CONSULTING AGREEMENT
CONSULTING AGREEMENT ("Agreement"), made as of May 26, 2004, by and
between Comcast Corporation, a Pennsylvania corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and C.
Xxxxxxx Xxxxxxxxx (the "Consultant").
WITNESSETH:
WHEREAS, the Consultant is employed by the Company pursuant to the
Employment Agreement (as defined herein); and
WHEREAS, the Consultant has elected to retire from his position as
Non-Executive Chairman of the Board and to retire from employment with the
Company, effective May 26, 2004; and
WHEREAS, the Company desires to retain the benefit of the Consultant's
knowledge and experience by retaining the Consultant, and the Consultant desires
to accept such position, for the term and upon the other conditions hereinafter
set forth; and
WHEREAS, in connection with Consultant's retirement from his position
as Non-Executive Chairman of the Board and retirement from employment with the
Company, the parties desire to supersede and replace the Employment Agreement
with this Agreement; and
WHEREAS, concurrent with the execution of this Agreement, the parties
shall also execute the First Amendment to the Consulting Agreement, dated as of
the date hereof (the "First Amendment"), which shall govern the terms under
which Consultant may defer certain compensation received under this Agreement,
as more fully provided for in the First Amendment.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Consultant (individually a
"Party" and together the "Parties") agree as follows:
Section 1 . Definitions.
(a) "Affiliate" of a person or other entity shall mean a person or
other entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified.
(b) "AT&T" shall mean AT&T Corp., a New York corporation.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Broadband" shall mean AT&T Broadband Corp., a Delaware
corporation.
(e) "Cause" shall mean:
(i) the Consultant is convicted of a felony involving the
Consultant's moral turpitude; or
(ii) the Consultant is guilty of willful gross neglect or
willful gross misconduct in carrying out his duties under this
Agreement, resulting, in either case, in material economic harm to the
Company, unless the Consultant believed in good faith that such act or
nonact was in the best interests of the Company.
(f) "Change in Control" shall mean the occurrence of any of the
following events:
(i) An acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act")) (an "Entity") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (A) the then outstanding shares of common
stock of the Company (the "Outstanding Company Stock") or (B) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); excluding, however, the
following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company, or (4) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of this Section 1(f);
(ii) A change in the composition of the Board such that the
individuals who, as of the effective date of this Agreement, constitute
the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that for purposes of this
definition, any individual who becomes a member of the Board subsequent
to the effective date of this Agreement, whose election, or nomination
for election, by the Company's shareholders was approved by a vote of
at least a two-thirds majority of those individuals who are members of
the Board and who were also members of the Incumbent Board (or deemed
to be such pursuant to this
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proviso) shall be considered as though such individual were a member of
the Incumbent Board; and provided, further however, that any such
individual whose initial assumption of office occurs as a result of or
in connection with either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of an Entity other than the Board shall not
be so considered as a member of the Incumbent Board;
(iii) A merger, reorganization or consolidation to which the
Company is a party or a sale or other disposition of all or
substantially all of the assets of the Company (each, a "Corporate
Transaction"); excluding however, such a Corporate Transaction pursuant
to which (A) all or substantially all of the individuals and entities
who are the beneficial owners, respectively, of the Outstanding Company
Stock and Outstanding Company Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares of
common stock, and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
Corporate Transaction (including, without limitation, a corporation or
other person which as a result of such transaction owns the Company or
all or substantially all of the Company's assets either directly or
through one or more subsidiaries (a "Parent Company")) in substantially
the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Entity (other
than the Company, any employee benefit plan (or related trust) of the
Company, such corporation resulting from such Corporate Transaction
(or, if reference was made to equity ownership of any Parent Company
for purposes of determining whether clause (A) above is satisfied in
connection with the applicable Corporate Transaction, such Parent
Company) will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction (or, if reference was made to
equity ownership of any Parent Company for purposes of determining
whether clause (A) above is satisfied in connection with the applicable
Corporate Transaction, such Parent Company) or the combined voting
power of the outstanding voting securities of such corporation entitled
to vote generally in the election of directors unless such ownership
resulted solely from ownership of securities of the Company prior to
the Corporate Transaction, and (C) individuals who were members of the
Incumbent Board will immediately after the consummation of the
Corporate Transaction constitute at least a two-thirds majority of the
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members of the board of directors of the corporation resulting from
such Corporate Transaction (or, if reference was made to equity
ownership of any Parent Company for purposes of determining whether
clause (A) above is satisfied in connection with the applicable
Corporate Transaction, of the Parent Company); or
(iv) The approval by the shareholders of the Company of a plan
of complete liquidation or dissolution of the Company.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Constructive Termination Without Cause" shall mean termination by
the Consultant of his service at his initiative following the occurrence of any
of the following events without his consent:
(i) a reduction in the Consultancy Fee or the termination or
material reduction of any benefits provided under this Agreement (other
than as part of an across-the-board reduction applicable to all
executive officers of the Company);
(ii) prior to the 2005 Annual Meeting, the failure to elect or
reelect the Consultant to the Board or the removal of him from the
Board;
(iii) the failure to provide Home Office Support (as defined
herein) to the Consultant;
(iv) the failure of the Company to obtain the assumption in
writing of its obligation to perform this Agreement by any successor to
all or substantially all of the assets of the Company within 15
calendar days after a merger, consolidation, sale or similar
transaction; or
(v) any breach of this Agreement by the Company.
