AMENDMENT AGREEMENT
Dated as of August 19, 1999
to the Compensation and Deferred Compensation Agreement
between Comcast Corporation and Xxxxx X. Xxxxxxx
as amended and restated effective August 30, 1998
THIS AMENDMENT AGREEMENT (the "Amendment") is being made to amend the
provisions of the Compensation and Deferred Compensation Agreement between
Comcast Corporation and Xxxxx X. Xxxxxxx (as amended and restated effective
August 30, 1998) (the "Compensation Agreement") relating to the "Death Benefit"
provided in the Compensation Agreement.
WHEREAS, Xxxxx X. Xxxxxxx ("Xxxxxxx") is the founder and Chairman of
the Board of Directors of Comcast Corporation (the "Company"), and they are
parties to the Compensation Agreement; and
WHEREAS, the Compensation Agreement provides that, in lieu of certain
bonuses which would otherwise have been payable by the Company upon Xxxxxxx'
exercise of certain options he held to purchase shares of Class B Common Stock
of the Company in October 1998, Xxxxxxx' personal representatives would receive
a lump-sum Death Benefit following Xxxxxxx' death; and
WHEREAS, the Death Benefit was intended to provide equivalent value to
the bonus rights which were eliminated in connection with the Compensation
Agreement, and
WHEREAS, Xxxxxxx' willingness to accept the Death Benefit in lieu of
the terminated bonus rights and to exercise his Class B options afforded
significant tax and accounting benefits to the Company and required Xxxxxxx to
incur significant current tax expense he would not otherwise have borne, and
WHEREAS, the Subcommittee on Performance-Based Compensation of the
Company's Board of Directors (the "Subcommittee") has determined that the base
Death Benefit should be increased by $1,191,811, to reflect tax costs incurred
by Xxxxxxx which were higher than expected when the Death Benefit was originally
calculated, and
WHEREAS, Xxxxxxx has proposed, and the Subcommittee has approved, that
Xxxxxxx be given an opportunity to recommend investments to the Company and to
have a portion of the Death Benefit reflect the results of such investments, and
WHEREAS, the Subcommittee has determined that the present value cost to
the Company of the proposal made by Xxxxxxx does not exceed that of the simple
Death Benefit structure currently reflected in the Compensation Agreement, and
that the proposal includes adequate protection for the Company's interests,
NOW THEREFORE, the parties agree as follows:
1. Section 3.11 of the Compensation Agreement is hereby amended and
restated in its entirety to read as follows:
3.11 Supplemental Death Benefit.
(a) Death Benefit. In addition to the other payments provided
or referred to herein, in the event of Xxxxxxx' death during the term of this
Agreement or thereafter the Company shall pay a supplemental death benefit (the
"Death Benefit") as calculated herein to Xxxxxxx' personal representatives
within six (6) months following Xxxxxxx' date of death.
(b) Amount and Payment of Death Benefit. The amount of the
Death Benefit shall be the sum of the following amounts: (i) the Base Amount
exclusive of the Aggregate Initial Variable Account Amount, as each term is
respectively defined in (c) and (d)(ii), below, plus (ii) the amount of the
Variable Account, as defined in (d)(i), below, as of the close of business on a
business day selected by the Company that is within three business days of the
date on which payment is made to Xxxxxxx' personal representatives. The Death
Benefit shall be reduced if and to the extent provided in (h)(i), below. The
Death Benefit, less applicable tax withholding, shall be paid in immediately
available funds, except that the Company may, in its sole discretion, elect to
pay all or any portion of the amount of the Variable Account by transfer in kind
to Xxxxxxx' personal representatives of Company Investments (as defined herein)
valued at the value used for calculating the Death Benefit.
(c) Base Portion of Death Benefit. The "Base Amount" is
Thirty-One Million One Hundred Ninety-One Thousand Eight Hundred Eleven Dollars
($31,191,811).
(d) Variable Portion of Death Benefit. The "Variable Account,"
and the "Aggregate Initial Variable Account Amount," shall be determined as
follows:
(i) At any time, and from time to time, during the term of
his employment by the Company (whether as an employee or as a
consultant), Xxxxxxx may request that a specific portion of the
Base Amount (up to, but not to exceed, the full amount of the
Base Amount) be included in the Variable Account. Such request
shall be made to the Company's Executive Vice President and the
Company's General Counsel (together, the "Company Officers") in
writing, shall specify the amount so proposed to be added to
the Variable Account and a particular investment or particular
investments, each of which is a Qualified Investment (as
defined in (e), below), in which the Company could invest such
amounts, and shall certify that, to the best of Xxxxxxx'
knowledge, each such investment is a Qualified Investment on
the date of such request or will be on the date the investment
is made. The Company shall have complete discretion to grant or
to refuse Xxxxxxx' request, and shall xxxxx Xxxxxxx' request
only if it determines (as provided herein) that such proposed
investment is or will be a Qualified Investment. The effective
date of any addition to the Variable Account shall be the later
of the date on which the Company grants Xxxxxxx' request or, in
the event the Company determines in its sole discretion to make
the investment proposed by Xxxxxxx within 90 days of the
request, the date the Company makes such investment.
