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Cable Operators

Comcast Offers Liquidity to Nonemployee Holders

9/21/2004 10:29 AM Eastern

Comcast Corp. Tuesday announced the launch of a targeted stock-option-liquidity program for nonemployees.

The company said it would offer nonemployee holders of its stock options “an opportunity to receive value for their options.”

The MSO said the plan applies to approximately 63,000 holders of some 41.8 million options with a current value of about $125 million.

When Comcast acquired AT&T Broadband in November 2002, former holders of AT&T Corp. employee stock options had their options converted in whole or in part into options on Comcast class-A common stock, the MSO said.

Many of these option holders -- together with a small number of holders of options on Comcast class-A special common stock -- have no ongoing employee affiliation with Comcast. Therefore, the traditional purpose of employee stock options -- to align the interests of the employer with the employee -- no longer applies to the options held by those individuals, Comcast said.

The MSO said that although eligible option holders will be able to receive cash for their options, it will incur no economic dilution from this offering, as JPMorgan Chase Bank -- Comcast's financial counterparty in connection with the stock-option-liquidity program -- will ultimately fund the cost of providing the program.

This funding will occur through the simultaneous purchase by JPMorgan of new stock options from Comcast having similar economic terms as the options being purchased by Comcast from option holders, the operator said. As a result, the same number of shares underlying options will remain outstanding upon completion of the offer.

September