COMPENSATION AND DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made as of the 16th day of December, 1997,
by and between COMCAST CORPORATION, a Pennsylvania corporation (the "Company,"
as further defined in Section 12), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇").
R E C I T A L S
WHEREAS, ▇▇▇▇▇▇▇ has been employed by the Company since he
founded the Company in 1969 and is currently Chairman of the Board of Directors;
and
WHEREAS, ▇▇▇▇▇▇▇ and the Company entered into a Compensation
and Deferred Compensation Agreement and Stock Appreciation Bonus Plan, as of
September 9, 1993, as amended and restated March 16, 1994 (the "1993
Agreement"), which was approved by the Company's shareholders on June 22, 1994;
and
WHEREAS, certain employment and compensation terms of the 1993
Agreement expire on December 31, 1997; and
WHEREAS, the Company's Board of Directors (the "Board") as
well as the Board's Compensation Committee (the "Compensation Committee") and
its Subcommittee on Performance-Based Compensation (the "Subcommittee")
recognize that ▇▇▇▇▇▇▇' contribution to the growth and success of the Company
has continued to be substantial throughout the term of the 1993 Agreement 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
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successfully consummated the many strategic transactions that have closed during
the term of the 1993 Agreement;
WHEREAS, the Board desires to assure the Company of ▇▇▇▇▇▇▇'
continued employment in an executive or consultative capacity and to compensate
him therefore; and
WHEREAS, the Company's shareholders approved a 1996 Executive
Cash Bonus Plan on June 18, 1997 (the "Cash Bonus Plan"); and
WHEREAS, the Board has established the Subcommittee as a
subcommittee of its Compensation Committee comprised of two outside directors
and which has the responsibility for establishing the criteria for the payment
of performance-based compensation to ▇▇▇▇▇▇▇ and the Company's other senior
executive officers; and
WHEREAS, ▇▇▇▇▇▇▇ is currently a participant in the Company's
1992 Executive Split-Dollar Insurance Plan (the "1992 Split-Dollar Plan") and
its 1994 Executive Split-Dollar Insurance Plan (together, the "1992 and 1994
Split-Dollar Plans"), each of which provides a death benefit to the ▇▇▇▇▇▇▇
family following the death of the last survivor of ▇▇▇▇▇▇▇ and his spouse and a
repayment of all amounts advanced by the Company on behalf of ▇▇▇▇▇▇▇ and his
spouse for the purpose of assisting ▇▇▇▇▇▇▇ to maintain in force the life
insurance policies issued thereunder; and
WHEREAS, in accordance with the 1993 Agreement, the Company
has increased the life insurance protection provided for the ▇▇▇▇▇▇▇ family
pursuant to the 1992 Split-Dollar Plan; and
WHEREAS, in the 1993 Agreement the Company also agreed to
extend its premium payment obligations under the 1992 Split-Dollar Plan until
the death of the survivor of ▇▇▇▇▇▇▇ and his spouse and to pay an additional
annual bonus until the death of their survivor in an amount that
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takes into account the owner's share of the applicable insurance premiums and
the income and gift taxes attributable thereto; and
WHEREAS, ▇▇▇▇▇▇▇ and the Company have entered into a 1996
Split-Dollar Life Insurance Agreement (the "1996 Split-Dollar Agreement"), which
provides a death benefit to the ▇▇▇▇▇▇▇ family following ▇▇▇▇▇▇▇' death and a
repayment of all amounts advanced by the Company on behalf of ▇▇▇▇▇▇▇ for the
purpose of assisting ▇▇▇▇▇▇▇ to maintain in force the life insurance policies
issued thereunder; and
WHEREAS, ▇▇▇▇▇▇▇, in preference to other forms of compensation
and incentive compensation, wishes to provide additional life insurance
protection for his family following the death of the last survivor of ▇▇▇▇▇▇▇
and his spouse and the Committee has determined that it would be in the
Company's best interests to provide such additional protection; and
WHEREAS, in order to provide this additional insurance
protection ▇▇▇▇▇▇▇ and the Compensation Committee, upon receiving the advice of
management compensation consulting firms, have agreed that the Company will
increase the insurance protection for the ▇▇▇▇▇▇▇ family under a split-dollar
arrangement pursuant to which it will (a) continue its current practice of
providing an additional bonus to ▇▇▇▇▇▇▇ (and his surviving spouse, if any) with
respect to the portion of the premiums payable by the owner of the insurance
policies and (b) provide that such additional bonus shall also take into account
the income and gift taxes payable on such bonus; and
WHEREAS, ▇▇▇▇▇▇▇ and the Company wish to confirm their
continuing rights and obligations under all of their existing agreements,
including the 1993 Agreement; and
WHEREAS, ▇▇▇▇▇▇▇ is willing to commit himself to serve the
Company on the terms herein provided;
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NOW THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements of the parties herein contained, the parties
hereto agree as follows:
1. Continued Service to the Company; Effect of Service Period
Termination.
1.1 The Company hereby agrees to retain ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
hereby agrees to continue to serve the Company, on the terms and conditions set
forth herein, for a term commencing on the date hereof and expiring on December
31, 2002 (unless ▇▇▇▇▇▇▇' services are sooner terminated as hereinafter set
forth) (the "Service Period").
1.2 Except as specifically provided herein, the termination of
▇▇▇▇▇▇▇' services under Section 4 shall not affect the parties' continuing
rights and obligations under this Agreement. As more specifically provided in
Sections 6, 13 and 23.1 hereof, the termination of ▇▇▇▇▇▇▇' services under
Section 4 also shall not affect the Company's continuing obligations under the
1993 Agreement and the other Pre-Existing Agreements (as defined in Section 6).
2. Position and Duties. During the Service Period:
2.1 ▇▇▇▇▇▇▇ shall serve as the Chairman of the Board, or such
other officer position as agreed to by ▇▇▇▇▇▇▇ and the Company (unless he
chooses to withdraw from such position in connection with his making a
Consultant Election described in Section 3.2), and, in such position, he shall
have such powers and duties as may from time to time be prescribed by the Board
in accordance with Section 4-6 of the Company's By-Laws.
2.2 As long as ▇▇▇▇▇▇▇ retains his executive status, he shall
continue to devote substantially all of his working time and effort to the
business and affairsI of the Company. It is recognized that ▇▇▇▇▇▇▇ has outside
interests, including, but not limited to, serving as a director
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on the boards of other corporations and that ▇▇▇▇▇▇▇ may devote a reasonable
amount of time to such outside interests.