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(ii) The Aggregate Initial Variable Account Amount is the
sum of all amounts transferred to the Variable Account as
provided herein, calculated as of the date of transfer, and
without reflecting any gains, losses, expenses or other
transactions in the Variable Account.
(iii) Upon each transfer from the Base Amount to the
Variable Account, each sum so transferred shall be associated
with a particular Qualified Investment (which may be a
hypothetical investment by the Company, or an actual
investment, or any combination of the two, as determined by the
Company). The amount of the Variable Account on any date shall
be the sum of the fair market values of the Qualified
Investments associated with the Variable Account on such date,
less, in the event the Aggregate Initial Variable Account
Amount exceeds Twenty Million Four Hundred Twelve Thousand One
Hundred Thirty-Seven Dollars ($20,412,137), compound interest
at eight percent (8%) per annum on the amount of such excess
from the date such excess is created to the earlier of the date
on which the Variable Account is being valued or April 7, 2004.
(e) Qualified Investments. A "Qualified Investment" is an
investment which is or would be actually available to the Company and which
would meet each of the following criteria if actually made by the Company at the
time of the initial investment; provided, however, that the Company may
disapprove of any such investment (or may subsequently cause any Qualified
Investment to be eliminated or disposed of) based, in its discretion, on its
application of such criteria:
(i) the investment can be made without any actual or
potential legal or regulatory restriction or negative impact on
the Company;
(ii) the investment presents no actual or potential
conflict of interest or diversion of corporate opportunity
between Xxxxxxx and the Company or any actual or potential
conflict of interest between the Company and the entity or
entities to which the investment relates;
(iii) the investment would not require disclosure by the
Company in its financial statements as a business relationship
or transaction with management or a related party, as a
compensation committee overlap disclosure item, or otherwise
under Regulation S-K promulgated by the Securities and Exchange
Commission or Sections 13, 14 or 16 of the Securities Exchange
Act of 1934, as amended, or the regulations or forms
thereunder;
(iv) the investment does not expose the Company to any risk
of loss or mandatory additional investment in excess of the
actual amount invested;
(v) the investment would at all times be included on the
Company's audited financial statements as an investment (or as
an offset to an accrued liability);
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(vi) the investment is either readily marketable or there
is a reasonable means to dispose of the investment from time to
time (and no less frequently than annually) whether or not at
full value, and there is reasonably available any information
concerning the investment which the Company deems necessary for
effectuating the purposes of this Agreement; and
(vii) the investment is to be unencumbered and available to
satisfy the claims of general creditors of the Company.
(f) Variable Account - Company Investments and Other Rules.
(i) The Variable Account shall at all times be an account
on the books of the Company reflecting the hypothetical
investment of the Aggregate Initial Variable Account Amount and
the proceeds thereof in the specific Qualified Investments.
(ii) The Company shall reflect on the books of the Variable
Account all income, gains, losses, and other proceeds
associated with the Qualified Investments therein. In the event
proceeds on a Qualified Investment are received in cash, the
value of such cash shall be included in the Variable Account
and, unless invested in another Qualified Investment, shall be
deemed to have been invested in a special Qualified Investment
on which interest accrues at the rate of eight percent (8%) per
annum from the date of investment until the earlier of the date
of payment of the Death Benefit or April 7, 2004, and which
thereafter does not pay interest.
(iii) If the Company makes actual investments corresponding
to any of such Qualified Investments (each such investment a
"Company Investment"), (A) such Company Investments shall be
part of the Company's general assets, subject to the Company's
discretion and control, and not form part of the Variable
Account; (B) Xxxxxxx shall have no right to obtain possession
or ownership of Company Investments, or to vote or otherwise
control them; (C) the transactions reflected in the Variable
Account shall be the same as those with respect to such Company
Investments (giving regard to any difference in amount or
timing with respect to the Qualified Investment in the Variable
Account and such Company Investment); (D) the Company's
out-of-pocket costs in making, maintaining, and disposing of
each Company Investment shall be charged against the value of
the corresponding Qualified Investment in the Variable Account;
and (E) the Company shall have full discretion and control with
respect to such Company Investments, including whether to
retain or to sell or otherwise dispose of such investments;
provided, that it shall exercise such discretion in good faith
with respect to Xxxxxxx. Nothing herein shall forbid Xxxxxxx to
consult with the Company regarding management of any Company
Investments.
