, subject to
offset by other compensation or benefits earned by the executive during such
period, and he is entitled to receive his bonus for the year of discharge. If
the executive resigns, or is terminated for cause (as defined in the
agreement), he is entitled only to his base salary for days actually worked
and any amounts due to him under the Company's 1996 Deferred Compensation
Plan.
18
<PAGE>
Under each of the agreements, the executive agrees not to compete with the
Company during his employment and for two years after termination of his
employment. The agreements also require each executive to maintain the
confidentiality of certain information of the Company, and not to use such
information, except for the benefit of the Company, at all times during his
employment and after termination of his employment. Breach by the executive of
any of such obligations constitutes cause for termination of the applicable
agreement, and terminates the Company's obligations for payments subsequent to
any discharge of the executive.
Each of the agreements provides that it shall continue in effect upon the
merger of the Company into another entity, or in similar events.
Stock Performance Graph
The following graph compares the yearly percentage change in the cumulative
total shareholder return on each of the Company's Class A Common Stock and
Class A Special Common Stock during the five years ended December 31, 1999
with the cumulative total return on the Standard & Poor's 500 Stock Index and
with a selected peer group consisting of the Company and three other companies
engaged in the cable communications industry: Cablevision Systems Corporation
(Class A); Adelphia Communications Corporation ("Adelphia") and Cox
Communications, Inc. ("Cox"). This peer group (the "Current Peer Group")
represents a change from the peer group used for comparison by the Company in
prior years (the "Prior Peer Group"). The Prior Peer Group included Jones
Intercable, Inc. ("Jones Intercable"), Time Warner, Inc. ("Time Warner"), TCA
Cable TV, Inc. ("TCA") and TCI Communications, Inc. ("TCI"), and did not
include Adelphia or Cox. Jones Intercable was omitted from the Current Peer
Group because of its acquisition by the Company, Time Warner was omitted from
the Current Peer Group because of its pending acquisition by America Online,
Inc., TCA was omitted from the Current Peer Group because of its acquisition
by Cox and TCI was omitted from the Current Peer Group because of its
acquisition by AT&T Corp. Adelphia and Cox were added to the Current Peer
Group because of the Company's belief that Adelphia and Cox are in a line of
business similar to that of the Company and that a comparison of the
performance of the Company's Class A Common Stock and Class A Special Common
Stock against the performance of the common stock of Adelphia and Cox is a
meaningful comparison that would be helpful to a person making an investment
decision with respect to the Company's Class A Common Stock or Class A Special
Common Stock. The comparison assumes $100 was invested on December 31, 1994 in
the Company's Class A Common Stock and Class A Special Common Stock and in
each of the foregoing indices and assumes the reinvestment of dividends.
19
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[Graph Appears Here]
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Comcast Class A..................................... 115 116 210 380 634
Comcast Class A Special............................. 117 115 204 381 656
Current Peer Group Index............................ 114 121 219 399 637
Prior Peer Group Index.............................. 110 108 185 366 480
S&P 500 Stock Index................................. 138 169 226 290 351
</TABLE>
Report on Executive Compensation of the Compensation Committee's Subcommittee
on Performance-Based Compensation
Compensation Policy. The Compensation Committee (the "Committee") is
responsible for making recommendations to the Board of Directors on executive
compensation. In 1999, the Committee deferred to its Subcommittee on
Performance-Based Compensation (the "Compensation Subcommittee") on virtually
all compensation decisions for the Company's executive officers in light of
the Compensation Subcommittee's designated responsibility for establishing
performance-based criteria and goals for compensation to senior executives and
for administering the Company's 1987 Stock Option Plan, the 1996 Stock Option
Plan, the 1990 Restricted Stock Plan, the Executive Cash Bonus Plan and other
bonus plans, and for approval of agreements with the Chief Executive Officer,
Mr. Brian L. Roberts and others.
The goal of the Committee and the Compensation Subcommittee is to attract
and retain highly qualified executive officers and key employees in an effort
to enhance shareholder value. The Company attempts to realize these goals by
providing competitive compensation and permitting executive officers to take
an ownership stake in the Company commensurate with their relative levels of
20
<PAGE>
seniority and responsibilities. The members of the Compensation Subcommittee
are disinterested non-employee directors as well as "outside directors" (as
defined in Section 162(m) of the Internal Revenue Code).
Each year a general review of the Company's executive compensation is
conducted, except for the compensation of the Chief Executive Officer, which
was determined under the 1993 Compensation Agreement and separately reviewed
in connection with the execution of the 1998 Compensation Agreement. A key
factor in the assessment of the Company's executive officers is the Company's
overall performance, in light of their principal responsibility for overall
corporate policy-making, management and administration. In the second half of
1998, the Committee and Compensation Subcommittee also retained independent
compensation consultants to review the compensation package of the Company's
president and the overall structure of the Company's incentive compensation
programs for all executive employees. As a result of the latter review,
beginning in 1999 the Compensation Subcommittee adjusted the ratios of stock
options to base salary and of cash bonus to equity-based incentive
compensation compared with compensation awarded in years prior to 1999.
The principal forms of executive compensation used by the Company in recent
years are base salary, bonuses and stock options, and, for certain executives,
split-dollar (whole) life insurance policies and term insurance policies. The
Company seeks to achieve a mix of these various forms of compensation which
will properly compensate and motivate its executives on an individual basis
commensurate with their relative levels of seniority and responsibility. The
goal is to provide the executive officers with total compensation that, based
on individual and Company performance viewed over an appropriate period of
time, is generally between the 50th and 75th percentile of total compensation
for executives with comparable positions at peer companies, as confirmed by an
independent compensation consultant.
As discussed below, a variety of factors are considered in arriving at the
compensation paid to the Company's executive officers other than the Chief
Executive Officer. No specific weighting was assigned to any of the factors
considered in determining the remuneration paid to the named executive
officers for 1999, except that, with respect to the Compensation Agreement
with Mr. Brian L. Roberts, the Compensation Subcommittee relied on the
analysis of the Company's independent compensation consultant. See "Agreements
with Executive Officers--Compensation Agreement with Mr. Brian L. Roberts."
Base Salary. The Company's philosophy with respect to setting base salary is
to compensate its executive officers with reasonable current income on a
competitive basis. The Compensation Subcommittee increased the base salary of
the Chief Executive Officer by 5% in 1999 pursuant to the terms of the 1998
Compensation Agreement. The base salary of Mr. Brian L. Roberts was increased
by approximately 45% in connection with entering into the Compensation
Agreement, and based on the analysis of the Company's independent compensation
consultant. See "Agreements with Executive Officers--Compensation Agreement
with Mr. Brian L. Roberts." The base salaries of Messrs. Brodsky, Smith and
Alchin were increased by 5% each in 1999. The base salaries of Messrs. Smith
and Alchin were increased pursuant to the terms of their employment agreements
with the Company. No specific objective measures of individual or corporate
performance were reviewed in determining the base salary of executive officers
for 1999.
Bonuses. In August 1996, the Compensation Subcommittee adopted the Executive
Cash Bonus Plan, which was approved by the Company's shareholders on June 18,
1997, and in 1999 the Compensation Subcommittee amended the Executive Cash
Bonus Plan, which amendment was approved by the Company's shareholders on June
21, 1999. Under the Executive Cash Bonus Plan as amended, each executive
designated by the Compensation Subcommittee is eligible to earn an annual
bonus of up to 150% of his base salary and guaranteed bonus (the percentage
applicable to each executive as determined by the Compensation Subcommittee),
but not more than $3 million, based on annual cash flow performance targets
established in advance by the Compensation Subcommittee.
21
<PAGE>
Based on the Company's cash flow for such period, 100% of the target bonuses
were earned for 1999 under the plan.
The Executive Cash Bonus Plan was adopted based on the recommendation of the
Company's independent compensation consultant, and to satisfy the terms of the
Company's employment agreements with Messrs. Smith and Alchin. The
Compensation Subcommittee selected increases in cash flow as the single most
significant measure of operating performance of the Company and other
companies in the Company's industries.
The bonus awarded to Mr. Smith for 1999 included an annual guaranteed bonus
of $5,788, in addition to the bonus awarded under the Executive Cash Bonus
Plan. The remaining bonuses earned by the named executive officers (other than
the Chief Executive Officer and Mr. Brodsky) in 1999 related to termination of
the Company's discretionary bonus plan, as discussed below.
Equity-Based Incentive Compensation. The Company's equity-based incentive
compensation is in the form of stock option grants. The Compensation
Subcommittee believes that reliance upon such incentives is advantageous to
the Company because it fosters a long-term commitment by the recipients to the
Company and motivates these executives to seek to improve the long-term market
performance of the Company's stock. Stock options produce value to executives
only if the price of the Company's stock appreciates, thereby directly linking
the interests of the executives with those of its shareholders.
In 1999, the Compensation Subcommittee awarded stock options to each of the
named executive officers. For executive officers other than Mr. Brian L.
Roberts, such option grants were generally based on a proportional
relationship to the recipients' expected cash compensation, taking into
account prior option grants, and were consistent with options granted at the
same time to other members of senior management of the Company. The
Compensation Subcommittee awarded Mr. Brian L. Roberts a grant of options to
purchase 4 million shares of the Company's Class A Special Common Stock as
provided in the Compensation Agreement, and as supported by the recommendation
of its independent compensation consultant and its review of Mr. Brian L.
Roberts' achievements on behalf of the Company over the previous five years.
See "Agreements with Executive Officers--Compensation Agreement with Mr. Brian
L. Roberts."
Equity Ownership Policy. In 1998, the Company's Board of Directors adopted a
minimum equity ownership policy applicable to substantially all executives of
the Company with base salaries in excess of $150,000, as well as to directors.
Executives and directors subject to such policy may not sell shares of common
stock of the Company unless, following such sale, they continue to own at
least an amount of such common stock with a value equal to a multiple of their
annual base compensation from the Company. The Chief Executive Officer, as
well as Mr. Brian L. Roberts, the Company's President, and all non-employee
directors, are required to own stock with a value of five times base
compensation; other executives are required to own stock with a value of one
and one-half to four times their base compensation, depending on base
compensation. Based on their current base compensation, each of the other
executive officers named in this Proxy Statement is required under the policy
to own Company stock with a value of between three and one-half and four times
his base compensation. For purposes of the policy, stock owned by an
applicable person's spouse and children, and 60% of the value of an applicable
person's vested in-the-money stock options and deferred stock account in the
Company's 1997 Deferred Stock Option Plan is considered owned by the
applicable person. The Compensation Subcommittee believes that such policy
serves to align more fully the interests of management under the Company's
equity-based incentive compensation programs with the interests of the
Company's shareholders.
Compensation of Chief Executive Officer. The Company's by-laws do not
provide for a "Chief Executive Officer" of the Company. The Company has
determined that, for 1999, Mr. Ralph J. Roberts, the Chairman of the Company's
Board of Directors, was its chief executive officer for purposes of this Proxy
Statement.
22
<PAGE>
The Chief Executive Officer's compensation for 1999 was determined under the
terms of the 1993 Compensation Agreement and the 1998 Compensation Agreement.
The 1993 Compensation Agreement was entered into effective September 9, 1993,
as amended March 16, 1994, and approved by the Company's shareholders on June
22, 1994. See "Agreements with Executive Officers--Compensation Agreement with
the Chief Executive Officer." The levels of compensation provided under the
1993 Compensation Agreement and the 1998 Compensation Agreement were
determined based on a review by the Committee and Compensation Subcommittee
and the Company's independent compensation consultant of compensation levels
of chief executive officers at other companies in comparable industries and of
certain chief executive officers in other industries who, like Mr. Ralph J.