2.3 ▇▇▇▇▇▇▇ may at any time, upon thirty (30) days notice to the
Company, elect to change his position from that of an executive to that of
consultant to the Company, without any executive duties. Such an election shall
be referred to as the "Consultant Election." If ▇▇▇▇▇▇▇ makes the Consultant
Election, he shall thereafter devote such time as may be necessary for the
performance of those duties which are reasonably requested by the Company.
2.4 In connection with his service as an executive or a
consultant to the Company, ▇▇▇▇▇▇▇ shall be based at the Company's principal
executive offices in the Delaware Valley.
2.5 The provisions of this Section 2 shall not prevent ▇▇▇▇▇▇▇
from investing his assets in such form and manner as he chooses; provided,
however, that ▇▇▇▇▇▇▇ shall not have any personal interest, direct or indirect
(other than through the Company or its subsidiaries), financial or otherwise, in
any supplier to, buyer from, or competitor of the Company unless such interest
is, or arises solely from ownership of, less than two percent (2%) of the
outstanding capital stock of such supplier, buyer or competitor and such capital
stock is available to the general public through trading on any national,
regional or over-the-counter securities market.
3. Compensation and Related Matters.
3.1 Base Payment. For each full year included in the Service
Period the Company shall pay ▇▇▇▇▇▇▇ a base payment ("Base Payment") for all
services to be rendered each year by ▇▇▇▇▇▇▇ as an executive or a consultant
hereunder of One Million Dollars ($1,000,000) per annum (less appropriate
deductions), payable in installments at such times as the Company
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customarily pays its senior executive officers (but in any event no less often
than monthly). Effective as of each January 1 (beginning in 1999) or such other
date as may be determined by the Compensation Committee, the Compensation
Committee shall adjust ▇▇▇▇▇▇▇' Base Payment in order to reflect the greater of
(i) increases subsequent to 1997 in the Consumer Price Index for all urban
consumers published by the United States Department of Labor or (ii) the average
percentage increase in the base compensation of the five (5) employees of the
Company having the highest base compensation (other than ▇▇▇▇▇▇▇) for the
preceding year. Once established at an increased annual rate, ▇▇▇▇▇▇▇' Base
Payment hereunder shall not thereafter be reduced unless such reduction is
pursuant to an overall plan to reduce the salaries of all the senior executive
officers of the Company.
3.2 Performance-Based Compensation under Cash Bonus Plan. For
each full year in the Service Period during which ▇▇▇▇▇▇▇ remains an executive
of the Company, he shall be entitled to an annual performance-based cash bonus
("Cash Bonus") of up to 50% of the Base Payment, determined in accordance with,
and upon satisfaction of, the performance-based standards contained in the Cash
Bonus Plan.
3.3 Expenses. During the Service Period, ▇▇▇▇▇▇▇ shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
him (in accordance with the policies and procedures established from time to
time by the Board for its senior executive officers) in performing services
hereunder, provided that ▇▇▇▇▇▇▇ properly accounts therefor in accordance with
Company policy.
3.4 1997 Split-Dollar Agreement. The Company shall acquire and
maintain additional survivorship life insurance protection for the benefit of
the ▇▇▇▇▇▇▇ family in accordance with the terms of a separate split-dollar
insurance agreement to be executed by the
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Company and ▇▇▇▇▇▇▇ (the "1997 Split-Dollar Agreement"), which in all material
respects shall be similar to the form of agreement attached hereto as Appendix
A. The additional insurance shall provide survivorship life insurance protection
to the ▇▇▇▇▇▇▇ family in an amount equal to Twenty Million Dollars ($20,000,000)
(based on actuarial assumptions in the applicable policies relating to the
expected joint lives of the insureds). This increase shall in no way affect the
obligation to repay to the Company all loans which it has advanced and will
advance in the future pursuant to the Split- Dollar Arrangements. In the event
the additional insurance required hereunder is unavailable, or in the event the
terms on which it may be available become too onerous, in the mutual
determination of the Company and ▇▇▇▇▇▇▇, the Company shall satisfy the
obligations contained in this Section 3.4 by providing cash benefits or other
valuable consideration, acceptable in amount and form to ▇▇▇▇▇▇▇.
3.5 Other Benefits. Except as otherwise specifically provided
herein, ▇▇▇▇▇▇▇ shall continue to be eligible to participate in all employee
benefit plans and arrangements in effect on the date of this Agreement and shall
continue to obtain benefits thereunder, including, without limitation, each plan
or program for key executives, each bonus plan, savings and profit sharing plan,
supplemental pension and retirement plan, stock ownership plan, stock purchase
plan, stock option plan, life insurance plan, medical insurance plan, disability
plan, dental plan and health- and-accident plan. Except as otherwise provided
herein or as required by law, the Company shall not make any changes in any such
employee benefit plans or arrangements which would adversely affect ▇▇▇▇▇▇▇'
rights or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executives of the Company and does not result in a
proportionately greater reduction in the rights of or benefits to ▇▇▇▇▇▇▇ as
compared with any executive of the Company.
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▇▇▇▇▇▇▇ shall be entitled to participate in or receive benefits under any
employee benefit plan or arrangement made available by the Company in the future
to its most senior executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plan or arrangement. No amount paid to ▇▇▇▇▇▇▇ under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the annual Base Payment payable to ▇▇▇▇▇▇▇ pursuant to Section 3.1. In
the event any benefit provided for in this Section 3.5 is not able to be granted
to ▇▇▇▇▇▇▇ because he has become a consultant to the Company, the Company will
provide ▇▇▇▇▇▇▇ with benefits having comparable benefits and value on an
after-tax basis.
3.6 Vacations. ▇▇▇▇▇▇▇ shall be entitled to not fewer than the
same number of paid vacation days in each calendar year as he is currently
entitled. ▇▇▇▇▇▇▇ shall also be entitled to all paid holidays given by the
Company to its senior executive officers.
3.7 Perquisites. So long as he serves as Chairman of the Board or
other officer position, ▇▇▇▇▇▇▇ shall be entitled to continue to receive the
perquisites and fringe benefits appertaining to the office of the Chairman of
the Board in accordance with the Company's present practice.