Following written notice from the Consultant, as described
above, the Company shall have 15 calendar days in which to cure. If the
Company fails to cure, the Consultant's termination shall become
effective on the 16th calendar day following the written notice.
(i) "Disability" shall mean the Consultant's inability, due to physical
or mental incapacity, to substantially perform his duties and responsibilities
under this Agreement as determined by a medical doctor selected by the Company
and the Consultant. If the Parties cannot agree on a medical doctor, each Party
shall select a medical doctor and the two doctors shall select a third who shall
be the approved medical doctor for this purpose.
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(j) "EBA" shall mean the Employee Benefits Agreement by and between
AT&T and Broadband dated as of December 19, 2001.
(k) "Employment Agreement" shall mean the Employment Agreement entered
into as of November 18, 2002 by and between the Company and the Consultant.
(l) "Fair Market Value" shall mean the value of a share of Stock or a
share of AT&T stock, as the case may be, as traded on the Nasdaq Stock Market or
the New York Stock Exchange, as the case may be, on the date in question, based
on the respective closing prices.
(m) "Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of December 19, 2001, as amended, by and among AT&T, Broadband, Comcast
Corporation, AT&T Broadband Acquisition Corp., Comcast Acquisition Corp. and the
Company.
(n) "Stock" shall mean Class A Common Stock of the Company.
(o) "Term" shall mean the period specified in Section 3 below.
(p) "Termination Date" shall mean the date that is one year after the
2005 Annual Meeting.
(q) "2004 Annual Meeting" shall mean the regularly scheduled 2004
annual meeting of the shareholders of the Company.
(r) "2005 Annual Meeting" shall mean the regularly scheduled 2005
annual meeting of the shareholders of the Company.
Section 2 . Retirement as Chairman.
Consultant hereby retires from employment with the Company and from his
position as Non-Executive Chairman of the Board effective as of the close of
business on May 26, 2004 (the "Effective Date").
Section 3 . Term.
The Term shall begin on the Effective Date and end on the Termination
Date. Notwithstanding the foregoing, after the Effective Date, the Term may be
earlier terminated by either Party in accordance with the provisions of Section
8.
Section 4 . Positions, Duties and Responsibilities.
(a) During the Term, Consultant shall be a senior advisor and
consultant to the Company and, upon reasonable request of the Chief Executive
Officer, or
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an Executive Vice President of the Company mutually designated by the Chief
Executive Officer and the Consultant, make himself available to perform
consulting and advisory services with respect to strategic issues concerning the
Company. Such consulting and advisory services shall be related to such matters
as the Chief Executive Officer of the Company, or an Executive Vice President of
the Company so mutually designated, and Consultant may mutually agree. During
the Term, the Consultant shall accommodate reasonable requests for the
Consultant's consulting and advisory services, by making himself reasonably
available, by phone or otherwise, to perform such services, but in no event
shall Consultant be required to devote more than eighty hours per month to his
services hereunder. Notwithstanding the foregoing, during the time that the
Consultant serves as a director of the Company, he shall devote such time as is
necessary to satisfy his fiduciary duties as a director. In addition, the
Company shall use its reasonable best efforts to ensure that the Consultant
shall serve as a director of the Company through the 2005 Annual Meeting.
(b) Nothing herein shall preclude the Consultant from (i) serving on
the boards of directors of a reasonable number of other corporations subject to
the approval of the Board in each case (which approval has been given as to the
boards listed in Exhibit A attached hereto), which approval shall not be
unreasonably withheld, (ii) serving on the boards of a reasonable number of
trade associations and/or charitable organizations, (iii) engaging in any
charitable or business activities and community affairs, and (iv) managing his
personal investments and affairs, provided that such activities set forth in
this Section 4(b) do not materially interfere with the proper performance of his
duties and responsibilities under Section 4(a).