Roberts, were founders of companies and the persons primarily responsible for
the growth of such companies over a substantial period of time. The Committee
and Compensation Subcommittee also took into account its assessment of the
importance of maintaining the continued active participation of the Chief
Executive Officer in the Company's affairs over the period covered by the
Compensation Agreement, the Company's growth and overall performance during
the ten years prior to 1993 and the period from 1993 to 1998, and the Chief
Executive Officer's prior compensation levels during those periods. The
Committee and Compensation Subcommittee did not consider specific performance
measures in approving the 1993 Compensation Agreement and the 1998
Compensation Agreement, except to the extent that the 1993 Compensation
Agreement provided for stock option grants in 1994 that were inherently
related to future appreciation in the Company's Common Stock, and for bonuses
and other compensation which replaced the Company's discretionary bonus plan,
which also related to appreciation in the value of the Company's Common Stock
over the period from 1986 through 1993.
Such compensation consisted of the salary and benefits fixed by the 1998
Compensation Agreement, and, pursuant to the Company's undertaking in the 1993
Compensation Agreement to replace the potential benefits provided by the
Company's terminated discretionary bonus plan, additional split-dollar life
insurance benefits in an amount fixed in 1994 and generally calculated to
produce the same after-tax cost to the Company as the potential benefits under
the terminated discretionary bonus plan with respect to appreciation in the
Chief Executive Officer's previously awarded nonqualified options prior to
March 15, 1994. When such benefits were awarded in 1994, the Company's
compensation consultant reviewed the calculation of the potential benefits
provided by the terminated discretionary bonus plan and of the expected after-
tax cost of the additional split-dollar life insurance benefits, and advised
the Committee that its actions awarding such benefits were appropriate and
reasonable. In connection with the 1998 Compensation Agreement, the
Compensation Subcommittee substituted the $31.2 million Death Benefit for two
bonus arrangements included in the 1993 Compensation Agreement that were based
on appreciation of the Company's Class A Common Stock from the date of grant
to the date of exercise of the Chief Executive Officer's options to purchase
Class B Common Stock. The Compensation Subcommittee determined that the after-
tax present value cost to the Company of the Death Benefit was approximately
equal to the cost of the bonuses that would otherwise have been paid. The
Death Benefit was amended in 1999 to provide for a portion thereof to vary
based on the results of certain investments made by the Company in cooperation
with and at the suggestion of the Chief Executive Officer, with no increase in
after-tax present value cost to the Company, except that the base amount of
the Death Benefit was increased by $1.2 million up to $31.2 million based on a
calculation of the benefits forgone by the Chief Executive Officer in return
for the Death Benefit. The Compensation Subcommittee was advised by the
Company's independent compensation consultant that all compensation provided
under the 1998 Compensation Agreement was appropriate.
Effect of Internal Revenue Code Section 162(m). Effective January 1, 1994,
Section 162(m) of the Internal Revenue Code provides that certain compensation
in excess of $1 million paid to the chief executive officer and the four most
highly compensated executive officers of a public company (determined as of
the last day of the company's tax year) will not be deductible for federal
income tax purposes.
23
<PAGE>
The Compensation Subcommittee engages in an ongoing review of the Company's
compensation practices for purposes of obtaining the maximum continued
deductibility of compensation paid by the Company consistent with its existing
commitments and ongoing competitive needs. Certain forms of compensation are
not included in determining whether the $1 million limit under Section 162(m)
has been exceeded, such as certain "performance-based" compensation adopted by
a committee of at least two outside directors and approved by shareholders,
compensation paid under binding written contracts (including nonqualified
stock options) in effect prior to the proposal of the new provision, and
compensation paid pursuant to certain plans approved by shareholders prior to
enactment of the new provision. These forms of compensation continue to be
deductible without regard to Section 162(m). In general, compensation pursuant
to nonqualified options granted to date under the Company's 1987 Stock Option
Plan and 1996 Stock Option Plan will continue to be deductible for federal
income tax purposes when the options are exercised, and bonuses awarded under
the Executive Cash Bonus Plan will be deductible when paid.
Certain compensation was awarded during 1999 after consideration of the
termination of a plan (approved by the Company's shareholders on September 17,
1986) under which the Board of Directors had discretion to award cash bonuses
to employees or directors exercising nonqualified options to reimburse such
persons for the income taxes payable by them upon exercise of the options and
receipt of the bonus. The Committee determined that the discretionary bonus
plan did not come within any of the exceptions to Section 162(m), and that if
bonuses were to be awarded under such plan in 1994 or thereafter, they might
not be deductible. In addition, in light of the appreciation in the Company's
Common Stock over the period from 1987 to 1993, the Board of Directors
determined that continuation of the bonus plan could impose significant cash
burdens on the Company in future years. Accordingly, the Board of Directors
terminated the discretionary bonus plan as of December 31, 1993.
As part of the Committee's ongoing effort to replace the potential benefits
provided by the Company's terminated discretionary bonus plan, the Committee
awarded lump-sum bonuses, or, in the case of the Chief Executive Officer,
split-dollar life insurance benefits, in an amount generally calculated
(together with similar compensation awarded in 1994 through 1996) to produce
the same after-tax cost to the Company as the potential benefits under the
terminated discretionary bonus plan with respect to appreciation in previously
awarded nonqualified options prior to March 15, 1994. The Company's
compensation consultant advised the Committee that its actions to terminate
the discretionary bonus plan and award the compensation described above were
appropriate and reasonable. The Committee expects to continue to maintain the
split-dollar life insurance arrangements put in place for the Chief Executive
Officer and Mr. Brodsky, and to continue paying cash bonuses for this purpose
(in addition to the bonuses awarded under the Executive Cash Bonus Plan) to
the other named executive officers in approximately the same amounts paid in
1994-1999.
The Compensation Subcommittee adopted the Executive Cash Bonus Plan to
conform to the requirements of Section 162(m) for deductibility of the bonus
payments awarded under such plan. See "Executive Cash Bonus Plan."
With respect to the 1993 and 1998 Compensation Agreements, a portion of the
compensation paid to the Chief Executive Officer will not or may not be
deductible under Section 162(m) to the extent it is paid during the course of
his employment as an executive officer of the Company. The amount of
compensation paid to the Chief Executive Officer in 1999 that is expected to
be nondeductible to the Company is approximately $864,000. In addition,
approximately $647,000 of the compensation paid to Mr. Brian L. Roberts, the
Company's President, is also expected to be nondeductible under Section
162(m), due principally to the payment of amounts to cover premiums on term
life insurance policies and bonuses related to income tax liabilities arising
therefrom, the payment of amounts with respect to income tax obligations
arising upon the exercise of stock options and other incidental taxable fringe
benefits, the fair market value of which was considered non-performance-based
compensation for tax purposes in 1999.
24
<PAGE>
The Compensation Subcommittee determined that the Company should provide the
above-described compensation regardless of its nondeductibility or potential
nondeductibility, based on, among other things, (1) its determination of a
fair and competitive compensation level for the officers involved taking into
account their contributions to the Company, which, in the case of the Chief
Executive Officer, extend over the entire course of the Company's history and
(2) the relatively minimal effect on the Company of forgoing deductibility of
the specific annual compensation in excess of $1 million.
Members of the Compensation Subcommittee
Gustave G. Amsterdam
Joseph L. Castle
Bernard C. Watson
Members of the Compensation Committee
Gustave G. Amsterdam (Chairman)
Sheldon M. Bonovitz
Joseph L. Castle
Bernard C. Watson
Compensation of Directors
Each member of the Board of Directors who is not an employee of the Company
(a "non-employee director") receives an annual fee of $35,000, plus $2,000 for
each meeting of the Board of Directors attended and $1,000 for each meeting of
any committee of the Board of Directors attended which is not held in
conjunction with a meeting of the Board of Directors. In addition, any non-
employee director who serves as the chairperson of a committee of the Board of
Directors receives an annual fee of $1,000. Each director is also reimbursed
for incidental travel expenses for meetings attended. Mr. Amsterdam also
receives $1,000 as compensation for each meeting attended as the designee of
the Board of Directors on a committee of the Company's management.
The Company's 1996 Stock Option Plan provides that each non-employee
director will be granted annually, on each February 1, an option to purchase
5,400 shares of Class A Special Common Stock (except that the first such grant
to a new non-employee director will be an option to purchase 9,000 shares) at
an exercise price per share equal to the fair market value of a share of Class
A Special Common Stock on the date of grant. Each such option becomes
exercisable six months after the date of grant and generally expires five
years from the date of grant. Effective January 1, 1999, non-employee
directors of the Company must continuously own shares of the Company's common
stock with a value at least equal to five times their base annual compensation
from the Company, including 60% of the value of vested, in-the-money stock
options and deferred stock accounts.
Certain Related Party Transactions
Mr. Bonovitz, a director of the Company, is Chairman and Chief Executive
Officer of the law firm of Duane, Morris & Heckscher LLP, which provides
services to the Company from time to time.
Compensation Committee Interlocks and Insider Participation
Mr. Bonovitz, a member of the Compensation Committee, is Chairman and Chief
Executive Officer of the law firm of Duane, Morris & Heckscher LLP, which
provides services to the Company from time to time. Mr. Bonovitz is not a
member of the Compensation Subcommittee, which, during 1999, performed
substantially all functions of the Compensation Committee with respect to
senior executives of the Company, including administration of the Company's
stock option and restricted stock plans, the bonus plans applicable to senior
executives of the Company, and approval of all agreements with the Chief
Executive Officer, Mr. Brian L. Roberts and others.
25
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
At the meeting, the shareholders will elect nine directors to hold office
for the ensuing year and until their respective successors have been duly
elected and qualified. Should any one or more of these nominees become
unavailable to accept nomination or election as a director, the persons named
in the enclosed proxy will vote the shares which they represent for the
election of such other persons as the Board of Directors may recommend, unless
the Board of Directors reduces the number of directors. Each of the nominees
currently is serving as a director of the Company.
The following sets forth certain information about each nominee:
Ralph J. Roberts, 80, has served as a director and Chairman of the Board of
Directors of the Company for more than five years. He is the President and a
director of Sural. Mr. Roberts devotes the major portion of his time to the
business and affairs of the Company. He is the father of Mr. Brian L. Roberts.
Mr. Roberts is also a director of Comcast Cable Communications, Inc., Comcast
LCI Holdings, Inc. and Comcast JOIN Holdings, Inc.
Julian A. Brodsky, 66, has served as a director and Vice Chairman of the
Board of Directors of the Company for more than five years. He serves as
Treasurer and a director of Sural. Mr. Brodsky devotes a substantial portion
of his time to the business and affairs of the Company. He is also a director
of RBB Fund, Inc., Internet Capital Group, Inc. and NDS Group PLC.
Brian L. Roberts, 40, has served as President of the Company and a director
for more than five years. He is a Vice President and a director of Sural. Mr.
Roberts devotes the major portion of his time to the business and affairs of
the Company. He is a son of Mr. Ralph J. Roberts. Mr. Roberts is also a
director of Comcast Cable Communications, Inc., Comcast LCI Holdings, Inc.,
Comcast JOIN Holdings, Inc., At Home Corporation and The Bank of New York
Company, Inc.
Gustave G. Amsterdam, 91, has been a director of the Company for more than
five years. Mr. Amsterdam was, for more than five years before his retirement,
Chairman of the Board of Bankers Securities Corporation, a mercantile, real
estate management and operating company.
Sheldon M. Bonovitz, 63, has been a director of the Company for more than
five years. Mr. Bonovitz has been a partner specializing in tax matters with
the law firm of Duane, Morris & Heckscher LLP for more than five years and is
currently Chairman and Chief Executive Officer of that firm. Mr. Bonovitz is
also a director of Surgical Laser Technologies, Inc. and Premier Research
Worldwide, Ltd.
Joseph L. Castle, II, 67, has been a director of the Company for more than
five years. Mr. Castle has been, for more than five years, a financial
consultant and is the Chairman and Chief Executive Officer and a director of
Castle Energy Corporation, an independent oil and gas exploration and
production company. Mr. Castle is also a director of Charming Shoppes, Inc.