3.8 Deferred Compensation. As long as ▇▇▇▇▇▇▇ and the Company so
agree in writing prior to December 31 of any calendar year (or such earlier date
as may be required by the Company's 1996 Deferred Compensation Plan), and to the
extent so agreed, the payment of all or any portion of the compensation payable
to ▇▇▇▇▇▇▇ in the next following calendar year (including, without limitation,
(i) any tax grossed-up bonus payable to ▇▇▇▇▇▇▇ to cover taxes attributable to
appreciation in ▇▇▇▇▇▇▇' nonqualified stock options under the 1993 Agreement,
(ii)
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any tax grossed-up bonus payable to ▇▇▇▇▇▇▇ to cover the owner's share of the
any life insurance premiums subject to the Split-Dollar Arrangements (as defined
in Section 3.10(i)), and (iii) any compensation payable in such year by reason
of having been deferred from a prior year pursuant to an election made prior to
June 30 of the year prior to the year of distribution in accordance with Section
3.6.2 of the 1996 Deferred Compensation Plan) shall be deferred to a subsequent
calendar year selected by ▇▇▇▇▇▇▇ and agreed to by the Company. Once a deferral
has been agreed to pursuant to this Section 3.8, the deferred amount shall be
subject to the same terms and conditions as apply to deferrals under the
Company's 1996 Deferred Compensation Plan, including, without limitation, the
crediting of interest.
3.9 Supplemental Executive Retirement Plan. In lieu of the Cash
Bonus provided in Section 3.2, if ▇▇▇▇▇▇▇ becomes a consultant to the Company,
his employment with the Company will terminate on the day before becoming a
consultant for purposes of determining his entitlement to a Normal Retirement
Pension under Article III of the Company's Supplemental Executive Retirement
Plan adopted by the Company on July 31, 1989 (the "SERP"). Each year thereafter
the amount of ▇▇▇▇▇▇▇' Normal Retirement Pension shall be recalculated by
adjusting the amount of his final average compensation to take into account one
hundred fifty percent (150%) of the amount he has received from the Company for
the year as compensation for performing his duties as a consultant under Section
2 of this Agreement; provided, however, that the benefit payable under the SERP
for any calendar year shall not exceed the maximum Cash Bonus that ▇▇▇▇▇▇▇ could
have received for that year if he had remained an executive for the entire year.
For purposes of the definition of final average compensation in Section 2.8 of
the SERP, the date on which ▇▇▇▇▇▇▇ ceases to perform any duties as an executive
or a consultant under Section 2 of this Agreement shall
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be considered his termination of employment date. In the event ▇▇▇▇▇▇▇ dies
while a consultant for the Company: (i) his surviving spouse shall be entitled
to receive an annual death benefit for her lifetime equal to 100% of the annual
pension ▇▇▇▇▇▇▇ was receiving immediately prior to his death; and (ii) for
purposes of Sections 7.2 and 7.4 (relating to the payment of benefits to an
executive's surviving spouse, ▇▇▇▇▇▇▇' death shall be treated as having occurred
before the commencement of his Normal Retirement Pension (as defined therein)
while employed by the Company.
3.10 Funding of Trust.
3.10.1 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 ▇▇▇▇▇▇▇ or his family. The trust document for the Trust shall be in a
form that is satisfactory to both the Company and ▇▇▇▇▇▇▇, and may, but need
not, be in substantially the same form as the model trust agreement published by
the Internal Revenue Service in Revenue Procedure 92-64. The trustee of the
Trust shall be such person or institution acceptable both to the Company and
▇▇▇▇▇▇▇. The Company shall contribute such amounts in cash or such assets as it
deems appropriate for the purpose of funding the deferred compensation and/or
death benefits payable under the terms of this Agreement and such other deferred
compensation or insurance plans or arrangements that may be in effect. Upon the
occurrence of a Change of Control, the Trust, if not already irrevocable, shall
become irrevocable. In addition, upon the occurrence of a Change of Control, the
Company shall be required to contribute to the Trust an amount equal to the
present value of:
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(i) the remaining premiums that the Company is obligated to
pay until the death of the survivor of ▇▇▇▇▇▇▇ and his spouse to each insurance
company that has issued a policy providing a death benefit to the ▇▇▇▇▇▇▇ family
in connection with a split dollar insurance plan or agreement between the
Company and ▇▇▇▇▇▇▇, including but not limited to the 1992 and 1994 Split-Dollar
Plans, the applicable provisions of the 1993 Agreement, the 1996 Split-Dollar
Agreement, the 1997 Split-Dollar Agreement and this Agreement, including Section
7 hereof (collectively, the "Split-Dollar Arrangements");
(ii) the bonuses and tax grossed-up amounts that the Company
is obligated to pay to ▇▇▇▇▇▇▇ or his surviving spouse pursuant to the split
dollar insurance plans and agreements between the Company and ▇▇▇▇▇▇▇, including
but not limited to the Split-Dollar Arrangements; and
(iii) all deferred compensation benefits payable to ▇▇▇▇▇▇▇
under the terms of any nonqualified deferred compensation arrangement in which
▇▇▇▇▇▇▇ is a participant, including, but not limited to, the Company's 1996
Deferred Compensation Plan, the SERP and this Agreement, including Sections 3.4
(in the event additional insurance is unavailable), 3.8 and 3.9 hereof
(collectively, the "Deferred Compensation Arrangements"); where for this purpose
the present value shall be calculated using the actuarial lives provided under
standard mortality tables and a discount factor equal to the then current yield
to maturity on ten (10) year obligations of the Treasury of the United States.
3.10.2 In addition, the Company shall have the further
obligation following a Change of Control to make such additional contributions
to the Trust, from time to time (but determined no less than annually), as may
become necessary to fully fund the benefits described
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above, determined in the same manner as the initial funding obligation is
determined. The assets contributed to the Trust shall, except to the extent
otherwise provided in the trust agreement in the case of the bankruptcy or
insolvency of the Company, be used exclusively for the purpose of provide to
▇▇▇▇▇▇▇ the benefits described above until all such benefits have been fully
paid, at which time the Trust may be terminated and any remaining assets revert
back to the Company. Notwithstanding the foregoing, to the extent benefits are
paid by the Company rather than out of assets held in the Trust, the trustee may
reimburse the Company out of the Trust such amounts as have been properly paid
as benefits to ▇▇▇▇▇▇▇ or to his surviving spouse by the Company, but only to
the extent that such reimbursement does not cause the Trust to be less than
fully funded, determined in the same manner as the initial funding obligation is
determined.
