TERM LIFE INSURANCE PREMIUM AND TAX BONUS AGREEMENT
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THIS AGREEMENT is made as of the 23 day of September, 1998, by and
between Comcast Corporation, a Pennsylvania corporation (the "Company") and
Xxxxx X. Xxxxxxx ("Xxxxxxx"), the President of the Company.
RECITALS
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WHEREAS, Xxxxxxx has rendered loyal and valuable service to the Company
since January 1, 1984; and
WHEREAS, the Company's Board of Directors (the "Board") recognize that
Xxxxxxx' contribution to the growth and success of the Company has continued to
be substantial throughout his service with the Company and that without his
continued leadership and vision the Company would not have achieved and
maintained its current preeminent status in the cable television and cellular
communications industries nor would the Company have achieved its performance
levels or successfully consummated the many strategic transactions that have
closed during the past several years, including the recent capital investment
into the Company by Microsoft Corp.;
WHEREAS, in recognition of the foregoing, the Company, in addition to
other forms of compensation afforded Xxxxxxx, wishes to provide funding for
additional life insurance protection of (i) $150,000,000 under policies of life
insurance insuring the life of Xxxxxxx, which are described on the attached
Schedule A and which were issued by the insurance companies identified in
Schedule A and (ii) $20,000,000 under policies of life insurance insuring the
life of Xxxxxxx, which are described on the attached Schedule B and which were
issued by the insurance companies identified in Schedule B (the policies
described in Schedule A and Schedule B are hereinafter individually referred to
as a "Policy" and collectively as the "Policies" and the insurance companies
identified in Schedule A and Schedule B are hereinafter individually referred to
as the "Insurer" and collectively as the "Insurers"):
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties, hereto
intending to be legally bound hereby, agree as follows
1. Life Insurance Premiums. No later than thirty business days before
the due date of each annual premium under each Policy, the Company or the
"Trust" (as defined herein) shall pay to Xxxxxxx (the full amount of the animal
premiums under the Policies (the Premium Payments)
2. Bonus. (a) In addition to the Premium Payments, the Company or the
Trust shall pay to Xxxxxxx, thirty days prior to the time the Premium Payments
arc made under Section 1 hereof, the following supplemental amounts (none of
which shall be considered advances) (the "Bonus"): An income tax gross-up amount
equal to (i) the product of the Premium Payments
paid under Section 1 hereof times the highest marginal income tax rate, (ii)
divided by one minus the highest marginal income tax rate. For purposes of this
Section 2, the term "highest marginal income tax rate" shall mean the sum of the
highest marginal combined local, state and federal personal income tax rates
(including any state unemployment compensation tax rate, any surtax rate as well
as the Medicare hospital insurance tax rate imposed on employees under the
Federal Insurance Contributions Act), as in effect for the calendar year as to
which the Bonus relates, provided that in determining such tax rate the highest
marginal state and local income tax rates shall be reduced by such number of
percentage points as will give effect to the tax benefit obtained by Xxxxxxx in
connection with his deduction of state and local income taxes for federal income
tax proposes.
(b) All Bonuses to be paid under this Agreement are subject to
applicable tax withholding requirements.
3. Funding of Trust.
(a) Prior to the occurrence of a "Change of Control" (as
hereinafter defined), the Company shall establish a grantor trust (the "Trust"),
the terms of which shall be consistent with the requirements applicable under
the Code in order to avoid the constructive receipt of the assets held in the
Trust by Xxxxxxx or his family. The trust document for the Trust shall be in a
form that is satisfactory to both the Company and Xxxxxxx, and may, but need
not, be in substantially the same form, as the model trust agreement published
by the Internet Revenue Service in Revenue Procedure 92-64. The trustee of the
Trust shall be such person or institution acceptable both to the Company and
Xxxxxxx. The Company shall contribute such amounts in cash or such assets as it
deems appropriate for the purpose of funding Promotion Payments and the Bonus
payable under the terms of this Agreement. Upon the occurrence of a Change of
Control, the Trust, if not already irrevocable, shall become irrevocable. The
Company shall be required immediately prior to a Change of Control (or in the
event that the Company does not receive notice of a proposed Change of Control
prior to such event, immediately upon a Change of Control to contribute (the
"Change of Control Payment") to the Trust an amount equal to the "Present Value"
(as hereinafter defined) of:
(i) The remaining Premium Payments that the Company is obligated
to pay until the death of Xxxxxxx under Section I hereof; and
(ii) The remaining Bonuses that the Company is obligated to pay to
Xxxxxxx pursuant to the provisions of Section 2 hereof,
(b) For purposes of this Agreement: (i) a "Charge of Control"
shall be deemed to have occurred on the date that Xxxxxxx and members of his
immediate family (or trusts for their benefit) first cease to beneficially own
at least 50% of the voting power of the Company; and (ii) "Present Value" shall
mean that sum of the remaining Premium Payments and Bonus amounts that the
Company is obligated to pay for the remainder of the respective premium periods
under the policies discounted from the respective dates on which those payments
will become due to the date of fee Change of Control Payment, at the then
current yields of U.S.