Bernard C. Watson, 72, has been a director of the Company for more than five
years. Prior to his retirement in 1997, Dr. Watson was Chairman of the Board
of Directors of Health Management Alternatives Foundation from 1993 through
1997. Until 1993, he had been President and Chief Executive Officer of the
William Penn Foundation for more than five years.
Irving A. Wechsler, 79, has been a director of the Company for more than
five years. Mr. Wechsler is currently of counsel in the firm of Wechsler,
Wolsh and Associates, Certified Public Accountants, in Pittsburgh,
Pennsylvania, where he had previously been a partner for more than five years.
Anne Wexler, 70, has been a director of the Company for more than five years
and has been for more than five years Chairman of the Wexler Group, a
consulting firm specializing in government
26
<PAGE>
relations and public affairs, which is an operating unit of Hill and Knowlton
Public Affairs Worldwide. Ms. Wexler is also a director of The Dreyfus
Corporation Index Funds, The Dreyfus Corporation Mutual Funds, New England
Electric System, and Wilshire Mutual Funds, Inc.
Committees and Meetings of the Board of Directors
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee. The Compensation Committee
has a Subcommittee on Performance-Based Compensation.
Messrs. Ralph J. Roberts (Chairman), Amsterdam, Bonovitz and Brian L.
Roberts serve as members of the Executive Committee, which held 11 meetings
during 1999. The Executive Committee acts for the directors in the intervals
between meetings of the Board of Directors.
Messrs. Amsterdam, Bonovitz, Brodsky, Castle, Watson and Wechsler (Chairman)
serve as members of the Audit Committee, which held six meetings during 1999.
The Audit Committee meets with the Company's independent public accountants,
counsel, internal audit department and management to discuss the scope and
results of the annual audit, internal accounting procedures and certain other
questions of accounting policy.
Messrs. Amsterdam, Castle and Watson serve as members of the Subcommittee on
Performance-Based Compensation of the Compensation Committee, which held four
meetings during 1999. The Compensation Subcommittee's functions include
responsibility for the Company's stock option, restricted stock and bonus
plans, establishing performance-based criteria and goals for compensation to
senior executive officers, and approving certain agreements with the Chief
Executive Officer and Mr. Brian L. Roberts. Messrs. Amsterdam (Chairman),
Bonovitz, Castle and Watson serve as members of the Compensation Committee,
which considers and determines all other compensation matters relating to the
Company's executive officers. The Compensation Committee held four meetings
during 1999, in conjunction with meetings of the Compensation Subcommittee.
Ms. Wexler (Chairperson) and Messrs. Castle and Watson serve as members of
the Nominating Committee, which held one meeting during 1999. The Nominating
Committee reviews the size and composition of the Board of Directors and is
responsible for recommending nominees to serve on the Board of Directors. In
carrying out its responsibilities, the Nominating Committee will consider
candidates recommended by other directors, employees and shareholders. Written
suggestions for candidates to serve as directors if nominated and elected
should be sent to the President of the Company at Comcast Corporation, 1500
Market Street, Philadelphia, Pennsylvania 19102-2148. The Company's by-laws
require that written notice of the intent to make a nomination at a meeting of
shareholders must be received by the President of the Company (a) with respect
to an election to be held at an annual meeting, not less than 90 days in
advance of the date which is the one year anniversary of the prior year's
annual meeting of shareholders, and (b) with respect to an election to be held
at a special meeting, the close of business on the seventh day following the
day on which notice of a special meeting of shareholders for the election of
directors is given to shareholders. The notice must contain: (a) the name and
address of the shareholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the shareholder
is a holder of record of the Company's stock entitled to vote at the meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all
arrangements or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the shareholder; (d) such
other information regarding each nominee proposed by such shareholder as would
have been required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had each nominee been
nominated, or
27
<PAGE>
intended to be nominated, by the Board of Directors; and (e) the consent of
each nominee to serve as a director of the Company if so elected.
The Board of Directors held 11 meetings in 1999. No member of the Board of
Directors attended fewer than 75% of the aggregate of the total number of
meetings of the Board of Directors and the total number of meetings held by
all committees of the Board of Directors on which such director served.
PROPOSAL TWO
TO APPROVE AN AMENDMENT TO THE
COMCAST CORPORATION 1996 STOCK OPTION PLAN
The Company's 1996 Stock Option Plan (the "1996 Plan") is the Company's sole
plan for awarding options to purchase shares of the Company's Class A Special
Common Stock to the Company's employees and non-employee directors. A
description of the terms of the 1996 Plan is provided below. The Company's
shareholders will vote at the meeting on a proposal to increase the maximum
aggregate number of shares for which options may be granted under the 1996
Plan from 40 million shares to 50 million shares.
Prior to April 14, 2000, the maximum number of shares of the Company's Class
A Special Common Stock for which options may be granted under the 1996 Plan
was limited to an aggregate of 40 million shares. On April 14, 2000, the
Compensation Subcommittee amended the 1996 Plan to increase the aggregate
number for which options may be granted under the 1996 Plan to 50 million
shares, subject to approval by the Company's shareholders at the 2000 Annual
Meeting of Shareholders.
Description of the 1996 Plan
The following is a summary of the material features of the 1996 Plan.
The 1996 Plan provides for the grant of options to purchase shares of the
Company's Class A Special Common Stock to employees (whether or not members of
the Board of Directors) of the Company and its parents or subsidiaries
("Affiliates") within the meaning of Sections 424(e) and (f) of the Internal
Revenue Code of 1986, as amended (the "Code"), as designated by the Company's
Board of Directors or a committee of two or more of its non-employee members
appointed by the Board of Directors, and for the grant of options to non-
employee directors of the Company. Except to the extent an option granted
under the 1996 Plan is specifically designated as a nonqualified option (as
defined below) or otherwise becomes a nonqualified option after grant, options
granted to employees of the Company or its Affiliates under the 1996 Plan are
intended to qualify as qualified stock options (sometimes hereinafter referred
to as "ISOs") within the meaning of Section 422(b) of the Code. Options
granted under the 1996 Plan to non-employee directors of the Company, options
granted to employees under the 1996 Plan which are specifically designated as
nonqualified options, and options otherwise ineligible for treatment as an ISO
are hereinafter referred to as "nonqualified options."
No Options may be granted under the 1996 Plan after March 12, 2006.
The purpose of the 1996 Plan is to assist the Company in retaining valued
employees, officers and directors by offering them a greater stake in the
Company's success and a closer identity with it, and to aid in attracting
individuals whose services would be helpful to the Company and would
contribute to its success.
28
<PAGE>
ISOs and nonqualified options are sometimes hereinafter collectively
referred to as "Options." Recipients of Options are hereinafter referred to as
"Optionees." Shares of the Company's Class A Special Common Stock are
sometimes hereinafter referred to as "Shares." Shares which may be issued upon
exercise of Options are hereinafter referred to as "Option Shares." The 1996
Plan is currently administered by the Subcommittee on Performance-Based
Compensation of the Compensation Committee of the Board of Directors. This
subcommittee, or any other committee or subcommittee of the Board of Directors
administering the 1996 Plan, is sometimes referred to, with respect to the
1996 Plan, as the "Committee."
Eligibility
All employees of the Company and its Affiliates are eligible to receive ISOs
under the 1996 Plan. All employees, officers and non-employee directors of the
Company and its Affiliates are eligible to receive nonqualified options under
the 1996 Plan. An employee may receive more than one Option under the 1996
Plan but only on the terms and subject to the restrictions of the 1996 Plan.
In determining the eligible participants to whom Options are granted under
the 1996 Plan and the number of Shares covered by such Options, the Committee
may take into account the nature of such participant's services and
responsibilities, his or her present and potential contributions to the
Company's success and such other factors as the Committee may deem relevant.
The 1996 Plan provides that the maximum number of shares of the Class A
Special Common Stock for which Options may be issued to any single individual
in any calendar year is 10 million shares, subject to adjustment as described
under "Purchase of Shares Under the 1996 Plan" below. The 1996 Plan provides
that each non-employee director of the Company shall receive a grant of
Options to purchase 5,400 shares of Class A Special Common Stock on each
February 1, except that any non-employee director first elected to the Board
of Directors after March 13, 1996, shall receive a grant of Options to
purchase 9,000 shares of Class A Special Common Stock on such newly elected
director's election date. If such election date is less than 90 days before
the next February 1, the newly-elected director shall not be entitled to
receive Options to purchase 5,400 shares on that February 1.
Shares Covered By The 1996 Plan
On April 14, 2000, the Committee amended the 1996 Plan, subject to
shareholder approval at the meeting, to provide for the grant of Options to
purchase up to an aggregate of 50 million shares of the Company's Class A
Special Common Stock. Prior to such amendment, the maximum number of shares
was 40 million. If an Option granted under the 1996 Plan expires or terminates
without having been exercised in full, the Option Shares allocable to the
unexercised portion of such Option will be available for the grant of
additional Options under the 1996 Plan, to the extent additional Options
thereunder may be granted.
Administration
The 1996 Plan provides that it will be administered by any committee or
subcommittee designated by the Board of Directors of the Company, provided it
is composed of two or more non-employee members of the Board of Directors of
the Company, each of whom is an "outside director" within the meaning of the
Code. Currently, the Subcommittee on Performance-Based Compensation of the
Compensation Committee of the Board of Directors administers the 1996 Plan.
The Committee is authorized under the 1996 Plan to determine the Optionees
to whom and the times at which the Options are granted and become exercisable.
Subject to the provisions of the 1996 Plan, the Committee also is authorized
to determine the number of Shares issuable upon exercise of each Option and
other terms and conditions of the Option. In addition, the 1996 Plan provides
that the
29
<PAGE>
Committee may determine whether an Option is intended to be an ISO. Under
certain circumstances, the Committee may have the power to accelerate or
extend the exercise date of outstanding Options. See "Amendments," "Methods of
Exercise" and "Termination" below.
The individual option document (the "Option Document") for each Option sets
forth the terms of such Option. The Option Documents are in such form as the
Committee shall from time to time approve. The interpretation and construction
by the Committee of any provision of the 1996 Plan, or of any Option Document,
is final, binding and conclusive.
Purchase of Shares Under the 1996 Plan
Under the 1996 Plan, the Committee sets forth in each Option Document the
exercise price for the Option Shares covered thereby (the "Option Price"),
provided that the Option Price of ISOs may not be less than 100% of the fair
market value of such Shares on the date or at the time that the Option is
granted. In addition, if an ISO is granted to an Optionee who then owns,
directly or by attribution under Section 424(d) of the Code, shares possessing
more than 10% of the total combined voting power of all classes of stock of
the Company or an Affiliate, the Option Price must be at least 110% of the
fair market value of such Shares on the date the Option is granted. The 1996
Plan provides that "fair market value" shall generally be determined based on
the last reported sale price of Shares on the last trading day prior to the
date on which such value is determined.
The number of Shares of Class A Special Common Stock for which Options may
be granted under the 1996 Plan, and the number of Shares of Class A Special
Common Stock issuable upon exercise of Options granted under the 1996 Plan,
and the exercise price for such Options, are subject to adjustment in the
event of a stock dividend, stock split or certain other capital adjustments.
No adjustment will be made in respect of the issuance of Shares on the
conversion of other securities of the Company that are convertible into such
class or classes of Shares.
Amendments
The Committee, with the consent of an Optionee, may amend the provisions of
Option Documents under the 1996 Plan. Under the 1996 Plan, consent of the
Optionee is not required for acceleration of the expiration date of an Option
in the event of the dissolution or liquidation of the Company or upon the
occurrence of certain other corporate transactions. See "Termination" below.