Section 5 . Compensation.
(a) As soon as practicable after the Effective Date, in recognition of
the Consultant's retirement from employment with the Company and from his
position as Non-Executive Chairman of the Board, the Company shall pay to the
Consultant an amount in cash equal to the sum of (i) the base salary under the
Employment Agreement as in effect immediately prior to the Effective Date,
payable from the Effective Date through April 15, 2005, which shall not be less
than one year's base salary, (ii) the Target Bonus under the Employment
Agreement for calendar year 2004, and (iii) a pro-rata portion of the Target
Bonus under the Employment Agreement for calendar year 2005, equal to such
Target Bonus, multiplied by a fraction, the numerator of which is the number of
days from January 1, 2005 until April 15, 2005 and the denominator of which is
365.
(b) During the Term, the Consultant shall be paid consultancy fees at
the rate of $900,000 per year (the "Consultancy Fee"). The Consultancy Fee shall
be paid in equal monthly installments on the last day of each month. In no event
shall the Consultancy Fee be decreased.
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Section 6 . Outstanding Long-term Incentive Awards.
(a) Existing Performance Awards. Subject to the provisions of Section
8, Exhibit B attached hereto sets forth the treatment of outstanding
equity-based awards held by the Consultant as of the Effective Date.
(b) Options. Except as otherwise provided in Exhibit B, all options
held by the Consultant as of the Effective Time shall continue to vest during
the Term as if he had remained employed by the Company. On the Termination Date,
all options held by the Consultant shall become fully vested and shall remain
exercisable for the remainder of their original ten-year terms.
Section 7 . Benefit Programs; Reimbursement of Business and Other
Expenses.
(a) The Consultant shall not be entitled to participate in any employee
benefit plans or other benefits or conditions of employment available to the
employees of the Company, except as provided in Section 6, Section 7 or
elsewhere in this Agreement.
(b) During the Term, the Consultant shall be entitled to those home
office and secretarial support arrangements in effect as of the date hereof with
respect to his home offices in Connecticut and Florida (with such changes as may
be mutually agreed to by the Company and the Consultant, "Home Office Support").
(c) From the Effective Date until the 2005 Annual Meeting, the
Consultant shall be entitled to participate in each of the Company's executive
services in accordance with the terms and conditions of such arrangements as
they are in effect from time to time for the Company's Chief Executive Officer
(except for the executive services as set forth below). During the Term, the
Consultant shall be entitled to (i) primary personal use of an airplane on the
same economic terms as the Chief Executive Officer of the Company and (ii) tax
preparation and financial counseling services (plus a gross-up for applicable
taxes payable in connection with the provisions of such services, but only if
such gross-up is provided to a senior executive of the Company). In addition,
the Company shall pay the dues for the Consultant's membership in each of the
Business Roundtable, the G-100 and the Business Council through the 2004 Annual
Meeting.
(d) During the Term, the Company shall pay when due the premiums for
the Consultant's Senior Management Universal Life Insurance Policy (as in effect
as of the Effective Date), and a gross-up for all federal taxes payable by the
Consultant in connection with the payment of such premiums.
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(e) The Consultant is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all business expenses incurred in
connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy.
Section 8 . Termination.
(a) Termination Due to Death. In the event that the Consultant's
performance of consulting services is terminated due to his death, his estate or
his beneficiaries, as the case may be, shall be entitled to the following
benefits:
(i) the Consultancy Fee through the end of the month in which
his death occurs;
(ii) all outstanding options, whether or not then exercisable,
shall become exercisable and shall remain exercisable until the end of
their originally scheduled ten-year terms; and
(iii) all outstanding performance shares and other
equity-based awards shall vest and be paid out (at target, with respect
to the performance shares) in a single installment promptly after his
death.
(b) Termination Due to Disability. In the event that the Consultant's
service is terminated due to his Disability, he shall be entitled to the
following benefits:
(i) the Consultancy Fee through the end of the month in which
disability benefits commence;
(ii) all outstanding options, whether or not then exercisable,
shall become exercisable and shall remain exercisable until the end of
their originally scheduled ten-year terms; and
(iii) all outstanding performance shares and other
equity-based awards shall vest and be paid out (at target, with respect
to the performance shares) in a single installment promptly after his
termination.