3.10.3 For purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred on the date that persons other than ▇▇▇▇▇▇▇ and
members of his immediate family (or trusts for their benefit) first acquire more
than fifty (50) percent of the voting power over voting shares of the Company.
4. Termination. ▇▇▇▇▇▇▇' services hereunder may be terminated without
any breach of this Agreement only under the following circumstances:
4.1 Death. ▇▇▇▇▇▇▇' services hereunder shall terminate upon his
death.
4.2 Disability. If, as a result of ▇▇▇▇▇▇▇' incapacity due to
physical or mental illness, ▇▇▇▇▇▇▇ shall have been absent from his duties
hereunder for 180 consecutive calendar days, and within thirty (30) days after
written notice of termination is given (which may occur before or after the end
of such 180 day period), shall not have returned to the performance of
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his duties hereunder on the basis provided for in Sections 1 and 2 hereof, the
Company may terminate ▇▇▇▇▇▇▇' services hereunder.
4.3 Cause. The Company may terminate ▇▇▇▇▇▇▇' services hereunder
for Cause. For purposes of this Agreement, the Company shall have "Cause" to
terminate ▇▇▇▇▇▇▇' services hereunder upon (A) the willful and continued failure
by ▇▇▇▇▇▇▇ either to substantially perform his duties hereunder or to comply
with the provisions of the Company's Code of Ethics and Business Conduct (other
than a failure following a Change of Control, as defined in Section 3.10.3, or a
failure resulting from ▇▇▇▇▇▇▇' incapacity due to physical or mental illness)
for a period of sixty (60) days after demand for substantial performance or
compliance is delivered by the Company specifically identifying the manner in
which the Company believes ▇▇▇▇▇▇▇ has not substantially performed his duties or
has not complied; or (B) the willful engaging by ▇▇▇▇▇▇▇ in misconduct which is
materially injurious to the Company, monetarily or otherwise, or (C) the willful
breach by ▇▇▇▇▇▇▇ either during or after the Service Period of any material
provision of this Agreement, including, but not limited to, Sections 9, 10 and
11 hereof. For purposes of this paragraph, no act, or failure to act, on
▇▇▇▇▇▇▇' part shall be considered "willful" unless done, or omitted to be done,
by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
▇▇▇▇▇▇▇ shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to ▇▇▇▇▇▇▇ a copy of a resolution, duly adopted
by the affirmative vote of not less than two-thirds of the entire membership of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice to ▇▇▇▇▇▇▇ and an opportunity for him, together with his
counsel, to be heard before the Board), finding
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that in the good faith opinion of the Board ▇▇▇▇▇▇▇ was guilty of conduct set
forth above in clause (A), (B), or (C) of the preceding sentence, and specifying
the particulars thereof in detail.
4.4 Notice of Termination. Any termination of ▇▇▇▇▇▇▇' services
by the Company shall be communicated by written Notice of Termination to
▇▇▇▇▇▇▇. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of ▇▇▇▇▇▇▇' services under the
provision so indicated.
4.5 Date of Termination. "Date of Termination" shall mean (i) if
▇▇▇▇▇▇▇' services are terminated by his death, the date of his death, (ii) if
▇▇▇▇▇▇▇' services are terminated pursuant to Section 4.2, hereof, thirty (30)
days after Notice of Termination is given (provided that ▇▇▇▇▇▇▇ shall not have
returned to the performance of his duties on the basis provided for in Section 2
hereof during such thirty (30) day period) or (iii) if ▇▇▇▇▇▇▇' services are
terminated pursuant to Section 4.3 hereof, the date specified in the Notice of
Termination; provided that if within thirty (30) days after a Notice of
Termination is given the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding and final arbitration
award or by a final judgment, order or decree of a court of competent
jurisdiction (the time of appeal therefrom having expired and no appeal having
been perfected).
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5. Compensation Upon Termination or During Disability.
5.1 If during the Service Period ▇▇▇▇▇▇▇' services as an
executive or a consultant shall be terminated by reason of his death, the
Company shall continue to pay to ▇▇▇▇▇▇▇' surviving spouse, if any, ▇▇▇▇▇▇▇'
then Base Payment, on a monthly basis for a period of five (5) years, provided
that the payments to ▇▇▇▇▇▇▇' surviving spouse shall cease with the payment due
immediately following her death. This death benefit shall be in addition to (x)
the Company's obligation to provide to ▇▇▇▇▇▇▇' spouse during her lifetime all
health plan benefits which are available from time to time to the Company's
highest paid employee, and (y) any other payments ▇▇▇▇▇▇▇' spouse, beneficiaries
or estate may be entitled to receive pursuant to this Agreement (including, but
not limited to, ▇▇▇▇▇▇▇' Cash Bonus with respect to any period then ended which
would have accrued to him on the basis of the Company's performance but which
has not yet been paid (the "Accrued Cash Bonus")), as well as under any Deferred
Compensation Arrangements, Split-Dollar Arrangements or any other pension or
employee benefit plans (collectively these arrangements and plans shall be
referred to herein as the "Benefit Plans").
5.2 During any period that ▇▇▇▇▇▇▇ fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, ▇▇▇▇▇▇▇
shall continue to receive his Base Payment until his services are terminated
pursuant to Section 4.2 hereof or until the end of the Service Period, whichever
occurs first, as well as any other payments he may be entitled to receive
pursuant to this Agreement (including, but not limited to, his Accrued Cash
Bonus) or any Benefit Plans. After termination pursuant to Section 4.2 hereof,
▇▇▇▇▇▇▇ shall be paid for five (5) years, on a monthly basis, an annual amount
equal to his Base Payment at the rate in effect at the time the Notice of
Termination is given, as well as any other amounts he may be entitled to receive
pursuant
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to this Agreement or any Benefit Plans. In the event ▇▇▇▇▇▇▇ dies before the end
of the five (5) year payment period, his surviving spouse, if any, shall be
entitled to receive (i) the remaining payments for the period as a death
benefit, provided that these payments shall cease with the payment due
immediately following her death; and (ii) all benefits described in the last
sentence of Section 5.1 hereof, as if ▇▇▇▇▇▇▇' services had been terminated by
reason of his death.