The Committee, with the consent of the Optionee, may amend the provisions of
the 1996 Plan to the extent necessary to maintain ISOs as qualified stock
options within the meaning of the Code.
The Committee may amend the 1996 Plan from time to time in such manner as it
may deem advisable. However, amendments to change the class of individuals
eligible to receive ISOs under the 1996 Plan, extend the expiration date of
the 1996 Plan, decrease the minimum Option Price of an ISO granted under the
1996 Plan or increase the maximum number of Shares for which Options may be
granted (other than as a result of adjustments in the event of a stock
dividend, stock split or certain other capital adjustments) are not effective
unless shareholder approval is obtained within twelve months before or after
such action. In addition, provisions of the 1996 Plan relating to grants of
Options to non-employee directors that determine (i) which directors are
granted Options pursuant to such provisions; (ii) the number of Shares subject
to Options granted under such provisions; (iii) the Option Price of such
Shares; and (iv) the timing of grants of Options pursuant to such provisions
may not be amended more than once every six months, other than to comport with
the Code or the Employee Retirement Income Security Act of 1974, if
applicable.
The power of the Board of Directors or the Committee to amend Option
Documents or the 1996 Plan may be subject to limitations contained in
applicable provisions of the Code and federal securities laws and regulations.
30
<PAGE>
Methods of Exercise
An Option granted under the 1996 Plan may be exercised by the Optionee only
by written notice to the Company. The notice required under the 1996 Plan must
specify the number of Shares to be purchased and must be accompanied by
payment in full of the purchase price. Payment may be made in cash, by
certified check payable to the order of the Company, or by a combination of
the foregoing. In addition, if the Committee so provides in an Option
Document, payment may be made all or in part in shares of Class A Special
Common Stock or Class A Common Stock; provided, however, that the Option
Shares may not be paid for in shares of Class A Special Common Stock or Class
A Common Stock if such method of payment would result in liability under
Section 16(b) of the Securities Exchange Act of 1934, or if the Optionee does
not own as of the date the relevant option is exercised a number of shares
held for at least six months at least equal to the number of shares used to
pay the exercise price of the Option.
There is no limitation on the number of Shares an Optionee may acquire under
the 1996 Plan in any given year through the exercise of outstanding Options,
except as may be provided by the Committee in an Option Document.
Termination
The term during which an Option may be exercised is set out in the
individual Option Document, but may not exceed (i) ten years from the date of
grant or, (ii) with respect to ISOs, five years from the date of grant if the
Optionee on the date of grant owns, directly or by attribution under Section
424(d) of the Code, shares possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of an Affiliate.
An Optionee's right to exercise any part of an Option granted pursuant to
the 1996 Plan terminates on the first to occur of: (i) expiration of the
Option term specified in the Option Document, which is subject to the
limitations described in the preceding paragraph; (ii) expiration of 90 days
from the date when the Optionee ceases to be an employee of the Company or an
Affiliate for any reason other than disability (as defined in Section 22(e)(3)
of the Code), death or a finding of the Committee that the employee has
breached his or her employment contract with, or has been engaged in any sort
of disloyalty to, or has disclosed trade secrets of, the Company or an
Affiliate, provided that the Committee may specify in an Option Document that
an Option may be exercisable during a longer period after the Optionee ceases
to be an employee, but in no event later than the expiration of the Option
term specified in the Option Document; (iii) expiration of one year from the
date the Optionee's employment with the Company or an Affiliate terminates as
a result of an Optionee's death or disability; (iv) the date set by the
Committee as an accelerated expiration date in the event of the dissolution or
liquidation of the Company or any other transaction in which an unaffiliated
third party acquires more than 50% of the voting power for election of
directors of the Company; or (v) the date of a finding by the Committee that
the Optionee has breached his or her employment contract with the Company or
an Affiliate (if such Optionee is an employee of the Company or an Affiliate),
has been engaged in any sort of disloyalty to the Company or an Affiliate,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his or her employment (if an
employee) or in the course of his or her service as a director (if a non-
employee director), or has disclosed trade secrets of the Company or an
Affiliate. In the event of such a finding by the Committee, in addition to
immediate termination of the Option, the Optionee, upon a determination by the
Committee, will forfeit all Option Shares for which the Company has not yet
delivered stock certificates representing the Option Shares, upon refund by
the Company of the exercise price of the Option.
31
<PAGE>
Transferability of Options
In general, Options granted under the 1996 Plan are not transferable by the
Optionee except by will or by the laws of descent and distribution, and,
during the lifetime of the Optionee, Options may be exercised only by the
Optionee. However, the 1996 Plan provides that the Committee may, in its
discretion, provide in an Option Document or an amendment thereto that such
Options may be transferred to members of the Optionee's immediate family, or
trusts or partnerships the sole beneficiaries or partners of which are members
of the Optionee's immediate family or the Optionee, provided that such
transfer is without consideration. Any Options so transferred will remain
subject to all conditions applicable to the Options, as set forth in the 1996
Plan or the relevant Option Documents, except that the consent of the
transferee of the Options (rather than that of the original Optionee) will be
required in order to amend the transferred Options. See "Amendments" above.
Any Option which is made transferable to the extent provided in the 1996 Plan
will be a nonqualified option.
Cash Rights
The 1996 Plan provides that the Committee may, in its sole discretion, give
an Optionee the right to receive the value of any nonqualified Option in cash
upon exercise of the Option rather than to pay the exercise price of the
Option and receive Shares. Such rights must be attached to specific Options
and are subject to the same vesting, expiration and transferability terms as
the Options to which they are attached. Options and associated cash rights may
not be exercised separately.
Withholding of Taxes
Whenever the Company is required to deliver or transfer Shares of Class A
Special Common Stock in connection with the exercise of an Option under the
1996 Plan, the Company has the right to require the Optionee to remit or
otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such shares or to take
whatever action it deems necessary to protect its interests with respect to
tax liabilities in connection with the issuance of such shares.
Under the 1996 Plan, tax liabilities incurred in connection with the
exercise of an Option will be satisfied by the Company's withholding a portion
of the Option Shares underlying the Option that have a fair market value
approximately equal to the minimum amount of taxes required to be withheld by
the Company under applicable law, unless otherwise determined by the Committee
with respect to any Optionee. However, the Committee may permit an Optionee to
elect to have taxes withheld in excess of the minimum amount required to be
withheld by the Company (provided the Optionee certifies at the time of such
election that he or she has held for at least six months a number of Shares at
least equal to the number of all Option Shares withheld in excess of the
minimum amount), or to pay to the Company in cash all or a portion of the
taxes to be withheld upon the exercise of an Option. The Committee may add
such other requirements and limitations regarding these elections as it deems
appropriate.
Federal Income Taxation
The following discussion is intended to point out the general principles of
current federal income tax law applicable to the Options issued under the 1996
Plan.
Incentive Stock Options. For the purposes of the regular income tax
currently imposed under the Code, the holder of an Option under the 1996 Plan
which is an ISO will not recognize taxable income upon either the grant or
exercise of the Option.
The Optionee will recognize long-term capital gain or loss on a disposition
of the Option Shares acquired upon exercise of an ISO provided the Optionee
does not dispose of the Option Shares within
32
<PAGE>
two years from the date the ISO was granted and within one year after the
Option Shares were transferred to the Optionee. For purposes of determining
such gain or loss, the Optionee's basis in such Shares will, in general, be
the Optionee's Option Price. Under present law, long-term capital gain is
subject to an effective tax rate of 20%, while ordinary income may be taxed at
a maximum effective rate of 39.6%. If the Optionee satisfies both of the
holding periods described above, then the Company will not be allowed a
deduction by reason of the exercise of the ISO.
The amount, if any, by which the fair market value of an Option Share at the
time of exercise (determined without regard to certain transfer restrictions)
exceeds the Option Price will be included in the computation of the Optionee's
"alternative minimum taxable income," generally in the year he or she
exercises the ISO, for purposes of the "alternative minimum tax" imposed by
Section 55 of the Code. If an Optionee pays alternative minimum tax, the
amount of such tax paid that is attributable to the exercise of ISOs will be
allowed as a credit against regular tax liability in subsequent years in which
the Optionee's regular tax liability (reduced by certain other tax credits)
exceeds his or her alternative minimum tax. Further, the Optionee's basis in
Option Shares acquired through exercise of an ISO will, for alternative
minimum tax purposes, equal the fair market value of the Option Shares taken
into account in determining the Optionee's alternative minimum taxable income.
As a general rule, if the Optionee disposes of the Option Shares before
satisfying the holding period requirements discussed above (a "disqualifying
disposition"), his or her gain recognized on the disqualifying disposition
will be taxed as ordinary income to the extent of the difference between the
fair market value of the Option Shares on the date of exercise and the
adjusted basis of the Option Shares (or, in certain cases, the excess of the
amount realized on disposition over the adjusted basis, if such excess is less
than the amount arrived at by the former calculation), and the Company will be
entitled to a deduction in that amount.
The gain (if any) in excess of the amount recognized as ordinary income on a
disqualifying disposition will be long-term or short-term capital gain,
depending upon the length of time the recipient held the Option Shares prior
to the disposition.
Optionees may be permitted to exercise ISOs by transferring to the Company
shares of the Company's Class A Special Common Stock or Class A Common Stock
then held by the Optionee ("Prior Shares") having a market value equal to the
Option Price of the Shares to be purchased (see "Methods of Exercise" above).
If the Optionee acquired the Prior Shares by exercise of an ISO and the
Optionee has not satisfied the holding period requirements described above for
the Prior Shares, then the transfer will be treated as a disqualifying
disposition by the Optionee of the Prior Shares. However, if the Optionee did
not acquire the Prior Shares by exercise of an ISO or if the Optionee has
satisfied the holding period requirements applicable to the Prior Shares, then
the Optionee will not recognize gain or loss upon the exchange. In that case,
the Optionee's basis and holding period (for purposes other than the Option
holding period rules) in the Prior Shares will carry over to a corresponding
number of Option Shares received. The Optionee's basis in any additional
Option Shares received will be zero and his or her holding period will begin
on the date the Optionee becomes the owner of such Shares.
If an Option granted under the 1996 Plan which is intended to be an ISO
fails to qualify as such under applicable rules and regulations of the Code,
such Option will be subject to the general principles of Federal income tax
law discussed below with respect to nonqualified options.
Nonqualified Options. For Federal income tax purposes, the holder of an
option that is not an ISO (a "nonqualified option") will not recognize taxable
income at the time of grant, and the Company will not be allowed a deduction
by reason of the grant of a nonqualified option. The Optionee will in general
recognize ordinary income upon exercise of the nonqualified option, in an
amount equal to the excess of the fair market value of the Option Shares
received at the time of exercise (including Option
33
<PAGE>
Shares withheld by the Company to satisfy tax withholding obligations) over
the exercise price of the nonqualified option, and the Company will be allowed
a deduction in that amount.
Upon disposition of the Option Shares, the Optionee will recognize long-term
or short-term capital gain or loss, depending upon the length of time he or
she held the Option Shares prior to disposition. The amount of long-term or
short-term capital gain or loss recognized by the Optionee upon disposition of
the Option Shares will be an amount equal to the difference between the amount
realized on the disposition and the Optionee's basis in the Option Shares
(which basis is ordinarily the fair market value of the Option Shares on the
date the Option was exercised).
Optionees may be permitted to exercise nonqualified options by transferring
to the Company shares having a market value equal to the Option Price of the
Shares to be purchased (see "Methods of Exercise" above). In that case, no
income will be recognized on the receipt of a corresponding number of Option
Shares, and the Optionee's basis and holding period in the Prior Shares will
carry over to the corresponding number of Option Shares received. The
Optionee's basis in such additional Option Shares received will equal the
amount includable in the Optionee's income and his or her holding period will
begin on the date the Optionee becomes the owner of such shares.