(iv) If at any time the Company determines, as provided in
the first paragraph of (e), above, that an investment reflected
in the Variable Account is no longer a Qualified Investment,
the Company shall promptly give Xxxxxxx written
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notice of such determination and the basis therefor, and such
investment shall be deemed sold at its then-fair market value.
Such sale shall be on the terms reflected in the corresponding
sale, if any, of the appropriate Company Investment, if any,
and otherwise shall be deemed to be for cash, with the proceeds
or such sale treated as described herein. Nothing herein shall
require the sale or other disposition of a Company Investment
which is no longer a Qualified Investment.
(v) Xxxxxxx may request, from time to time, that all or any
portion of the Variable Account be transferred from the
then-current Qualifying Investment(s) to one or more different
Qualified Investments. Such request shall be made, and the
Company shall deal with such request, in the manner established
herein for initial transfers to the Variable Account, except
that the Aggregate Initial Variable Account Amount shall not be
affected if any such request is granted.
(vi) In the event holders of an investment corresponding to
a Qualified Investment are required to make an investment
decision (e.g., acceptance or not of a tender offer; exercise
of dissenter's rights), and there is no corresponding Company
Investment, the Company shall, after consultation with Xxxxxxx,
make a determination in good faith to reflect the actions the
Company determines a reasonable investor would take and adjust
the value and composition of such Qualified Investment
accordingly.
(g) Procedures and Reports. Except as otherwise provided
herein, all determinations and waivers on the part of the Company with respect
to Qualified Investments shall be made jointly by the Company Officers (after
such consultations with other management personnel, the Subcommittee, experts,
and Xxxxxxx, as they shall deem appropriate). The Company shall provide Xxxxxxx
or his personal representatives and the Subcommittee at the request of any of
them, but no less than once each calendar year, a written report regarding the
value of the Death Benefit as of a recent date, including the value of each
Qualified Investment in the Variable Account and all transactions affecting such
value (including interest, dividends, and distributions with respect to the
Qualified Investments). In the event Xxxxxxx or his personal representatives
disagree with any such valuation, the Company and Xxxxxxx or his personal
representatives shall consult in good faith to resolve such disagreement, and if
such disagreement is not so resolved the appropriate valuation shall be
determined by the Subcommittee under such reasonable procedures as it determines
at the time. The Company shall provide Xxxxxxx or his personal representatives
from time to time copies of all information received by the Company with respect
to Company Investments or the Qualified Investments in the Variable Account, and
shall promptly inform Xxxxxxx and the Subcommittee (in advance, if possible) of
all transactions with respect to Company Investments or which the Company deems
to affect the value of Qualified Investments. The Company shall notify the
Subcommittee in writing quarterly as to all amounts transferred to the Variable
Account (including the Qualified Investment associated with such amount) during
the previous calendar quarter and any changes in the composition of the
Qualified Investments.
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(h) Indemnification and Release.
(i) To the extent of the Death Benefit, Xxxxxxx hereby
indemnifies the Company, and holds it harmless, against any and
all liabilities, costs, and expenses (including reasonable
attorney and expert fees), including without limitation
indemnification liabilities to officers, directors, agents or
employees, which arise in connection with Company Investments
other than by reason of the bad faith, willful misconduct, or
gross negligence of the Company or such persons. Such
indemnification shall be effected by charging the appropriate
amount against the relevant Qualifying Investment in the
Variable Account, and, to the extent of any excess, by reducing
any other component of the Death Benefit at the time or payment
thereof.
(ii) To the maximum extent permitted by law, Xxxxxxx hereby
releases the Company and each of its officers, directors,
agents, and employees, from any and all liability to Xxxxxxx
arising out of the Company's good-faith management of Company
Investments, regardless of the effect of such management on the
value of the Death Benefit.
2. All investments made by the Company at Xxxxxxx' suggestion through
February 22, 2000, as reported to the Subcommittee, shall be considered to have
been made in compliance with Section 3.11 of the Compensation Agreement, as
amended by this Amendment. As a result, each such investment shall be considered
a Company Investment, the amount of such investment (plus any associated
out-of-pocket costs incurred by the Company) shall be treated as part of the
Aggregate Initial Variable Account Amount as of such date, and the amount of
such investment shall be treated as part of the Variable Account associated with
a Qualified Investment identical to the Company Investment.
3. This Amendment constitutes the complete agreement of the parties
regarding the Death Benefit, and supersedes all prior agreements and
understandings.
4. Except as amended hereby, the Compensation Agreement remains in full
force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
COMCAST CORPORATION
/s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
By: /s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
Executive Vice President
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