5.3 If ▇▇▇▇▇▇▇' services shall be terminated for Cause, the
Company shall pay ▇▇▇▇▇▇▇ his Base Payment due through the Date of Termination
at the rate in effect at the time the Notice of Termination is given and the
Company shall have no further obligation to ▇▇▇▇▇▇▇ under this Agreement,
including, but not limited to, the obligation to make the payments provided for
in Sections 3 and 7 hereof.
5.4 If, in breach of this Agreement, the Company shall terminate
▇▇▇▇▇▇▇' services other than pursuant to Section 4.2 or 4.3 hereof (it being
understood that a purported termination pursuant to Section 4.2 or 4.3 hereof
which is disputed and finally determined not to have been proper shall be a
termination by the Company in breach of this Agreement), then,
(i) the Company shall pay ▇▇▇▇▇▇▇ his Base Payment through
the Date of Termination at the rate in effect at the time the Notice of
Termination is given as well as any other amount, including his Cash Bonus, with
respect to any period then ended which would have accrued to ▇▇▇▇▇▇▇ on the
basis of the Company's performance but which has not yet been paid to him;
(ii) subsequent to the Date of Termination, the Company
shall pay as severance pay to ▇▇▇▇▇▇▇ on a monthly basis (or, in the case of his
Cash Bonus, on the basis provided in the Cash Bonus Plan) for the remaining
Service Period an annual amount equal to
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▇▇▇▇▇▇▇' Base Payment at the highest annual rate in effect at any time during
the portion of the Service Period immediately preceding the Date of Termination
and his Cash Bonus; provided that should ▇▇▇▇▇▇▇ die before the end of the
Service Period, ▇▇▇▇▇▇▇' surviving spouse shall be entitled to the death benefit
provided in Section 5.1 hereof, and all benefits described in the last sentence
of Section 5.1 hereof, as if ▇▇▇▇▇▇▇' services had been terminated by reason of
his death; and
(iii) the Company shall maintain in full force and effect
for the continued benefit of ▇▇▇▇▇▇▇ (and for his surviving spouse, as provided
in paragraph (ii) above) for the remaining Service Period all (x) health plan
benefits available from time to time to the Company's highest paid employee, and
(y) employee benefit plans and programs in which ▇▇▇▇▇▇▇ was entitled to
participate immediately prior to the Date of Termination, including, without
limitation, the Benefit Plans.
5.5 ▇▇▇▇▇▇▇ shall not be required to mitigate the amount of any
payment provided for in this Section 5 by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Section 5 be reduced by
any compensation earned by ▇▇▇▇▇▇▇ as a result of employment by another employer
after the Date of Termination, or otherwise.
5.6 Notwithstanding anything herein to the contrary, in the event
▇▇▇▇▇▇▇' services are terminated on or after the occurrence of a Change of
Control, as defined in Section 3.10, such termination shall in no circumstances
be treated under the terms of this Agreement as a termination for Cause, and
▇▇▇▇▇▇▇ shall be entitled to the same benefits as are payable with respect to a
termination of ▇▇▇▇▇▇▇' services subject to the provisions of Section 5.4.
6. Pre-Existing Agreements. ▇▇▇▇▇▇▇ has entered into certain
agreements with the Company providing for the deferral of income and the
maintenance of life insurance protection
-17-
for the ▇▇▇▇▇▇▇ family, and he is a participant in a supplemental retirement
plan and several split- dollar life insurance plans maintained by the Company.
Each of these agreements and plans (the "Pre-Existing Agreements") pre-date this
Agreement. The parties hereto intend that the Pre-Existing Agreements shall
remain in full force and effect and, except as expressly provided in this
Agreement, the Company's obligations and liabilities thereunder shall not be
affected in any way by the Company and ▇▇▇▇▇▇▇ entering into this Agreement or
by the termination of the Service Period.
7. Split-Dollar Arrangements.
7.1 Except as otherwise provided in Section 5.3 (relating to a
termination for Cause), the Company shall satisfy during the Service Period and
continue to satisfy thereafter its obligations under the Split-Dollar
Arrangements for all benefits granted to ▇▇▇▇▇▇▇ to date or hereunder,
cumulatively, including, but not limited to, the payment of its share of the
annual premium, and it shall also provide for the payment of an annual bonus to
▇▇▇▇▇▇▇ or his spouse, as more fully described in Section 7.2 hereof, until the
death of the last survivor of ▇▇▇▇▇▇▇ and his spouse. The form and amount of
death benefit and the method of financing the payment of premiums available to
▇▇▇▇▇▇▇ and his family under the 1992 and 1994 Split-Dollar Plans shall be
continued by the Company in a substantially similar manner even if the Company
terminates the 1992 and 1994 Split-Dollar Plans with respect to its other senior
executive officers.
7.2 The annual bonus referred to in Section 7.1 hereof shall be
equal to the sum of (x), (y) and (z), where:
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(x) equals the portion of each annual premium for the year
which must be paid by the owner of the insurance policies subject to any
Split-Dollar Arrangements (the "Insurance Policies");
(y) equals (i) the product of the portion of each annual
premium which must be paid by the owner of the Insurance Policies and the
highest marginal income tax rate, (ii) divided by one minus the highest marginal
income tax rate; provided that for this purpose the term "highest marginal
income tax rate" means 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, where 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 ▇▇▇▇▇▇▇ (or his surviving spouse, if applicable) in
connection with the deduction of state and local income taxes for federal income
tax purposes; and
(z) equals (i) the product of the highest marginal gift tax
rate and each annual premium which must be paid by the owner of the Insurance
Policies, (ii) divided by one minus the highest marginal gift tax rate; provided
that for this purpose the term "highest marginal gift tax rate" shall mean the
highest tax rate (including any surtax) imposed under Section 2001(c) of the
Internal Revenue Code of 1986, as amended, (or any successor provision) as
applied to gifts made in the calendar year in which such premium is paid.
8. Confidential Information. The Company (as hereinafter specially
defined for purposes of Sections 8, 9, 10 and 11 hereof), pursuant to ▇▇▇▇▇▇▇'
employment hereunder, provides
-19-
him 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 ▇▇▇▇▇▇▇ recognizes to be unique assets of the Company's business.