In no event shall a termination of the Consultant's service
for Disability occur until the Party terminating his service gives
written notice to the other Party in accordance with Section 23 below.
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(c) Termination by the Company for Cause.
(i) A termination for Cause shall not take effect unless the
provisions of this paragraph (i) are complied with. The Consultant
shall be given written notice by the Board, authorized by a vote of no
less than 75% of the Board, of the intention to terminate him for
Cause, such notice (A) to state in detail the particular act or acts or
failure or failures to act that constitute the grounds on which the
proposed termination for Cause is based and (B) to be given within six
months of the Board learning of such act or acts or failure or failures
to act. The Consultant shall have ten calendar days after the date that
such written notice has been given to the Consultant in which to cure
such conduct, to the extent such cure is possible. If he fails to cure
such conduct, the Consultant shall then be entitled to a hearing before
the Board. Such hearing shall be held within 15 calendar days of such
notice to the Consultant, provided he requests such hearing within ten
calendar days of the written notice from the Board of the intention to
terminate him for Cause. If, within five calendar days following such
hearing, the Consultant is furnished written notice by the Board
confirming that, in its judgment, grounds for Cause on the basis of the
original notice exist, he shall thereupon be terminated for Cause.
(ii) In the event the Company terminates the Consultant's
service for Cause:
(A) the Consultant shall be entitled to the
Consultancy Fee through the date of the termination; and
(B) all outstanding options which are not exercisable
shall be forfeited; exercisable options shall remain
exercisable until the earlier of the ninetieth day after the
date of termination or the originally scheduled expiration
date of the options unless the Board determines otherwise.
(d) Termination without Cause or Constructive Termination without
Cause. In the event the Consultant's service is terminated by the Company
without Cause, other than due to Disability or death, or in the event there is a
Constructive Termination without Cause, the Consultant shall be entitled to the
following benefits:
(i) the Consultancy Fee through the date of termination;
(ii) a cash payment of $1,800,000, payable in a single
installment promptly after his termination;
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(iii) all outstanding options, whether or not then
exercisable, shall become exercisable and shall remain exercisable
until the end of their originally scheduled ten-year terms;
(iv) all outstanding performance shares and other equity-based
awards shall vest and be paid out (at target, with respect to the
performance shares) in a single installment promptly after his
termination; and
(v) if such termination occurs on or prior to the second
anniversary of the effective date of the Employment Agreement, the
Consultant shall be entitled to receive a lump sum cash amount equal to
the greater of (A) (X) the product of three multiplied by the sum of
(1) the Base Salary (as defined in the Employment Agreement), (2) the
annual incentive award, equal to the target bonus established by AT&T
for 2002, which was 150% of such Base Salary, and (3) the long-term
performance share award, equal to the performance share target set by
AT&T for 2002 and (B) the product of four multiplied by the sum of Base
Salary (as defined in the Employment Agreement), at the annualized rate
in effect on the date of termination of employment under the Employment
Agreement, and the Target Bonus (as defined in the Employment
Agreement) for the year in which the termination of employment under
the Employment Agreement occurs. If such termination occurs after the
second anniversary of the effective date of the Employment Agreement,
the Consultant shall be entitled to receive the payment set forth in
clause (B) of this Section 8(d)(v).
(e) Gross-up Payment.
(i) If the aggregate of all payments or benefits made or
provided to the Consultant under this Agreement and under all other
plans and programs of the Company (the "Aggregate Payment") is
determined to constitute a Parachute Payment within the meaning of
Section 280G(b)(2) of the Code, the Company shall pay to the
Consultant, prior to the time any excise tax imposed by Section 4999 of
the Code ("Excise Tax") is payable with respect to such Aggregate
Payment, an additional amount (the "Gross-Up Payment") which, after the
imposition of all income, employment, excise and other taxes thereon,
is equal to the Excise Tax on the Aggregate Payment. The determination
of whether the Aggregate Payment constitutes a Parachute Payment and,
if so, the amount to be paid to the Consultant and the time of payment
pursuant to this Section 8(e)(i) shall be made by an independent
auditor (the "Auditor") selected by the Parties and paid by the
Company. The Auditor shall be a nationally recognized United States
public accounting firm which has not, during the two years preceding
the date of its selection, acted in any way
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on behalf of the Company or any Affiliate thereof. If the Consultant
and the Company cannot agree on the firm to serve as the Auditor, then
the Consultant and the Company shall each designate one accounting firm
and those two firms shall jointly select the accounting firm to serve
as the Auditor. All fees and expenses of the Auditor shall be borne
solely by the Company. Any Gross-Up Payment shall be paid by the
Company to the Consultant within five calendar days of the receipt of
the Auditor's determination. Any determination by the Auditor shall be
binding upon the Company and the Consultant.