Certain Optionees may be permitted to transfer nonqualified options to
members of their immediate family, or certain trusts or partnerships, without
consideration. See "Transferability of Options" above. In the case of any
nonqualified option so transferred, the original Optionee will recognize
income upon the exercise of the option by the transferee to the same extent as
if the original Optionee had exercised the option, and the Company's
concurrent deduction will also be the same. The transferee's basis and holding
period in the stock received upon exercise of the transferred option will be
the same basis and holding period as would have applied had the original
Optionee exercised the option in the same manner used by the transferee to
exercise the option.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE AMENDMENT TO THE COMCAST CORPORATION 1996 STOCK OPTION PLAN.
PROPOSAL THREE
TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval by the shareholders, the Board of Directors, upon the
recommendation of the Audit Committee, has appointed the firm of Deloitte &
Touche LLP, which served as the Company's independent auditors for the last
fiscal year, to serve as the Company's independent auditors with respect to
the consolidated financial statements of the Company and its subsidiaries for
the current fiscal year.
A representative of Deloitte & Touche LLP is expected to be present at the
meeting and will have the opportunity to make a statement if he or she desires
to do so. The representative is also expected to be available to respond to
appropriate questions of shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE ABOVE PROPOSAL.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual Meeting of
Shareholders in 2001 must be received by January 15, 2001 in order to be
considered for inclusion in the Company's proxy
34
<PAGE>
statement and form of proxy relating to that meeting. Shareholder proposals
should be directed to Stanley L. Wang, Executive Vice President and Secretary,
at the address of the Company set forth on the first page of this Proxy
Statement. Notwithstanding the foregoing, shareholders with suggestions on the
nomination of directors must comply with the procedures set forth under the
caption "Committees and Meetings of the Board of Directors."
A shareholder may wish to have a proposal presented at the Annual Meeting of
Shareholders in 2001, but not to have such proposal included in the Company's
proxy statement and form of proxy relating to that meeting. Pursuant to
Section 2-9 of the Company's by-laws, notice of any such proposal must be
received by the Company between March 24, 2001 and April 23, 2001. If it is
not received during this period, such proposal shall be deemed "untimely" for
purposes of Rule 14a-4(c) under the Exchange Act, and, therefore, the proxies
will have the right to exercise discretionary voting authority with respect to
such proposal. Any such proposal should be directed to Stanley L. Wang,
Executive Vice President and Secretary, at the address of the Company set
forth on the first page of this Proxy Statement.
SOLICITATION OF PROXIES
The accompanying form of proxy is being solicited on behalf of the Board of
Directors of the Company. The expenses of solicitation of proxies for the
meeting will be paid by the Company. In addition to the mailing of the proxy
material, such solicitation may be made in person or by telephone or telegraph
by directors, officers or regular employees of the Company or its
subsidiaries.
ANNUAL REPORT ON FORM 10-K
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS
PROXY STATEMENT, ON THE WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR
ITS MOST RECENT FISCAL YEAR. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO
"INVESTOR RELATIONS" AT THE ADDRESS OF THE COMPANY SET FORTH ON THE FIRST PAGE
OF THIS PROXY STATEMENT.
35
<PAGE>
Annex A
[PROXY]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF COMCAST CORPORATION
The undersigned, a holder of Class A Common Stock of COMCAST CORPORATION (the
"Company"), hereby constitutes and appoints RALPH J. ROBERTS and STANLEY L.
WANG, and each of them acting individually, as the attorney and proxy of the
undersigned, with full power of substitution, for and in the name and stead of
the undersigned, to attend the Annual Meeting of Shareholders of the Company to
be held on Thursday, June 22, 2000 at 9:00 a.m. local time at the offices of the
Company, 1500 Market Street, West Tower, 9th Floor, Philadelphia, Pennsylvania,
and any adjournment or postponement thereof, and thereat to vote all shares of
Class A Common Stock which the undersigned would be entitled to vote if
personally present, as follows:
Unless otherwise specified, the shares will be voted "FOR" the election of
all nine nominees for director and "FOR" the other proposals set forth on the
reverse side. This Proxy also delegates discretionary authority to vote with
respect to any other business which may properly come before the meeting and any
adjournment or postponement thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING,
PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K OF COMCAST CORPORATION.
(Continued and to be dated and signed on the reverse side)
<PAGE>
If Casting Votes By Mail, Detach Here and Return Properly Executed Proxy Card in
Enclosed Postage-Prepaid Envelope
[logo of Comcast Corporation appears here] Comcast Corporation
P.O. Box 11059
New York, N.Y. 10203-0059
_______________________________
CONTROL NUMBER
FOR INTERNET VOTING
_______________________________
VOTE BY INTERNET
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET MAIL
http://www.eproxyvote.com/cmcsa Mark, sign and date your
proxy card and return it in the
postage-paid envelope we have
Use the Internet to vote your proxy. provided.
Have your proxy card in hand when If you have submitted your proxy
you access the website. You by the Internet there is no need for
will be prompted to you to mail back your proxy.
enter your control number,
located in the box above, to create
an electronic ballot.
Your Internet vote authorizes the named
proxies to vote your shares in the same
manner as if you marked, signed
and returned the proxy card.
You can vote via the Internet anytime prior to 5:00 p.m. eastern time
on June 21, 2000.
1. Election of nine Directors
[ ] FOR
[ ] WITHHELD
EXCEPT WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S)
WHOSE NAME(S) IS (ARE) LINED THROUGH. 01-Ralph J. Roberts, 02-Julian A. Brodsky,
03-Brian L. Roberts, 04-Gustave G. Amsterdam, 05-Sheldon M. Bonovitz, 06-Joseph
L. Castle, II, 07-Bernard C. Watson, 08-Irving A. Wechsler, and 09-Anne Wexler.
<PAGE>
2. To approve an amendment to the Comcast Corporation 1996 Stock Option
Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To vote on such other business which may properly come before the
meeting.
The signer hereby revokes all previous proxies given by the signer to vote at
the Annual Meeting or any adjournments thereof.
Change of Address and/or Comments mark here [ ]
NOTE: Please sign this Proxy exactly as name(s) appear(s) in address. When
signing as attorney-in-fact, executor, administrator, trustee or guardian,
please add your title as such, and if signer is a corporation, please sign with
full corporate name by duly authorized officer or officers and affix the
corporate seal. When stock is issued in the name of two or more persons, all
such persons should sign.
_________________________________
_________________________________
SIGNATURE(S) DATE
<PAGE>
Annex B
-------
COMCAST CORPORATION
1996 STOCK OPTION PLAN
----------------------
(As Amended and Restated, Effective April 14, 2000)
1. Purpose of Plan
The purpose of the Plan is to assist the Company in retaining valued
employees, officers and directors by offering them a greater stake in the
Company's success and a closer identity with it, and to aid in attracting
individuals whose services would be helpful to the Company and would contribute
to its success.
2. Definitions
(a) "Affiliate" means, with respect to any Person, any other
---------
Person that, directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. For purposes of this definition, the
term "control," including its correlative terms "controlled by" and "under
common control with," mean, with respect to any Person, the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
(b) "Board" means the board of directors of the Sponsor.
-----
(c) "Cash Right" means any right to receive cash in lieu of
----------
Shares granted under the Plan and described in Paragraph 3(a)(iii).
(d) "Cause" means:
-----
(i) for an employee of a Company, a finding by the
Committee, after full consideration of the facts presented on behalf of
both the Company and the employee, that the employee has breached his
employment contract with a Company, has disclosed trade secrets of a
Company or has been engaged in any sort of disloyalty to a Company,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his employment.
(ii) for a Non-Employee Director, a finding by the
Committee, after full consideration of the facts presented on behalf of
both the Company and the Director, that such Non-Employee Director has
disclosed trade secrets of a Company, or has been engaged in any sort of
disloyalty to a Company, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the
course of his service as a Non-Employee Director.
<PAGE>
(e) "Change of Control" means any transaction or series of
-----------------
transactions as a result of which any Person who was a Third Party immediately
before such transaction or series of transactions owns then-outstanding
securities of the Sponsor having more than 50 percent of the voting power for
the election of directors of the Sponsor.
(f) "Code" means the Internal Revenue Code of 1986, as amended.
----
(g) "Comcast Plan" means any restricted stock, stock bonus,
------------
stock option or other compensation plan, program or arrangement established or
maintained by the Company or an Affiliate, including but not limited to this
Plan, the Comcast Corporation 1997 Deferred Stock Option Plan, the Comcast
Corporation 1990 Restricted Stock Plan and the Comcast Corporation 1987 Stock
Option Plan.
(h) "Committee" means the committee described in Paragraph 5.
---------
(i) "Common Stock" means the Sponsor's Class A Special Common
------------
Stock, par value, $1.00.
(j) "Company" means the Sponsor and each of the Parent Companies
-------
and Subsidiary Companies.
(k) "Date of Grant" means the date as of which an Option is
-------------
granted.
(l) "Disability" means a disability within the meaning of
----------
section 22(e)(3) of the Code.
(m) "Election Date" means the date on which an individual is
-------------
first elected to the Board as a Non-Employee Director, or is elected to the
Board as a Non-Employee Director following a period of one year or more during
which such individual was not a member of the Board.
(n) "Fair Market Value." If Shares are listed on a stock
-----------------
exchange, Fair Market Value shall be determined based on the last reported sale
price of a Share on the principal exchange on which Shares are listed on the
last trading day prior to the date of determination, or, if Shares are not so
listed, but trades of Shares are reported on the Nasdaq National Market, the
last quoted sale price of a Share on the Nasdaq National Market on the last
trading day prior to the date of determination.
(o) "Grant Date" means each February 1st after the date of
----------
adoption of the Plan by the Board.
-2-
<PAGE>
(p) "Immediate Family" means an Optionee's spouse and lineal
----------------
descendants, any trust all beneficiaries of which are any of such persons and
any partnership all partners of which are any of such persons.
(q) "Incentive Stock Option" means an Option granted under the
----------------------
Plan, designated by the Committee at the time of such grant as an Incentive
Stock Option within the meaning of section 422 of the Code and containing the
terms specified herein for Incentive Stock Options; provided, however, that to
-----------------
the extent an Option granted under the Plan and designated by the Committee at
the time of grant as an Incentive Stock Option fails to satisfy the requirements
for an incentive stock option under section 422 of the Code for any reason, such
Option shall be treated as a Non-Qualified Option.
(r) "Non-Employee Director" means an individual who is a member
---------------------
of the Board, and who is not an employee of a Company, including an individual
who is a member of the Board and who previously was an employee of a Company.
(s) "Non-Qualified Option" means:
--------------------
(i) an Option granted under the Plan, designated by
the Committee at the time of such grant as a Non-Qualified Option and
containing the terms specified herein for Non-Qualified Options; and
(ii) an Option granted under the Plan and designated by
the Committee at the time of grant as an Incentive Stock Option, to the
extent such Option fails to satisfy the requirements for an incentive stock
option under section 422 of the Code for any reason.
(t) "Option" means any stock option granted under the Plan and
------
described in either Paragraph 3(a)(i) or Paragraph 3(a)(ii).
(u) "Optionee" means a person to whom an Option has been granted
--------
under the Plan, which Option has not been exercised in full and has not expired
or terminated.
(v) "Other Available Shares" means, as of any date, the excess,
----------------------
if any of:
(i) the total number of Shares owned by an Optionee; over
(ii) the sum of:
(a) the number of Shares owned by such Optionee for
less than six months; plus
-3-
<PAGE>
(b) the number of Shares owned by such Optionee that
has, within the preceding six months, been the
subject of a withholding certification pursuant to
Paragraph 16(b) or any similar withholding
certification under any other Comcast Plan; plus
(c) the number of Shares owned by such Optionee that
has, within the preceding six months, been
received in exchange for Shares surrendered as
payment, in full or in part, of the exercise price
for an option to purchase any securities of the
Sponsor or an Affiliate under any Comcast Plan,
but only to the extent of the number of Shares
surrendered; plus
(d) The number of Shares owned by such Optionee as to
which evidence of ownership has, within the
preceding six months, been provided to the Company
in connection with the crediting of "Deferred
Stock Units" to such Optionee's Account under the
Comcast Corporation 1997 Deferred Stock Option
Plan.
