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@Home CEO wins on Excite deal

As @Home seals its buyout of Excite, the deal helps trigger a special payout for chief executive Thomas Jermoluk, potentially worth tens of millions of dollars.

When @Home agreed to buy out Web portal Excite, the deal helped trigger a special payout for chief executive Thomas Jermoluk, potentially worth tens of millions of dollars.

In addition to a salary of $500,000, @Home's Jermoluk received 500,000 options last year, partly for helping to negotiate the Excite deal. The options were valued at $21 million, based on a 5 percent annual appreciation from the time of the grant until they expire in 2008. The options had a strike price of $67 a share; @Home shares are currently trading around 150.75. This would add to the 4 million restricted stock awards Jermoluk received in 1996.

A number of new merger details have come to light today in @Home's regulatory filing, including the state of voting rights for owners in the Net-over-cable company. Meanwhile, federal regulators have granted antitrust clearance to the multibillion-dollar Internet deal.

Jermoluk, a former SGI executive, also received a generous bonus, according to the proxy statment filed with the Securities and Exchange Commission. Jermoluk's $250,000 bonus was above and beyond the $200,000 he is entitled to receive based on certain company performance goals.

Jermoluk already has a sizeable stake in @Home, about one percent according to the proxy.

@Home's directors awarded Jermoluk this higher bonus and options due to his "leadership in connection with @Home's financing activities, the Excite transaction and @Home's rapid growth," according to the filing.

The merger deal seems to be moving along. @Home will hold its shareholders' meeting May 28 in Redwood City, California, to vote on the proposed deal and a previously announced 2-for-1 stock split.

If Excite solicits or holds buyout discussions with any other party in the interim, however, @Home will walk away with a $200 million termination fee should the deal fail altogether, according to the filing.

Netscape negotiations
As part of the proposed $6.7 billion merger, Excite notified Netscape Communications of its intention to end their $70 million search engine agreement with the company's Netcenter portal site unless a new arrangement is reached.

If the agreement is not renegotiated, the deal will be terminated "during the second quarter of 1999," according to the SEC filing.

As previously reported, Excite is in negotiations with America Online, which recently acquired Netscape, over the fate of the search and content channel agreement.

Netcenter now has access to AOL's content and although negotiations continue, @Home may prefer to have Excite power its own search engine rather than license technology to a competitor.

Voting rights slashed
After the merger goes through, a number of shareholders will see their stake and voting rights in @Home drop. For example, AT&T, the largest shareholder via its acquisition of TCI Internet Holdings, will see its holdings fall to a 25.9 percent stake from 37.7 percent. And, the long distance giant's voting shares will decline to 57.9 percent from 70.4 percent.

Meanwhile, other cable investors, such as Comcast and Cox Communications, will both see their stakes fall to 8 percent from 11.6 percent and their voting rights decline to 4.5 percent from 5.5 percent.

Cablevision Systems will find its stake drop to 5.7 percent from 8 percent and its voting rights decline to 3.3 percent from 4 percent.'s Jeff Pelline contributed to this report.