▇▇▇▇▇▇▇ shall not, during or at any time after the Service Period, 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 employment and in the ordinary course of his services
as Chairman 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. ▇▇▇▇▇▇▇ 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 termination of ▇▇▇▇▇▇▇' employment.
9. Prohibited Public Statements and Promotion of Goodwill.
9.1 ▇▇▇▇▇▇▇ shall not, either during or at any time after the
termination of his employment, make any public statement (including a private
statement reasonably likely to be repeated publicly) reflecting adversely on the
Company and its business prospects, except for such statements which during
▇▇▇▇▇▇▇' employment he may be required to make in the ordinary course of his
service as Chairman of the Board.
-20-
9.2 For a period of five (5) years following the Service Period
or following any termination of ▇▇▇▇▇▇▇' service hereunder ▇▇▇▇▇▇▇ agrees, that
while he is alive and not disabled, he 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.
▇▇▇▇▇▇▇ shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by him in performing such functions or duties provided that
▇▇▇▇▇▇▇ properly accounts for such expenses.
10. Noncompetition, Noninterference and Nonsolicitation.
10.1 Subject to the geographic limitation of Section 10.2 hereof,
▇▇▇▇▇▇▇ during the Service Period and for a period of five (5) years following
termination of his service in accordance with this Agreement 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
service, or which was engaged in or developed by the Company at any time during
the Service Period for specific implementation in the immediate future by the
Company.
10.2 ▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇ 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 Service Period, or, with respect to ▇▇▇▇▇▇▇' obligations
following termination
-21-
of his service, at the termination of his service or at any time within the
twelve-month period following the effective date of his termination of service.
10.3 ▇▇▇▇▇▇▇ agrees that for a period of five (5) years following
termination of service in accordance with this Agreement, ▇▇▇▇▇▇▇ 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 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 service.
10.4 ▇▇▇▇▇▇▇ agrees that for a period of five (5) years following
his termination of service in accordance with this Agreement, ▇▇▇▇▇▇▇ will not
directly or indirectly, for himself or on behalf of any third party, solicit for
business, accept any business from or otherwise do, or contract to do, business
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 ▇▇▇▇▇▇▇.
11. Equitable Remedies. ▇▇▇▇▇▇▇ acknowledges that his compliance with
the covenants in Sections 8, 9 and 10 of this Agreement is necessary to protect
the good will and other
-22-
proprietary interests of the Company and that, in the event of any violation by
▇▇▇▇▇▇▇ of the provisions of Section 8, 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, ▇▇▇▇▇▇▇ agrees that, in the event
of such violation or threatened violation by ▇▇▇▇▇▇▇, 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. ▇▇▇▇▇▇▇ further agrees that, in the event any of the provisions of
Sections 8, 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.
12. Successors; Related Companies; Binding Agreement.
12.1 The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to ▇▇▇▇▇▇▇, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle
▇▇▇▇▇▇▇ to compensation from the Company in the same amount and on the same
terms as he would be entitled to hereunder pursuant to Section 5.4 hereof,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "Company"
-23-
shall mean the Company and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section
12 or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
12.2 For purposes of Sections 8, 9, 10 and 11 hereof the term
"Company" shall mean Comcast Corporation ("Comcast") as well as (i) each of its
more than fifty percent (50%) owned subsidiaries and (ii) 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 Section 12.2, any
equity interest which Comcast has an option to purchase shall be considered as
owned by Comcast.
12.3 This Agreement and all rights of ▇▇▇▇▇▇▇ hereunder shall
inure to the benefit of and shall be binding upon ▇▇▇▇▇▇▇' personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If ▇▇▇▇▇▇▇ should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to ▇▇▇▇▇▇▇' devisee, legatee, or other designee or, if there be no
such designee, to ▇▇▇▇▇▇▇' estate.
13. Entire Agreement. This Agreement, the provisions of the 1993
Agreement recited in Section 23 hereof, the Pre-Existing Agreements described in
Section 6 hereof, and the 1997 Split-Dollar Agreement constitute the full and
complete understanding and agreement of ▇▇▇▇▇▇▇ and the Company respecting the
subject matter hereof, and supersede all prior understandings and agreements,
oral or written, express or implied. This Agreement may not be modified or
amended orally but only by an agreement in writing, signed by the party against
whom enforcement of any waiver, change, modification, extension or discharge is
sought.
-24-
14. Headings. The section headings of this Agreement are for
convenience of reference only and are not to be considered in the interpretation
of the terms and conditions of this Agreement.
15. Actions by Board. The Company is governed by its Board and,
accordingly, all references in this Agreement to the actions and discretion of
the Company are meant and deemed to refer to the actions and discretion of the
Board.
16. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when sent
by certified mail, postage prepaid, addressed as follows:
If to the Company:
35th Floor
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Corporate Secretary
If to ▇▇▇▇▇▇▇, at his last known personal residence.
Any party may change the persons and address to which notices or other
communications are to be sent by giving written notice of such change to the
other party in the manner provided herein for giving notice.
17. Waiver of Breach. No waiver by either party of any condition or of
the breach by the other of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition, or of the breach of any other term or
-25-
covenant set forth in this Agreement. Moreover, the failure of either party to
exercise any right hereunder shall not bar the later exercise thereof.
18. Nonalienation. ▇▇▇▇▇▇▇ shall not pledge, hypothecate, anticipate
or in any way create a lien upon any amounts provided under this Agreement. This
Agreement and the benefits payable hereunder shall not be assignable by either
party without the prior written consent of the other; provided, however, that
nothing in this Section shall preclude ▇▇▇▇▇▇▇ from designating a beneficiary to
receive any benefit payable hereunder upon his death, or the executors,
administrators or other legal representatives of ▇▇▇▇▇▇▇ or his estate from
assigning any rights hereunder to which they become entitled to the person or
persons entitled thereto.
19. Governing Law. This Agreement is entered into and shall be
construed in accordance with the internal laws of the Commonwealth of
Pennsylvania.
20. Continuation of Covenants. The covenants and agreements of ▇▇▇▇▇▇▇
set forth in Sections 8, 9 and 10 hereof shall survive any termination of
services, shall continue thereafter, and shall not expire unless and except as
may be expressly set forth in Sections 8, 9 and 10 hereof.