For purposes of this Paragraph 2(v), a Share that is subject to a deferral
election pursuant to another Comcast Plan shall not be treated as owned by an
Optionee until all conditions to the delivery of such Share have lapsed. For
purposes of Paragraphs 7(d), 8(d) and 16(b), the number of Other Available
Shares shall be determined separately for the Sponsor's Class A Special Common
Stock, par value, $1.00, and for the Sponsor's Class A Common Stock, par value,
$1.00.
(w) "Outside Director" means a member of the Board who is an
----------------
"outside director" within the meaning of section 162(m)(4)(C) of the Code and
applicable Treasury Regulations issued thereunder.
(x) "Parent Company" means all corporations that, at the time in
--------------
question, are parent corporations of the Sponsor within the meaning of section
424(e) of the Code.
(y) "Person" means an individual, a corporation, a partnership,
------
an association, a trust or any other entity or organization.
(z) "Plan" means the Comcast Corporation 1996 Stock Option Plan.
----
-4-
<PAGE>
(aa) "Roberts Family." Each of the following is a member of the
--------------
Roberts Family:
(i) Brian L. Roberts;
(ii) a lineal descendant of Brian L. Roberts; or
(iii) a trust established for the benefit of any of Brian
L. Roberts and/or a lineal descendant or descendants of Brian L. Roberts.
(bb) "Share" or "Shares" means:
----- ------
(i) for all purposes of the Plan, a share or shares of
Common Stock or such other securities issued by the Sponsor as may be the
subject of an adjustment under Paragraph 11.
(ii) solely for purposes of Paragraphs 2(n), 2(v),
7(d), 8(d) and 16(b), the term "Share" or "Shares" also means a share or
shares of the Sponsor's Class A Common Stock, par value, $1.00.
(cc) "Sponsor" means Comcast Corporation, a Pennsylvania
-------
corporation, including any successor thereto by merger, consolidation,
acquisition of all or substantially all the assets thereof, or otherwise.
(dd) "Subsidiary Companies" means all corporations that, at the
--------------------
time in question, are subsidiary corporations of the Sponsor within the meaning
of section 424(f) of the Code.
(ee) "Ten Percent Shareholder" means a person who on the Date of
-----------------------
Grant owns, either directly or within the meaning of the attribution rules
contained in section 424(d) of the Code, stock possessing more than 10% of the
total combined voting power of all classes of stock of his employer corporation
or of its parent or subsidiary corporations, as defined respectively in sections
424(e) and (f) of the Code, provided that the employer corporation is a Company.
(ff) "Terminating Event" means any of the following events:
-----------------
(i) the liquidation of the Sponsor; or
(ii) a Change of Control.
-5-
<PAGE>
(gg) "Third Party" means any Person other than a Company,
-----------
together with such Person's Affiliates, provided that the term "Third Party"
shall not include the Sponsor, an Affiliate of the Sponsor or any member or
members of the Roberts Family.
(hh) "1933 Act" means the Securities Act of 1933, as amended.
--------
(ii) "1934 Act" means the Securities Exchange Act of 1934, as
--------
amended.
3. Rights To Be Granted
(a) Types of Options and Other Rights Available for Grant.
-----------------------------------------------------
Rights that may be granted under the Plan are:
(i) Incentive Stock Options, which give an Optionee
who is an employee of a Company the right for a specified time period to
purchase a specified number of Shares for a price not less than the Fair
Market Value on the Date of Grant;
(ii) Non-Qualified Options, which give the Optionee
the right for a specified time period to purchase a specified number of
Shares for a price determined by the Committee; and
(iii) Cash Rights, which give an Optionee the right
for a specified time period, and subject to such conditions, if any, as
shall be determined by the Committee and stated in the option document, to
receive a cash payment of such amount per Share as shall be determined by
the Committee and stated in the option document, in lieu of exercising a
Non-Qualified Option.
(b) Limit on Grant of Options. The maximum number of Shares for
-------------------------
which Options may be granted to any single individual in any calendar year,
adjusted as provided in Paragraph 11, shall be 10,000,000 Shares.
(c) Presumption of Incentive Stock Option Status. Each Option
--------------------------------------------
granted under the Plan to an employee of a Company is intended to be an
Incentive Stock Option, except to the extent any such grant would exceed the
limitation of Paragraph 9 and except for any Option specifically designated at
the time of grant as an Option that is not an Incentive Stock Option.
4. Shares Subject to Plan
Subject to adjustment as provided in Paragraph 11, not more than
50,000,000 Shares in the aggregate may be issued pursuant to the Plan upon
exercise of Options. Shares
-6-
<PAGE>
delivered pursuant to the exercise of an Option may, at the Sponsor's option, be
either treasury Shares or Shares originally issued for such purpose. If an
Option covering Shares terminates or expires without having been exercised in
full, other Options may be granted covering the Shares as to which the Option
terminated or expired.
5. Administration of Plan
(a) Committee. The Plan shall be administered by the
---------
Subcommittee on Performance Based Compensation of the Compensation Committee of
the Board or any other committee or subcommittee designated by the Board,
provided that the committee administering the Plan is composed of two or more
non-employee members of the Board, each of whom is an Outside Director.
Notwithstanding the foregoing, if Non-Employee Directors are granted Options in
accordance with the provisions of Paragraph 8, the directors to whom such
Options will be granted, the timing of grants of such Options, the Option Price
of such Options and the number of Option Shares included in such Options shall
be as specifically set forth in Paragraph 8. No member of the Committee shall
participate in the resolution of any issue that exclusively involves an Option
granted to such member.
(b) Meetings. The Committee shall hold meetings at such times
--------
and places as it may determine. Acts approved at a meeting by a majority of the
members of the Committee or acts approved in writing by the unanimous consent of
the members of the Committee shall be the valid acts of the Committee.
(c) Exculpation. No member of the Committee shall be personally
-----------
liable for monetary damages for any action taken or any failure to take any
action in connection with the administration of the Plan or the granting of
Options thereunder unless (i) the member of the Committee has breached or failed
to perform the duties of his office, and (ii) the breach or failure to perform
constitutes self-dealing, wilful misconduct or recklessness; provided, however,
-----------------
that the provisions of this Paragraph 5(c) shall not apply to the responsibility
or liability of a member of the Committee pursuant to any criminal statute.
(d) Indemnification. Service on the Committee shall constitute
---------------
service as a member of the Board. Each member of the Committee shall be
entitled without further act on his part to indemnity from the Sponsor to the
fullest extent provided by applicable law and the Sponsor's By-laws in
connection with or arising out of any actions, suit or proceeding with respect
to the administration of the Plan or the granting of Options thereunder in which
he may be involved by reasons of his being or having been a member of the
Committee, whether or not he continues to be such member of the Committee at the
time of the action, suit or proceeding.
-7-
<PAGE>
6. Eligibility
(a) Eligible individuals to whom Options may be granted shall be
employees, officers or directors of a Company who are selected by the Committee
for the grant of Options. Eligible individuals to whom Cash Rights may be
granted shall be individuals who are employees of a Company on the Date of
Grant. The terms and conditions of Options granted to individuals other than
Non-Employee Directors shall be determined by the Committee, subject to
Paragraph 7. The terms and conditions of Cash Rights shall be determined by the
Committee, subject to Paragraph 7. The terms and conditions of Options granted
to Non-Employee Directors shall be determined by the Committee, subject to
Paragraph 8.
(b) An Incentive Stock Option shall not be granted to a Ten
Percent Shareholder except on such terms concerning the option price and term as
are provided in Paragraph 7(b) and 7(g) with respect to such a person. An Option
designated as Incentive Stock Option granted to a Ten Percent Shareholder but
which does not comply with the requirements of the preceding sentence shall be
treated as a Non-Qualified Option. An Option designated as an Incentive Stock
Option shall be treated as a Non-Qualified Option if (i) the Optionee is not an
employee of a Company on the Date of Grant or (ii) the only Company by which the
Optionee is employed on the Date of Grant is an entity described in Paragraph
2(dd)(ii).
7. Option Documents and Terms - In General
All Options granted to Optionees other than Non-Employee Directors
shall be evidenced by option documents. The terms of each such option document
shall be determined from time to time by the Committee, consistent, however,
with the following:
(a) Time of Grant. All Options shall be granted within 10 years
-------------
from the earlier of (i) the date of adoption of the Plan by the Board, or (ii)
approval of the Plan by the shareholders of the Sponsor.
(b) Option Price. The option price per Share with respect to any
------------
Option shall be determined by the Committee, provided, however, that with
-----------------
respect to any Incentive Stock Options, the option price per share shall not be
less than 100% of the Fair Market Value of such Share on the Date of Grant, and
provided further that with respect to any Incentive Stock Options granted to a
- ----------------
Ten Percent Shareholder, the option price per Share shall not be less than 110%
of the Fair Market Value of such Share on the Date of Grant.
(c) Restrictions on Transferability. No Option granted under
-------------------------------
this Paragraph 7 shall be transferable otherwise than by will or the laws of
descent and distribution and, during the lifetime of the Optionee, shall be
exercisable only by him or for his benefit by his attorney-in-fact or guardian;
provided that the Committee may, in its discretion, at the time of grant of a
- -------------
Non-Qualified Option or by amendment of an option document for an Incentive
Stock Option or a Non-Qualified Option, provide that Options granted to or held
by an Optionee may
-8-
<PAGE>
be transferred, in whole or in part, to one or more transferees and exercised by
any such transferee; provided further that (i) any such transfer is without
---------------------
consideration and (ii) each transferee is a member of such Optionee's Immediate
Family; and provided further that any Incentive Stock Option granted pursuant to
---------------------
an option document which is amended to permit transfers during the lifetime of
the Optionee shall, upon the effectiveness of such amendment, be treated
thereafter as a Non-Qualified Option. No transfer of an Option shall be
effective unless the Committee is notified of the terms and conditions of the
transfer and the Committee determines that the transfer complies with the
requirements for transfers of Options under the Plan and the option document.
Any person to whom an Option has been transferred may exercise any Options only
in accordance with the provisions of Paragraph 7(g) and this Paragraph 7(c).
(d) Payment Upon Exercise of Options. Full payment for Shares
--------------------------------
purchased upon the exercise of an Option shall be made in cash, by certified
check payable to the order of the Sponsor, or, at the election of the Optionee
and as the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value equal to the aggregate option price,
or by delivering such combination of Shares and cash as the Committee may, in
its sole discretion, approve; provided, however, that Shares may be surrendered
-----------------
in satisfaction of the option price only if the Optionee certifies in writing to
the Sponsor that the Optionee owns a number of Other Available Shares as of the
date the Option is exercised that is at least equal to the number of Shares to
be surrendered in satisfaction of the Option Price; provided further, however,
----------------
that the option price may not be paid in Shares if the Committee determines that
such method of payment would result in liability under section 16(b) of the 1934
Act to an Optionee. Except as otherwise provided by the Committee, if payment
is made in whole or in part in Shares, the Optionee shall deliver to the Sponsor
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having a Fair Market Value on the date of
delivery that is not greater than the option price accompanied by stock powers
duly endorsed in blank by the record holder of the Shares represented by such
certificates. If the Committee, in its sole discretion, should refuse to accept
Shares in payment of the option price, any certificates representing Shares
which were delivered to the Sponsor shall be returned to the Optionee with
notice of the refusal of the Committee to accept such Shares in payment of the
option price. The Committee may impose such limitations and prohibitions on the
use of Shares to exercise an Option as it deems appropriate.