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Treasury Bonds maturing on the respective dates on which the Premium Payments
and Bonuses will become due.
4. Payment In All Events. The Company shall satisfy during the terms of
the Policies and continue to satisfy thereafter its obligations under this
Agreement for all benefits granted to Xxxxxxx until the death of Xxxxxxx.
5. Policy Proceeds. Upon the death of Xxxxxxx, the Policies shall be
paid directly to the beneficiary or beneficiaries designated by Xxxxxxx (or the
owner of the Policies, if assigned by, Xxxxxxx) in the manner and in the amount
or amounts provided in the beneficiary designation provision of the applicable
Policy. The Company shall have no claim with respect to the proceeds of the
Policies, whether on account of the Premium Payments, the Bonuses or otherwise.
6. Termination. Xxxxxxx may terminate this Agreement by written notice
to the Company. Such termination shall be effective as of the date of such
notice. The Company may not terminate this Agreement.
7. Amendment. This Agreement may not be amended, altered or modified,
except by a written instrument signed by the parties to this Agreement, or their
respective successors or assigns, and may not otherwise be terminated except as
provided herein.
8. Succession. This Agreement shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns, and Xxxxxxx and his
successors, assigns, heirs, executors, administrators and beneficiaries.
9. Notices. Any notice, consent or demand required or permitted to be
given under the previsions of this Agreement shall be in writing, and shall be
signed by the party making the same. If such notice, consent or demand is mailed
to a party hereto, it shall be sent by certified mail, postage prepaid, or
delivered by a nationally recognized overnight courier service addressed to such
party's last known address as shown on the records of the Company. The date of
such mailing or delivery to such service shall be deemed date of notice, consent
or demand.
10. Captions. The captions of the Sections herein are inserted as a
matter of convenience of reference only and in no way define, limit or describe
the scope of this Agreement or any provisions hereof.
11. Governing Law. The Agreement, and the rights of the parties
hereunder, shall be governed by and construed in accordance with the internal
laws of the Commonwealth of Pennsylvania and shall be enforced in the
Commonwealth of Pennsylvania,
12. Representations. The Company has the corporate power and authority
to enter into and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by the
Company has been duly authorized by all necessary corporate action required to
have been taken under applicable law and the Company's
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organizational documents. This Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms. Neither the
execution nor performance of this Agreement by the Company will conflict with or
result in to breach of the provisions of the Company's Articles of Incorporation
or Bylaws or any agreement to which the Company is a party, or violate or
require any consent under any law, regulation, order or decree.
IN WITNESS WHEREOF, the parties have cause this Agreement to be duty
executed as of the date first above written.
Attest: COMCAST CORPORATION
By: _____________________ By: /s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx
Title: _____________________ Title: Senior Vice President
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/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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SCHEDULE A
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Summary of Term Life Insurance Reserved for Xxxxx Xxxxxxx
20 Year Level Term
Insurance Policy Policy Death Annual
Carrier Number Date Benefit Premium
------- ------ ---- ------- -------
CNA (Valley Forge) VINY010673 10/07/98 18,750,000 17,516,40
VINY011691 10/07/98 18,750,000 17,516.40
VINY011693 10/07/98 18,750,000 17,516.40
VINY011701 10/07/98 18,750,000 17,516.40
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Subtotal: 75,000,000 70,065.60
Lincoln Benefit 01TI050038 09/25/98 7,500,000 8,910.00
01TI050059 09/25/98 7,500,000 8,910.00
01T1050060 09/25/98 7,500,000 8,910.00
01T1050061 09/25/98 7,500,000 8,910.00
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Subtotal: 30,000,000 35,640.00
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Mass Mutual 6282675 09/25/98 3,000,000 3,847.20
6282682 09/25/98 3,000,000 3,847.20
6282676 09/25/98 3,000,000 3,847.20
6282651 09/25/98 3.000,000 3,847.20
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Subtotal: 12,000,000 15,388.80
Prudential 77377372 09/25/98 5,375,000 7,360.00
77377370 09/25/98 5,375,000 7,360.00
B4002956 09/25/98 5,375,000 7,360.00
B4002962 09/25/98 5,375,000 7,360.00
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Subtotal: 21,500,000 29,440.00
Manulife 55624191 09/25/98 375,000 497.50
55624217 09/25/98 375,000 497.50
55624209 09/25/98 375,000 497.50
54417969 09/25/98 375,000 497.50
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Subtotal: 1,500,000 1,990.00
Travelers
4790587 09/25/98 2,500,000 3,175.00
4790588 09/25/98 2,500,000 3,175.00
4790589 09/25/98 2,500,000 3,175.00
4790591 09/25/98 2,500,000 3,175.00
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Subtotal: 10,000,000 12,700.00
Grand Total 150,000,000 165,244.40
SCHEDULE B
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Summary of Term Life Insurance Reserved for Xxxxx Xxxxxxx
10 Year Level Term
Insurance Policy Policy Death Annual
Carrier Number Date Benefit Premium
------- ------ ---- ------- -------
Prudential B4004939 09/25/98 8,500,000 7,700
CIGNA N/A N/A 11,500,000 11,575
Total: 20,000,000 19,275