21. Invalidity or Unenforceability. If any term or provision of this
Agreement is held to be invalid or unenforceable, for any reason, such
invalidity or enforceability shall not affect any other term or provision hereof
and this Agreement shall continue in full force and effect as if such invalid or
unenforceable term or provision (to the extent of the invalidity or
unenforceability) had not been contained herein.
-26-
22. Counterparts. This Agreement may be executed in on or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
23. Effect on 1993 Agreement and on Certain Conditions to 1996
Split-Dollar Agreement.
23.1 This Agreement is intended to replace and supersede the 1993
Agreement, except for Sections 3(b), 3(c), 3(e), 3(i), 5, 6, 7, 8 (including, as
to Section 8, the definition of "Options" in the Recitals of the 1993 Agreement,
which definition is hereby amended to include any and all non-qualified options
issued or to be issued subsequent to March 16, 1994) and 13 through 23 thereof,
all of which provisions of the 1993 Agreement shall remain in effect, as well as
any other provisions of the 1993 Agreement (to the extent not inconsistent with
this Agreement) which are necessary to remain in effect in order to effectuate
any or all of the above-referenced provisions.
23.2 Concurrent with approval of this Agreement by the
Subcommittee, the Subcommittee rescinded its resolutions adopted at its meeting
of April 15, 1996 relating to amendment of ▇▇▇▇▇▇▇' 1996 Split-Dollar Agreement
to condition entitlements thereunder on a performance test (contained in Item C
of the minutes of the meeting of such date).
-27-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written.
Attest: COMCAST CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary Title: Executive Vice President
Witness:
/s/ ▇▇▇▇ ▇. Schnapin /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-28-
APPENDIX A
1997 SPLIT-DOLLAR LIFE
INSURANCE AGREEMENT
THIS AGREEMENT, made as of the _____ day of ________, 1997, by and
among Comcast Corporation, a Pennsylvania corporation (hereinafter called the
"Corporation"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., an executive of the Corporation who is a
resident of the Commonwealth of Pennsylvania (hereinafter called the
"Employee"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee U/T/A of ▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, dated _________________, 1997 (hereinafter called the "Owner").
R E C I T A L S
WHEREAS, the Employee has rendered loyal and valuable service to the
Corporation; and
WHEREAS, the Employee and the Corporation have previously entered into
several split-dollar life insurance agreements in order to provide life
insurance protection for the Employee's family; and
WHEREAS, the Corporation wishes to help provide additional life
insurance protection for the Employee's family under certain policies of life
insurance insuring the life of last survivor of the Employee and his spouse
(hereinafter individually referred to as a "Policy" and collectively as the
"Policies"), which are described on Schedule A attached hereto and by this
reference made a part hereof, and which were issued by the insurance companies
-1-
identified in Schedule A (hereinafter individually referred to as
an "Insurer"); and
WHEREAS, the Owner is the owner of the Policies and, as such,
possesses all incidents of ownership in and to the Policies; and
WHEREAS, the Corporation is willing through a split-dollar life
insurance arrangement to advance on behalf of the Owner a certain portion of the
annual premiums due on the Policies on the terms and conditions hereinafter set
forth; and
WHEREAS, the Corporation wishes to have the Policies collaterally
assigned to it by the Owner, in order to secure the repayment of the amounts
which it will pay toward the premiums on the Policies; and
WHEREAS, it is the desire of the parties to set forth the extent of the
Corporation's security interest in the aggregate cash surrender value of the
Policies and in the proceeds thereof;
NOW THEREFORE, in consideration of the premises and the mutual promises
contained herein and intending to be legally bound, the parties hereby agree as
follows:
1. Policies. The parties hereto have taken all necessary action to
cause each Insurer to issue its Policy, and shall take any further action which
may be necessary to cause each Policy to conform to the provisions of this
Agreement. The parties hereto agree that each Policy shall be subject to the
terms and conditions of this Agreement and of the collateral assignment filed
with the Insurer relating to its Policy.
-2-
2. Ownership Rights. Except as may otherwise be provided herein, the
Owner shall be the sole and absolute owner of the Policies, and may exercise all
ownership rights granted to the owner thereof by the terms of the Policies,
subject to the security interest of the Corporation as created pursuant to this
Agreement.
3. Payment of Premiums.
a. On or before the due date of each annual Policy premium, or
within the grace period provided therein, the Corporation shall pay the full
amount of the premium which is in excess of the portion of the premium which
would be includable in the Employee's gross income for federal and state income
tax purposes, if not paid by the Employee (the "Non-Taxable Portion"). The
Corporation shall, upon request, promptly furnish the Owner evidence of timely
payment of such premium. The payment of such Non-Taxable Portion of the premium
shall be treated as an advance from the Corporation to the Owner.
b. The portion of each annual Policy premium which is in
excess of the Non-Taxable Portion shall also be paid by the Corporation at the
same time as the Non-Taxable Portion is paid, and shall constitute compensation.
c. If the Employee dies and his spouse survives him, the
Corporation shall continue to (i) make advances to the Owner for the purpose of
paying annual premiums pursuant to Section 3(a) hereof, and (ii) pay the
Non-Taxable Portion of the annual Policy premium as provided in Section 3(b)
hereof, for the balance of the surviving spouse's life.
-3-
d. The obligation of the Corporation to make the annual
payments provided in this Section 3 shall be governed by Section 4(c) of the
Compensation and Deferred Compensation Agreement executed by the Corporation and
the Employee as of September 16, 1997 (the "Employment Agreement"). Accordingly,
if it is determined that the Employee's services are terminated for "Cause" as
defined in Section 4(c) of the Employment Agreement, the Corporation shall have
no further obligation to make payments under this Section 3 following the
Employee's Date of Termination, as determined under Section 4(e) of the
Employment Agreement.
4. Bonus. Following the payment of each annual Policy premium for each
year that an annual Policy premium is paid, the Corporation agrees to pay to the
Employee (or his surviving spouse, if applicable) the following supplemental
amounts (none of which shall be considered advances) (the "Bonus"):
(1) An income tax gross-up amount equal to (i) the product of
the portion of each annual premium amount paid under Section 3(b)
hereof and the highest marginal income tax rate, (ii) divided by one
minus the highest marginal income tax rate. For purposes of this
Section 4, 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
-4-
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
the Employee in connection with his deduction of state and local income
taxes for federal income tax purposes.