(e) Issuance of Certificate Upon Exercise of Options; Payment of
------------------------------------------------------------
Cash. Only whole Shares shall be issuable upon exercise of Options. Any right to
- ----
a fractional Share shall be satisfied in cash. Upon satisfaction of the
conditions of Paragraph 10, a certificate for the number of whole Shares and a
check for the Fair Market Value on the date of exercise of any fractional Share
to which the Optionee is entitled shall be delivered to such Optionee by the
Sponsor.
-9-
<PAGE>
(f) Termination of Employment. For purposes of the Plan, a
-------------------------
transfer of an employee between two employers, each of which is a Company, shall
not be deemed a termination of employment. For purposes of Paragraph 7(g), an
Optionee's termination of employment shall be deemed to occur on the date an
Optionee ceases to serve as an active employee of a Company, as determined by
the Committee in its sole discretion, or, if the Optionee is a party to an
employment agreement with a Company, on the effective date of the Optionee's
termination of employment as determined under such agreement.
(g) Periods of Exercise of Options. An Option shall be
------------------------------
exercisable in whole or in part at such time or times as may be determined by
the Committee and stated in the option document, provided, however, that if the
grant of an Option would be subject to section 16(b) of the 1934 Act, unless the
requirements for exemption therefrom in Rule 16b-3(c)(1), under such Act, or any
successor provision, are met, the option document for such Option shall provide
that such Option is not exercisable until not less than six months have elapsed
from the Date of Grant. Except as otherwise provided by the Committee in its
discretion, no Option shall first become exercisable following an Optionee's
termination of employment for any reason; provided further, that:
(i) In the event that an Optionee terminates employment
with the Company for any reason other than death or Cause, any Option
held by such Optionee and which is then exercisable shall be
exercisable for a period of 90 days following the date the Optionee
terminates employment with the Company (unless a longer period is
established by the Committee); provided, however, that if such
termination of employment with the Company is due to the Disability of
the Optionee, he shall have the right to exercise those of his Options
which are then exercisable for a period of one year following such
termination of employment (unless a longer period is established by
the Committee); provided, however, that in no event shall an Incentive
Stock Option be exercisable after five years from the Date of Grant in
the case of a grant to a Ten Percent Shareholder, nor shall any other
Option be exercisable after ten years from the Date of Grant.
(ii) In the event that an Optionee terminates employment
with the Company by reason of his death, any Option held at death by
such Optionee which is then exercisable shall be exercisable for a
period of one year from the date of death (unless a longer period is
established by the Committee) by the person to whom the rights of the
Optionee shall have passed by will or by the laws of descent and
distribution; provided, however, that in no event shall an Incentive
-----------------
Stock Option be exercisable after five years from the Date of Grant in
the case of a grant to a Ten Percent Shareholder, nor shall any other
Option be exercisable after ten years from the Date of Grant.
-10-
<PAGE>
(iii) In the event that an Optionee's employment with the
Company is terminated for Cause, each unexercised Option held by such
Optionee shall terminate and cease to be exercisable; provided
--------
further, that in such event, in addition to immediate termination of
the Option, the Optionee, upon a determination by the Committee shall
automatically forfeit all Shares otherwise subject to delivery upon
exercise of an Option but for which the Sponsor has not yet delivered
the Share certificates, upon refund by the Sponsor of the option
price.
(h) Date of Exercise. The date of exercise of an Option shall be
----------------
the date on which written notice of exercise, addressed to the Sponsor at its
main office to the attention of its Secretary, is hand delivered, telecopied or
mailed first class postage prepaid; provided, however, that the Sponsor shall
-----------------
not be obligated to deliver any certificates for Shares pursuant to the exercise
of an Option until the Optionee shall have made payment in full of the option
price for such Shares. Each such exercise shall be irrevocable when given. Each
notice of exercise must (i) specify the Incentive Stock Option, Non-Qualified
Option or combination thereof being exercised; and (ii) include a statement of
preference (which shall binding on and irrevocable by the Optionee but shall not
be binding on the Committee) as to the manner in which payment to the Sponsor
shall be made (Shares or cash or a combination of Shares and cash). Each notice
of exercise shall also comply with the requirements of Paragraph 15.
(i) Cash Rights. The Committee may, in its sole discretion,
-----------
provide in an option document for an eligible Optionee that Cash Rights shall be
attached to Non-Qualified Options granted under the Plan. All Cash Rights that
are attached to Non-Qualified Options shall be subject to the following terms:
(i) Such Cash Right shall expire no later than the Non-
Qualified Option to which it is attached.
(ii) Such Cash Right shall provide for the cash payment of
such amount per Share as shall be determined by the Committee and stated in
the option document.
(iii) Such Cash Right shall be subject to the same
restrictions on transferability as the Non-Qualified Option to which it is
attached.
(iv) Such Cash Right shall be exercisable only when such
conditions to exercise as shall be determined by the Committee and stated
in the option document, if any, have been satisfied.
(v) Such Cash Right shall expire upon the exercise of the
Non-Qualified Option to which it is attached.
-11-
<PAGE>
(vi) Upon exercise of a Cash Right that is attached to a
Non-Qualified Option, the Option to which the Cash Right is attached shall
expire.
8. Option Documents and Terms - Non-Employee Directors
Options granted pursuant to the Plan to Non-Employee Directors shall
be granted, without any further action by the Committee, in accordance with the
terms and conditions set forth in this Paragraph 8. Options granted pursuant to
Paragraph 8(a) shall be evidenced by option documents. The terms of each such
option document shall be consistent with Paragraphs 8(b) through 8(g), as
follows:
(a) Grant of Options to Non-Employee Directors. Each Non-
------------------------------------------
Employee Director shall be granted, commencing on the Grant Date next following
the adoption of this Plan by the Board and on each successive Grant Date
thereafter, a Non-Qualified Option to purchase 5,400 Shares. Notwithstanding the
preceding sentence, each newly elected Non-Employee Director:
(i) shall be granted a Non-Qualified Option to purchase
9,000 Shares on the Election Date; and
(ii) shall not be entitled to the grant of an Option
hereunder on the Grant Date immediately following the Non-Employee
Director's Election Date if such Election Date is within ninety (90) days
of the Grant Date.
(b) Option Price. The option price per Share with respect to any
------------
Option granted under this Paragraph 8 shall be 100% of the Fair Market Value of
such Share on the Grant Date.
(c) Restrictions on Transferability. No Option granted under
-------------------------------
this Paragraph 8 shall be transferable otherwise than by will or the laws of
descent and distribution and, during the lifetime of the Optionee, shall be
exercisable only by him or for his benefit by his attorney-in-fact or guardian;
provided that the Committee may, in its discretion, at the time of grant of an
- -------------
Option or by amendment of an option document for an Option, provide that Options
may be transferred, in whole or in part, to one or more transferees and
exercised by any such transferee; provided further that (i) any such transfer is
---------------------
without consideration, and (ii) each transferee is a member of such Optionee's
Immediate Family. No transfer of an Option shall be effective unless the
Committee is notified of the terms and conditions of the transfer and the
Committee determines that the transfer complies with the requirements for
transfers of Options under the Plan and the option document. Any person to whom
an Option has been transferred may exercise any Options only in accordance with
the provisions of Paragraph 8(f) and this Paragraph 8(c).
-12-
<PAGE>
(d) Payment Upon Exercise of Options. Full payment for Shares
--------------------------------
purchased upon the exercise of an Option shall be made in cash, by certified
check payable to the order of the Sponsor, or, at the election of the Optionee
and as the Committee may, in its sole discretion, approve, by surrendering
Shares with an aggregate Fair Market Value equal to the aggregate option price,
or by delivering such combination of Shares and cash as the Committee may, in
its sole discretion, approve; provided, however, that Shares may be surrendered
-----------------
in satisfaction of the option price only if the Optionee certifies in writing to
the Sponsor that the Optionee owns a number of Other Available Shares as of the
date the Option is exercised that is at least equal to the number of Shares to
be surrendered in satisfaction of the Option Price; provided further, however,
----------------
that the option price may not be paid in Shares if the Committee determines that
such method of payment would result in liability under section 16(b) of the 1934
Act to an Optionee. Except as otherwise provided by the Committee, if payment
is made in whole or in part in Shares, the Optionee shall deliver to the Sponsor
certificates registered in the name of such Optionee representing Shares legally
and beneficially owned by such Optionee, free of all liens, claims and
encumbrances of every kind and having a Fair Market Value on the date of
delivery that is not greater than the option price accompanied by stock powers
duly endorsed in blank by the record holder of the Shares represented by such
certificates. If the Committee, in its sole discretion, should refuse to accept
Shares in payment of the option price, any certificates representing Shares
which were delivered to the Sponsor shall be returned to the Optionee with
notice of the refusal of the Committee to accept such Shares in payment of the
option price. The Committee may impose such limitations and prohibitions on the
use of Shares to exercise an Option as it deems appropriate.
(e) Issuance of Certificate Upon Exercise of Options; Payment of
------------------------------------------------------------
Cash. Only whole Shares shall be issuable upon exercise of Options granted under
- ----
this Paragraph 8. Any right to a fractional Share shall be satisfied in cash.
Upon satisfaction of the conditions of Paragraph 10, a certificate for the
number of whole Shares and a check for the Fair Market Value on the date of
exercise of any fractional Share to which the Optionee is entitled shall be
delivered to such Optionee by the Sponsor.
(f) Periods of Exercise of Options. An Option granted under this
------------------------------
Paragraph 8 shall not be exercisable for six months after the Date of Grant, and
shall then be exercisable in its entirety. No Option shall first become
exercisable following an Optionee's termination of service as a Non-Employee
Director for any reason; provided further, that:
----------------
(i) In the event that an Optionee terminates service
as a Non-Employee Director for any reason other than death or Cause,
any Option held by such Optionee and which is then exercisable shall
be exercisable for a period of 90 days following the date the Optionee
terminates service as a Non-Employee Director; provided, however, that
-----------------
if such termination of employment with the Company is due to the
Disability of the Optionee, he shall have the right to exercise those
of his Options which are then exercisable for a period of one year
following the date the Optionee terminates service as a Non-Employee
Director;
-13-
<PAGE>
provided, however, that in no event shall an Option be exercisable
-----------------
after five years from the Grant Date.
(ii) In the event that an Optionee terminates service
as a Non-Employee Director by reason of his death, any Option held at
death by such Optionee which is then exercisable shall be exercisable
for a period of one year from the date of death by the person to whom
the rights of the Optionee shall have passed by will or by the laws of
descent and distribution; provided, however, that in no event shall an
-----------------
Option be exercisable after five years from the Grant Date.
(iii) In the event that an Optionee's service as a
Non-Employee Director is terminated for Cause, each unexercised Option
shall terminate and cease to be exercisable; provided further, that in
----------------
such event, in addition to immediate termination of the Option, the
Optionee shall automatically forfeit all Shares otherwise subject to
delivery upon exercise of an Option but for which the Sponsor has not
yet delivered the Share certificates, upon refund by the Sponsor of
the option price.
(g) Date of Exercise. The date of exercise of an Option granted
under this Paragraph 8 shall be the date on which written notice of exercise,
addressed to the Sponsor at its main office to the attention of its Secretary,
is hand delivered, telecopied or mailed first class postage prepaid; provided,
--------
however, that the Sponsor shall not be obligated to deliver any certificates for
- -------
Shares pursuant to the exercise of an Option until the Optionee shall have made
payment in full of the option price for such Shares. Each such exercise shall be
irrevocable when given. Each notice of exercise must (i) specify the Option
being exercised; and (ii) include a statement as to the manner in which payment
to the Sponsor shall be made (Shares or cash or a combination of Shares and
cash). Each notice of exercise shall also comply with the requirements of
Paragraph 15.