(ii) As a result of uncertainty in the application of Sections
280G and 4999 of the Code at the time of the initial determination by
the Auditor hereunder, it is possible that the Gross-Up Payment made
will have been an amount more than the Company should have paid
pursuant to Section 8(e)(i) (the "Overpayment") or that the Gross-Up
Payment made will have been an amount less than the Company should have
paid pursuant to Section 8(e)(i) (the "Underpayment"). In the event
that there is a final determination by the Internal Revenue Service, or
a final determination by a court of competent jurisdiction, that an
Overpayment has been made, any such Overpayment shall be treated for
all purposes as a loan to the Consultant which the Consultant shall
repay to the Company together with interest at the applicable Federal
rate provided for in Section 7872(f)(2) of the Code. In the event that
there is a final determination by the Internal Revenue Service, a final
determination by a court of competent jurisdiction or a change in the
provisions of the Code or regulations pursuant to which an Underpayment
arises under this Agreement, any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Consultant together
with interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code.
(iii) The Consultant shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would
result in an Underpayment and would require the payment by the Company
of an additional Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than 10 business days after the
Consultant is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Consultant shall not pay such claim prior to
the expiration of the 30 calendar day period following the date on
which the Consultant gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Consultant in writing
prior to the expiration of such period that it desires to contest such
claim, the Consultant shall:
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(A) give the Company any information reasonably
requested by the Company relating to such claim,
(B) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(C) cooperate with the Company in good faith in order
effectively to contest such claim, and
(D) permit the Company to participate in any
proceeding relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Consultant harmless, on an
after-tax basis, for any Excise Tax or income or employment tax (including
interest and penalties with respect thereto) imposed as a result of such
proceeding and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 8(e), the Company shall control all
proceedings taken in connection with such contest, provided that the Company's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and Consultant shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(f) Other Termination Benefits. In the case of any of the foregoing
terminations the Consultant or his estate shall also be entitled to:
(i) the balance of any incentive awards due for performance
periods which have been completed, but which have not yet been paid;
(ii) any expense reimbursements due the Consultant;
(iii) with respect to the Consultant only, (A) tax preparation
and financial counseling services for the period beginning on the date
of termination and ending on the Termination Date (plus a gross-up for
all applicable taxes payable in connection with the provisions of such
services, but only if such gross-up is provided to a senior executive
of the Company); (B) primary personal use of the Company airplane, on
the economic terms set forth in Section 7(c), for the period beginning
on the date of termination and ending on the Termination Date; and (C)
continued payment by the Company when due of the premiums for the
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Senior Management Universal Life Insurance Policy provided under
Section 7 of this Agreement, and a gross-up for all federal taxes
payable in connection with the payment of such premiums, for the period
beginning on the date of termination and ending on the Termination
Date;
(iv) with respect to the Consultant only, Home Office Support
for the period beginning on the date of termination and ending on the
date that is two years after the Termination Date; and
(v) other benefits, if any, in accordance with applicable
plans and programs of the Company and this Agreement.
(g) No Mitigation; No Offset. In the event of any termination of
service under this Section 8, the Consultant shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Consultant under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain.
(h) Nature of Payments. Any amounts due under this Section 8 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.
Section 9 . Confidential Information; Prohibited Public Statements;
Publicity.
(a) The Company (as hereinafter specially defined for purposes of
Sections 9 through 11 hereof), pursuant to the Consultant's performance of
consulting services hereunder, provides the Consultant access to and confides in
him business methods and systems, techniques and methods of operation developed
at great expense by the Company ("Trade Secrets") and which the Consultant
recognizes to be unique assets of the Company's business. The Consultant shall
not, during or at any time after the Term, directly or indirectly, in any manner
utilize or disclose to any person, firm, corporation, association or other
entity, except (i) where required by law, (ii) to directors, consultants or
employees of the Company in the ordinary course of his duties or (iii) during
his performance of consulting services as a consultant or serving as a member of
the Board for such use and disclosure as he shall reasonably determine to be in
the best interest of the Company: (A) any such Trade Secrets, (B) any sales
prospects, customer lists, products, research or data of any kind, or (C) any
information `relating to strategic plans, sales, costs, profits or the financial
condition of the Company or any of its customers or prospective customers, which
are not generally known to the public or recognized as standard practice in the
industry in which the Company shall be engaged. The Consultant further covenants
and agrees that he will promptly deliver to the Company all tangible evidence of
the knowledge and information described in (A), (B) and (C), above, prior to or
at the
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termination of the Consultant's service. For purposes of Sections 9, 10 and 11
hereof the term "Company" shall mean Comcast Corporation ("Comcast") as well as
(1) each of its more than fifty percent (50%) owned subsidiaries and (2) each
other entity in which Comcast directly or indirectly has a greater than ten
percent (10%) equity interest, the fair market value of which interest is in
excess of $50,000,000. In determining Comcast's equity interest for purposes of
this definition, any equity interest which Comcast has an option to purchase
shall be considered as owned by Comcast.