(2) A gift tax gross-up amount equal to (i) the product of the
highest marginal gift tax rate and each annual premium amount paid
under Section 3(b) hereof, (ii) divided by one minus the highest
marginal gift tax rate. For purposes of this Section 4, the term
"highest marginal gift tax rate" shall mean the highest tax rate
(including any surtax) imposed under Section 2001(c) of the Internal
Revenue Code of 1986, as amended, (or any successor provision) as
applied to gifts made in the calendar year in which a premium is paid
under Section 3(b) hereof.
a. All Bonuses to be paid under this Agreement are subject to
applicable tax withholding requirements.
b. All determinations which are necessary or appropriate for
purposes of Section 4 hereof shall be made, in its sole discretion, by the
Subcommittee and such determinations shall be final and binding on all parties
to this Agreement.
5. Collateral Assignment. To secure the repayment to the Corporation of
the amounts advanced by it to the Owner hereunder, the Owner has,
contemporaneously herewith, assigned each Policy to the Corporation as
collateral, under instruments which in all
-5-
material respects are the same as the form attached hereto as Addendum A. The
collateral assignment of a Policy to the Corporation hereunder shall not be
terminated, altered or amended by the Owner, without the express written consent
of the Corporation. The parties hereto agree to take all action necessary to
cause each collateral assignment to conform to the provisions of this Agreement.
In the event of any inconsistency between the terms of this Agreement and the
terms of a collateral assignment, the terms of this Agreement shall control.
6. Limitation on Policy Disposition. During the period that a
collateral assignment of a Policy is in effect, the Owner shall not borrow from,
pledge, transfer or assign the Policy and shall not sell, surrender or cancel
the Policy, change the beneficiary designation provision thereof, nor terminate
the dividend election thereof without the express written consent of the
Corporation, which consent shall not be unreasonably withheld.
7. Policy Proceeds.
a. Upon the death of the Employee (or his surviving spouse, if
applicable), the Corporation and the Owner shall promptly take all action
necessary to obtain the death benefit provided under each Policy.
b. The Corporation shall have the unqualified right to receive
a portion of each death benefit equal to the total amount advanced by it
pursuant to Section 3(a) hereof. The balance of each death benefit, if any,
shall be paid directly to the beneficiary or beneficiaries designated by the
Owner, in the manner and in the amount or amounts provided in the beneficiary
designation provision of the applicable Policy. In no event shall
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the amount payable to the Corporation hereunder exceed the Policy proceeds
payable at the death of the Employee (or his surviving spouse, if applicable).
No amount shall be paid from the proceeds to the beneficiary or beneficiaries
designated by the Owner until the full amount due the Corporation hereunder has
been paid. The parties hereto agree that the beneficiary designation provision
of each Policy shall conform to the provisions hereof.
8. Termination.
a. This Agreement shall terminate, without notice, upon the
occurrence of any of the following events: (1) the total cessation of the
business of the Corporation, (2) the bankruptcy, receivership or dissolution of
the Corporation, or (3) the surrender of the Policies by the Owner with the
written consent of the Corporation as provided in Section 7.
b. In addition, either the Owner or the Employee may terminate
this Agreement by written notice to the other parties hereto. Such termination
shall be effective as of the date of such notice. The Corporation may not
terminate this Agreement.
9. Release of Policy Collateral.
a. For sixty (60) days after the earlier of the date of the
termination of this Agreement or the date on which the Corporation's payment
obligation ceases under Section 3(d) hereof as a result of the termination of
the Employee's services for Cause, the Owner shall have the option of obtaining
the release of each collateral assignment of a Policy to the Corporation. To
obtain such release, the Owner shall pay or cause to be paid to the Corporation
an amount equal to the Policy's then cash surrender
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value. Upon receipt of such amount, the Corporation shall release the collateral
assignment of the Policy, by the execution and delivery of an appropriate
instrument of release.
b. If the Owner fails to exercise such option within such
sixty (60) day period, then the Corporation may enforce its right to be repaid
the amount set forth in Section (a), above, by surrendering the Policy to the
Insurer in exchange for the Policy's cash surrender value pursuant to the
collateral assignment of the Policy. Thereafter, neither the Owner nor the
Employee's respective heirs, assigns or beneficiaries shall have any further
interest in and to the Policy, either under the terms thereof or under this
Agreement.
10. Insurer. An Insurer shall be fully discharged from its obligations
under a Policy by payment of the Policy death benefit to the beneficiary or
beneficiaries named in the Policy, subject to the terms and conditions of the
Policy. In no event shall an Insurer be considered a party to this Agreement, or
any modification or amendment hereof. No provision of this Agreement, nor of any
modification or amendment hereof, shall in any way be construed as enlarging,
changing, varying, or in any other way affecting the obligations of an Insurer
as expressly provided in the Policy, except insofar as the provisions hereof are
made a part of the Policy by the collateral assignment executed by the Owner and
filed with the Insurer in connection herewith.
11. Amendment. This Agreement may not be amended, altered or modified,
except by a written instrument signed by the parties
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hereto, or their respective successors or assigns, and may not be otherwise
terminated except as provided herein.
12. Succession. This Agreement shall be binding upon and shall inure to
the benefit of the Corporation and its successors and assigns, and the Employee,
the Owner, and their respective successors, assigns, heirs, executors,
administrators and beneficiaries.
13. Notices. Any notice, consent or demand required or permitted to be
given under the provisions of this Agreement shall be in writing, and shall be
signed by the party giving or making the same. If such notice, consent or demand
is mailed to a party hereto, it shall be sent by United States certified mail,
postage prepaid, addressed to such party's last known address as shown on the
records of the Corporation. The date of such mailing shall be deemed the date of
notice, consent or demand.
14. 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.
15. Governing Law. This 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.
16. Trust Agreement. Recognizing that the Owner is a trustee and that
the Policies are held in trust, the parties agree that the terms of this
Agreement shall control in the event of any
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inconsistencies between the terms of this Agreement and the terms
of any trust agreement.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized officers and the Employee and the Owner have
hereunto set their hands and seals as of the date first above written.
Attest: COMCAST CORPORATION
________________________ By:___________________________
Secretary Title:
___________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee
U/T/A of ▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, dated _________,
1997
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Schedule A
The following life insurance policies are subject to this 1997
Split-Dollar Life Insurance Agreement:
Insurer Policy No. Death Benefit
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