9. Limitation on Exercise of Incentive Stock Options.
The aggregate Fair Market Value (determined as of the time Options are
granted) of the Shares with respect to which Incentive Stock Options may first
become exercisable by an Optionee in any one calendar year under the Plan and
any other plan of the Company shall not exceed $100,000. The limitations
imposed by this Paragraph 9 shall apply only to Incentive Stock Options granted
under the Plan, and not to any other options or stock appreciation rights. In
the event an individual receives an Option intended to be an Incentive Stock
Option which is subsequently determined to have exceeded the limitation set
forth above, or if an individual receives Options that first become exercisable
in a calendar year (whether pursuant to the terms of an option document,
acceleration of exercisability or other change in the terms and conditions of
exercise or any other reason) that have an aggregate Fair Market Value
(determined as of the time the Options are granted) that exceeds the limitations
set forth above, the Options in excess of the limitation shall be treated as
Non-Qualified Options.
-14-
<PAGE>
10. Rights as Shareholders
An Optionee shall not have any right as a shareholder with respect to
any Shares subject to his Options until the Option shall have been exercised in
accordance with the terms of the Plan and the option document and the Optionee
shall have paid the full purchase price for the number of Shares in respect of
which the Option was exercised and the Optionee shall have made arrangements
acceptable to the Sponsor for the payment of applicable taxes consistent with
Paragraph 16.
11. Changes in Capitalization
(a) Except as provided in Paragraph 11(b), in the event that
Shares are changed into or exchanged for a different number or kind of shares of
stock or other securities of the Sponsor, whether through merger, consolidation,
reorganization, recapitalization, stock dividend, stock split-up or other
substitution of securities of the Sponsor, the Board shall make appropriate
equitable anti-dilution adjustments to the number and class of shares of stock
available for issuance under the Plan, and subject to outstanding Options, and
to the option prices and the amounts payable pursuant to any Cash Rights. Any
reference to the option price in the Plan and in option documents shall be a
reference to the option price as so adjusted. Any reference to the term "Shares"
in the Plan and in option documents shall be a reference to the appropriate
number and class of shares of stock available for issuance under the Plan, as
adjusted pursuant to this Paragraph 11. The Board's adjustment shall be
effective and binding for all purposes of this Plan.
(b) Paragraph 11(a) shall not apply to the number of Shares that
become subject to the grant of Options under Paragraph 8(a). Paragraph 11(a)
shall apply for the purpose of making appropriate equitable anti-dilution
adjustments to Options granted pursuant to Paragraph 8(a) before the effective
date of the relevant event giving rise to the adjustment under Paragraph 11(a).
12. Terminating Events
(a) The Sponsor shall give Optionees at least thirty (30) days'
notice (or, if not practicable, such shorter notice as may be reasonably
practicable) prior to the anticipated date of the consummation of a Terminating
Event. Upon receipt of such notice, and for a period of ten (10) days thereafter
(or such shorter period as the Board shall reasonably determine and so notify
the Optionees), each Optionee shall be permitted to exercise the Option to the
extent the Option are then exercisable; provided that, the Sponsor may, by
-------------
similar notice, require the Optionee to exercise the Option, to the extent the
Option is then exercisable, or to forfeit the Option (or portion thereof, as
applicable). The Committee may, in its discretion, provide that upon the
Optionee's receipt of the notice of a Terminating Event under this Paragraph
12(a), the entire number of Shares covered by Options shall become immediately
-15-
<PAGE>
exercisable. Upon the close of the period described in this Paragraph 12(a)
during which an Option may be exercised in connection with a Terminating Event,
such Option (including such portion thereof that is not exercisable) shall
terminate to the extent that such Option have not theretofore been exercised.
(b) Notwithstanding Paragraph 12(a), in the event the
Terminating Event is not consummated, the Option shall be deemed not to have
been exercised and shall be exercisable thereafter to the extent it would have
been exercisable if no such notice had been given.
13. Interpretation
The Committee shall have the power to interpret the Plan and to make
and amend rules for putting it into effect and administering it. It is intended
that the Incentive Stock Options granted under the Plan shall constitute
incentive stock options within the meaning of section 422 of the Code, and that
Shares transferred pursuant to the exercise of Non-Qualified Options shall
constitute property subject to federal income tax pursuant to the provisions of
section 83 of the Code. The provisions of the Plan shall be interpreted and
applied insofar as possible to carry out such intent.
14. Amendments
The Board or the Committee may amend the Plan from time to time in
such manner as it may deem advisable. Nevertheless, neither the Board nor the
Committee may, without obtaining approval within twelve months before or after
such action by such vote of shareholders as may be required by Pennsylvania law
for any action requiring shareholder approval, or by a majority of votes cast at
a duly held shareholders' meeting at which a majority of all voting stock is
present and voting on such amendment, either in person or in proxy (but not, in
any event, less than the vote required pursuant to Rule 16b-3(b) under the 1934
Act) change the class of individuals eligible to receive an Incentive Stock
Option, extend the expiration date of the Plan, decrease the minimum option
price of an Incentive Stock Option granted under the Plan or increase the
maximum number of shares as to which Options may be granted, except as provided
in Paragraph 11 hereof. In addition, the provisions of Paragraph 8 that
determine (i) which directors shall be granted Options; (ii) the number of
Shares subject to Options; (iii) the option price of Shares subject to Options;
and (iv) the timing of grants of Options shall not be amended more than once
every six months, other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended, if applicable. No
outstanding Option shall be affected by any such amendment without the written
consent of the Optionee or other person then entitled to exercise such Option.
-16-
<PAGE>
15. Securities Law
(a) In General. The Committee shall have the power to make each
----------
grant under the Plan subject to such conditions as it deems necessary or
appropriate to comply with the then-existing requirements of the 1933 Act or the
1934 Act, including Rule 16b-3 (or any similar rule) of the Securities and
Exchange Commission.
(b) Acknowledgment of Securities Law Restrictions on Exercise.
---------------------------------------------------------
To the extent required by the Committee, unless the Shares subject to the Option
are covered by a then current registration statement or a Notification under
Regulation A under the 1933 Act, each notice of exercise of an Option shall
contain the Optionee's acknowledgment in form and substance satisfactory to the
Committee that:
(i) the Shares subject to the Option are being
purchased for investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel satisfactory to the
Sponsor, may be made without violating the registration provisions of the
Act);
(ii) the Optionee has been advised and understands
that (A) the Shares subject to the Option have not been registered under
the 1933 Act and are "restricted securities" within the meaning of Rule 144
under the 1933 Act and are subject to restrictions on transfer and (B) the
Sponsor is under no obligation to register the Shares subject to the Option
under the 1933 Act or to take any action which would make available to the
Optionee any exemption from such registration;
(iii) the certificate evidencing the Shares may bear a
restrictive legend; and
(iv) the Shares subject to the Option may not be
transferred without compliance with all applicable federal and state
securities laws.
(c) Delay of Exercise Pending Registration of Securities.
----------------------------------------------------
Notwithstanding any provision in the Plan or an option document to the contrary,
if the Committee determines, in its sole discretion, that issuance of Shares
pursuant to the exercise of an Option should be delayed pending registration or
qualification under federal or state securities laws or the receipt of a legal
opinion that an appropriate exemption from the application of federal or state
securities laws is available, the Committee may defer exercise of any Option
until such Shares are appropriately registered or qualified or an appropriate
legal opinion has been received, as applicable.
-17-
<PAGE>
16. Withholding of Taxes on Exercise of Option
(a) Whenever the Company proposes or is required to deliver or
transfer Shares in connection with the exercise of an Option, the Company shall
have the right to (i) require the recipient to remit to the Sponsor an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the delivery or transfer of any certificate or certificates for such
Shares or (ii) take any action whatever that it deems necessary to protect its
interests with respect to tax liabilities. The Sponsor's obligation to make any
delivery or transfer of Shares on the exercise of an Option shall be conditioned
on the recipient's compliance, to the Sponsor's satisfaction, with any
withholding requirement. In addition, if the Committee grants Options or amends
option documents to permit Options to be transferred during the life of the
Optionee, the Committee may include in such option documents such provisions as
it determines are necessary or appropriate to permit the Company to deduct
compensation expenses recognized upon exercise of such Options for federal or
state income tax purposes.
(b) Except as otherwise provided in this Paragraph 16(b), any
tax liabilities incurred in connection with the exercise of an Option under the
Plan other than an Incentive Stock Option shall be satisfied by the Sponsor's
withholding a portion of the Shares underlying the Option exercised having a
Fair Market Value approximately equal to the minimum amount of taxes required to
be withheld by the Sponsor under applicable law, unless otherwise determined by
the Committee with respect to any Optionee. Notwithstanding the foregoing, the
Committee may permit an Optionee to elect one or both of the following: (i) to
have taxes withheld in excess of the minimum amount required to be withheld by
the Sponsor under applicable law; provided that the Optionee certifies in
writing to the Sponsor that the Optionee owns a number of Other Available Shares
having a Fair Market Value that is at least equal to the Fair Market Value of
Option Shares to be withheld by the Company for the then-current exercise on
account of withheld taxes in excess of such minimum amount, and (ii) to pay to
the Sponsor in cash all or a portion of the taxes to be withheld upon the
exercise of an Option. In all cases, the Shares so withheld by the Company shall
have a Fair Market Value that does not exceed the amount of taxes to be withheld
minus the cash payment, if any, made by the Optionee. Any election pursuant to
this Paragraph 16(b) must be in writing made prior to the date specified by the
Committee, and in any event prior to the date the amount of tax to be withheld
or paid is determined. An election pursuant to this Paragraph 16(b) may be made
only by an Optionee or, in the event of the Optionee's death, by the Optionee's
legal representative. No Shares withheld pursuant to this Paragraph 16(b) shall
be available for subsequent grants under the Plan. The Committee may add such
other requirements and limitations regarding elections pursuant to this
Paragraph 16(b) as it deems appropriate.
(c) Except as otherwise provided in this Paragraph 16(c), any
tax liabilities incurred in connection with the exercise of an Incentive Stock
Option under the Plan shall be satisfied by the Optionee's payment to the
Sponsor in cash all of the taxes to be withheld upon exercise of the Incentive
Stock Option. Notwithstanding the foregoing, the Committee may permit an
Optionee to elect to have the Sponsor withhold a portion of the Shares
underlying the
-18-
<PAGE>
Incentive Stock Option exercised having a Fair Market Value approximately equal
to the minimum amount of taxes required to be withheld by the Sponsor under
applicable law. Any election pursuant to this Paragraph 16(c) must be in writing
made prior to the date specified by the Committee, and in any event prior to the
date the amount of tax to be withheld or paid is determined. An election
pursuant to this Paragraph 16(c) may be made only by an Optionee or, in the
event of the Optionee's death, by the Optionee's legal representative. No Shares
withheld pursuant to this Paragraph 16(c) shall be available for subsequent
grants under the Plan. The Committee may add such other requirements and
limitations regarding elections pursuant to this Paragraph 16(c) as it deems
appropriate.
17. Effective Date and Term of Plan
This amendment and restatement of the Plan is effective as of April
14, 2000. The Plan shall expire no later than March 13, 2006, the tenth
anniversary of the date the Plan was initially adopted by the Board, unless
sooner terminated by the Board.
18. General
Each Option shall be evidenced by a written instrument containing such
terms and conditions not inconsistent with the Plan as the Committee may
determine. The issuance of Shares on the exercise of an Option shall be subject
to all of the applicable requirements of the corporation law of the Sponsor's
state of incorporation and other applicable laws, including federal or state
securities laws, and all Shares issued under the Plan shall be subject to the
terms and restrictions contained in the Articles of Incorporation and By-Laws of
the Sponsor, as amended from time to time.
Executed as of the 14th day of April, 2000.
COMCAST CORPORATION
By:_________________________________
Attest: ____________________________
-19-