(b) Neither the Consultant nor the Company, its officers or directors
(collectively, the "Company Affiliated Entities") shall, either during or at any
time after the Term, directly or indirectly make any public statement (including
a private statement reasonably likely to be repeated publicly) reflecting
adversely on the Company Affiliated Entities or the Consultant, as the case may
be, or the business prospects of the Company, except for (i) such statements
which the Consultant may be required to make in the ordinary course of his
position as senior consultant to the Company or (ii) with respect to each of the
Consultant and the Company Affiliated Entities, as otherwise required by
applicable law.
(c) Neither the Consultant nor the Company Affiliated Entities shall
comment (including private statements reasonably likely to be repeated publicly)
on, or discuss the circumstances surrounding, this Agreement, except as mutually
agreed or as required by applicable law.
Section 10 . Noncompetition, Noninterference and Nonsolicitation.
(a) Subject to the geographic limitation of Section 10(b) hereof, the
Consultant, for the period beginning on the Effective Date and ending on the
Termination Date, shall not, directly or indirectly, on his behalf or on behalf
of any other person, firm, corporation, association or other entity, as an
employee or otherwise, engage in, or in any way be concerned with or negotiate
for, or acquire or maintain any ownership interest in any business or activity
which is the same as or competitive with that conducted by the Company at the
termination of his employment, or which was engaged in or developed by the
Company at any time during the term of the Employment Agreement for specific
implementation in the immediate future by the Company.
(b) The Consultant acknowledges that the Company is engaged in business
throughout the United States and in various foreign countries and that the
Company intends to expand the geographic scope of its activities. Accordingly
and in view of the nature of his position and responsibilities, the Consultant
agrees that the provisions of this Section shall be applicable to each state and
each foreign country, possession or territory in which the Company may be
engaged in business during the Term or the term of the Employment Agreement, or,
with respect to the Consultant's obligations following termination of his
employment
14
under the Employment Agreement, at the termination of his service or at any time
within the twelve-month period following the effective date of his termination
of employment under the Employment Agreement.
(c) The Consultant agrees that, for the period beginning on the
Effective Date and ending on the Termination Date, the Consultant will not,
directly or indirectly, for himself or on behalf of any third party at any time
in any manner, request or cause any of the Company's customers to cancel or
terminate any existing or continuing business relationship with the Company;
solicit, entice, persuade, induce, request or otherwise cause any employee,
officer or agent of the Company (other than clerical employees of the Company)
to refrain from rendering services to the Company or to terminate his or her
relationship, contractual or otherwise, with the Company; induce or attempt to
influence any supplier to cease or refrain from doing business or to decline to
do business with the Company; divert or attempt to divert any supplier from the
Company; or induce or attempt to influence any supplier to decline to do
business with any businesses of the Company as such businesses are constituted
immediately prior to the termination of employment under the Employment
Agreement.
(d) The Consultant agrees that, for the period beginning on the
Effective Date and ending on the Termination Date, the Consultant will not
directly or indirectly, for himself or on behalf of any third party, solicit for
business in competition with the business of the Company, accept any business in
competition with the business of the Company from or otherwise do, or contract
to do, business in competition with the business of the Company with any person
or entity who, at the time of, or any time during the twelve (12) months
preceding such termination, was an active customer or was actively solicited by
the Company according to the books and records of the Company and within the
knowledge, actual or constructive, of the Consultant.
(e) Notwithstanding anything to the contrary in this Section 10, the
prohibitions and agreements contained in subsections 10(a), 10(c), and 10(d)
shall terminate immediately upon any termination of Consultant's service
hereunder following a Change in Control.
(f) Notwithstanding the foregoing, if, following the Term, the
Consultant engages in any behavior that would be prohibited under this Section,
as determined by the Company in its sole discretion, the Company shall be
relieved of its obligations under Section 8(f)(iv) of this Agreement.
(g) Nothing in this Section 10 shall prohibit the Consultant from being
a passive owner of not more than one percent of the outstanding common stock,
capital stock and equity of any firm, corporation, or enterprise so long as the
Consultant has no active participation in the management of the business of such
firm, corporation or enterprise.
15
Section 11 . Equitable Remedies.
The Consultant acknowledges that his compliance with the covenants in
Sections 9 and 10 of this Agreement is necessary to protect the good will and
other proprietary interests of the Company and that, in the event of any
violation by the Consultant of the provisions of Section 9 or 10 of this
Agreement, the Company will sustain serious, irreparable and substantial harm to
its business, the extent of which will be difficult to determine and impossible
to remedy by an action at law for money damages. Accordingly, the Consultant
agrees that, in the event of such violation or threatened violation by the
Consultant, the Company shall be entitled to any injunction before trial from
any court of competent jurisdiction as a matter of course and upon the posting
of not more than a nominal bond in addition to all such other legal and
equitable remedies as may be available to the Company. The Consultant further
agrees that, in the event any of the provisions of Sections 9 and 10 of this
Agreement are determined by a court of competent jurisdiction to be contrary to
any applicable statute, law or rule, or for any reason to be unenforceable as
written, such court may modify any of such provisions so as to permit
enforcement thereof as thus modified.
Section 12 . Resolution of Disputes.
Except as provided in Section 11, any disputes arising under or in
connection with this Agreement shall be resolved by third party mediation of the
dispute and, failing that, by binding arbitration, to be held in a location
mutually agreed to by the Parties, in accordance with the rules and procedures
of the American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Each
Party shall bear his or its own costs of the mediation, arbitration or
litigation, except that the Company shall bear all such costs if the Consultant
prevails in such mediation, arbitration or litigation on any material issue.
Section 13 . Indemnification.
(a) The Company agrees that if the Consultant is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director, officer or employee of the Company or is or
was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Consultant's alleged action
in an official capacity while serving as a director, officer, member, employee
or agent, the Consultant shall be indemnified and held harmless by the Company
to the fullest extent legally permitted or authorized by the Company's
certificate of incorporation or bylaws or resolutions of the Board or, if
greater, by the laws of the Commonwealth of
16
Pennsylvania, against all cost, expense, liability and loss (including, without
limitation, attorney's fees, judgments, fines, ERISA excise taxes or other
liabilities or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Consultant in connection therewith, and
such indemnification shall continue as to the Consultant even if he has ceased
to be a director, member, employee or agent of the Company or other entity and
shall inure to the benefit of the Consultant's heirs, executors and
administrators. The Company shall advance to the Consultant all reasonable costs
and expenses incurred by him in connection with a Proceeding within 20 calendar
days after receipt by the Company of a written request for such advance. Such
request shall include an undertaking by the Consultant to repay the amount of
such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
(b) Neither the failure of the Company (including its board of
directors, independent legal counsel or shareholders) to have made a
determination prior to the commencement of any Proceeding concerning payment of
amounts claimed by the Consultant under Section 13(a) above that indemnification
of the Consultant is proper because he has met the applicable standard of
conduct, nor a determination by the Company (including its board of directors,
independent legal counsel or shareholders) that the Consultant has not met such
applicable standard of conduct, shall create a presumption that the Consultant
has not met the applicable standard of conduct.
(c) The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering the Consultant which is no less
favorable than the policy covering senior officers of the Company.
Section 14 . Assignability; Binding Nature. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs (in the case of the Consultant) and assigns. Rights or
obligations of the Company under this Agreement may be assigned or transferred
by the Company pursuant to a merger or consolidation in which the Company is not
the continuing entity, or the sale or liquidation of all or substantially all of
the assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it shall take whatever
action it reasonably can in order to cause such assignee or transferee to
expressly assume the liabilities, obligations and duties of the Company
hereunder. No rights or obligations of the Consultant under this Agreement may
be assigned or transferred by the Consultant other than his rights to
compensation and benefits, which may be transferred only by will or operation of
law.
17
Section 15 . The Consultant's Independence and Discretion.
(a) Nothing herein contained shall be construed to constitute the
Parties hereto as partners or as joint venturers, or either as agent of the
order, or as employer and employee. By virtue of the relationship described
herein the Consultant's relationship to the Company during the Term shall only
be that of an independent contractor and the Consultant shall perform all
services pursuant to this Agreement as an independent contractor. The Consultant
shall not provide any services under the Company's business name, except as
requested hereunder, and shall not present himself as an employee of the
Company.
(b) Subject only to such specific limitations as are contained in this
Agreement, the manner, means, details or methods by which the Consultant
performs his obligations under this Agreement shall be solely within the
discretion of the Consultant. The Company shall not have the authority to, nor
shall it, supervise, direct or control the manner, means, details or methods
utilized by the Consultant to perform his obligations under this Agreement and
nothing in this Agreement shall be construed to grant the Company any such
authority.
(c) To the extent consistent with applicable law, the Company will not
withhold any amounts as federal income tax withholding from wages or as employee
contributions under the Federal Insurance Contributions Act or any other state
or federal laws. The Consultant shall be solely responsible for payment of any
required employment taxes or contributions.
Section 16 . Representation. The Company represents and warrants that
it is fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization. The Consultant
represents that the performance of his obligations under this Agreement will not
violate any agreement between him and any other person, firm or organization
that would be violated by the performance of his obligations under this
Agreement.
Section 17 . Entire Agreement. This Agreement, together with the First
Amendment, contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto, except, without duplication, for
those provisions of the Employment Agreement that would otherwise survive the
termination of such Employment Agreement. The Consultant acknowledges that,
except as provided herein, he shall not be entitled to any other payment,
benefits or prerequisites from the Company or any of its subsidiaries on account
of his former employment by, or his retirement from, the Company, except that
the
18
Consultant shall be entitled to any benefits due to him as a retired employee
under the Company's employee benefit plans.
Section 18 . Amendment or Waiver. No provision in this Agreement may be
amended unless such amendment is agreed to in writing and signed by the
Consultant and an authorized officer of the Company. No waiver by either Party
of any breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Consultant or
an authorized officer of the Company, as the case may be.
Section 19 . Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law so as to achieve the purposes of this Agreement.
Section 20 . Survivorship. Except as otherwise expressly set forth in
this Agreement, the respective rights and obligations of the Parties hereunder
shall survive any termination of the Consultant's service. This Agreement itself
(as distinguished from the Consultant's service) may not be terminated by either
Party without the written consent of the other Party.
Section 21 . References. In the event of the Consultant's death or a
judicial determination of his incompetence, reference in this Agreement to the
Consultant shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.
Section 22 . Governing Law; Jurisdiction. This Agreement shall be
governed in accordance with the laws of the State of New York without reference
to principles of conflict of laws.
Section 23 . Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally, (b) sent by certified or registered mail, postage prepaid,
return receipt requested or (c) delivered by overnight courier (provided that a
written acknowledgment of receipt is obtained by the overnight courier) to the
Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:
If to the Company: Comcast Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: General Counsel
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If to the Consultant: Mr. C. Xxxxxxx Xxxxxxxxx
c/o Comcast Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Section 24 . Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
Section 25 . Counterparts. This Agreement may be executed in
counterparts.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on May
26, 2004 as of the date first written above.
COMCAST CORPORATION
By: /s/Xxxxxx X. Block
-----------------------------------------
Name: Xxxxxx X. Block
Title: Senior Vice President,
General Counsel and
Secretary
/s/ C. Xxxxxxx Xxxxxxxxx
-----------------------------------------
C. Xxxxxxx Xxxxxxxxx
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EXHIBIT A
---------
DIRECTORSHIPS
Citigroup, Inc.
HCA, Inc.
22
EXHIBIT B
---------
1. Performance Shares: The 2002 grant of performance shares was converted
into Company performance shares and AT&T stock units, pursuant to the
terms of the EBA and the Merger Agreement. Company performance shares
and AT&T stock units will vest on the Effective Date. Company
performance shares will be paid out at target as soon as practicable
after the Effective Date. The form of payout will be at least 50% in
cash, based on the Fair Market Value of Stock on the day immediately
preceding the Effective Date, and the remaining portion of the payment
will be in Stock. The AT&T stock unit portion of the award will be paid
out in cash based on the Fair Market Value of AT&T common stock on the
day immediately preceding the Effective Date.
2. Stock Options: Unvested options granted to the Consultant prior to
November 18, 2002 shall vest in full on the Effective Date and all
options granted prior to November 18, 2002 shall remain exercisable
until the end of their originally scheduled ten-year terms.
3. Change in Control: Options granted to the Consultant on or after
November 18, 2002 shall vest upon a Change in Control.
23
