<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934*
(Amendment No. 2)
BET Holdings, Inc.
(Name of Issuer)
Class A Common Stock, par value $.02 per share
(Title of Class of Securities)
086585-10-6
(CUSIP Number)
<TABLE>
<S> <C> <C>
Stephen M. Brett, Esq. Frederick H. McGrath, Esq. Howard V. Sinclair
Senior Vice President Baker & Botts, L.L.P. Arent, Fox, Kintner,
and General Counsel 599 Lexington Avenue Plotkin & Kahn
Tele-Communications, Inc. New York, New York 10022-6030 1050 Connecticut Avenue, N.W.
5619 DTC Parkway (212) 705-5000 Washington, D.C. 20036-5339
Englewood, CO 80111 (202) 857-6000
(303) 267-5500
</TABLE>
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 22, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page should be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
*NOTE: THIS STATEMENT CONSTITUTES AMENDMENT NO. 2 OF THE REPORTING GROUP
SCHEDULE 13D AND ALSO CONSTITUTES AMENDMENT NO. 8 OF A REPORT ON
SCHEDULE 13D OF ROBERT L. JOHNSON AND AMENDMENT NO. 2 OF A REPORT ON
SCHEDULE 13D OF TELE-COMMUNICATIONS, INC.
<PAGE>
CUSIP No. 086585-10-6
(1) Names of Reporting Persons S.S. or I.R.S. Identification
Nos. of Above Persons
Robert L. Johnson
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
(3) SEC Use Only
(4) Source of Funds
BK, OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization
<TABLE>
<CAPTION>
United States
<S> <C> <C> <C>
Number of (7) Sole Voting Power 0 shares
Shares
Beneficially (8) Shared Voting Power 10,631,103 shares*
Owned by
Each (9) Sole Dispositive Power 0 shares
Reporting
Person (10) Shared Dispositive Power 10,631,103 shares*
With
</TABLE>
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
10,631,103 shares*
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[ ]
(13) Percent of Class Represented by Amount in Row (11)
63.6%
Assumes conversion of all shares of Class B Common Stock and Class C
Common Stock beneficially owned by the Reporting Persons into shares
of Class A Common Stock. Because each share of Class B Common Stock
and Class C Common Stock generally is entitled to ten votes per share
while the Class A Common Stock is entitled to one vote per share, the
Reporting Persons may be deemed to beneficially own equity securities
of the Company representing approximately 91.8% of the voting power of
the Company.
(14) Type of Reporting Person (See Instructions)
IN
___________
* Includes 103,600 shares beneficially owned by Mr. Johnson's spouse, as to
which shares the Reporting Persons disclaim beneficial ownership.
CUSIP No. 086585-10-6
Page 2 of 22 pages
<PAGE>
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
Tele-Communications, Inc.
84-1260157
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
(3) SEC Use Only
(4) Source of Funds
BK, OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization
<TABLE>
<CAPTION>
Delaware
<S> <C> <C> <C>
Number of (7) Sole Voting Power 0 shares
Shares
Beneficially (8) Shared Voting Power 10,631,103 shares*
Owned by
Each (9) Sole Dispositive Power 0 shares
Reporting
Person (10) Shared Dispositive Power 10,631,103 shares*
With
</TABLE>
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
10,631,103 shares*
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
(13) Percent of Class Represented by Amount in Row (11)
63.6%
Assumes conversion of all shares of Class B Common Stock and Class C
Common Stock beneficially owned by the Reporting Persons into shares
of Class A Common Stock. Because each share of Class B Common Stock
and Class C Common Stock generally is entitled to ten votes per share
while the Class A Common Stock is entitled to one vote per share, the
Reporting Persons may be deemed to beneficially own equity securities
of the Company representing approximately 91.8% of the voting power of
the Company.
(14) Type of Reporting Person (See Instructions)
CO
______________
* Includes 103,600 shares beneficially owned by Mr. Johnson's spouse, as to
which shares the Reporting Persons disclaim beneficial ownership.
Page 3 of 22 pages
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Statement of
ROBERT L. JOHNSON
and
TELE-COMMUNICATIONS, INC.
Pursuant to Section 13(d)
of the Securities Exchange Act of 1934
in respect of
BET HOLDINGS INC.
This Report on Schedule 13D relates to the Class A common stock, par value
$.02 per share (the "Class A Stock"), of BET Holdings, Inc., a Delaware
corporation (the "Company"). The Report on Schedule 13D originally filed by the
Reporting Group (as defined below) on September 16, 1997 as amended and
supplement by an amendment thereto previously filed with the Commission
(collectively, the "Reporting Group Schedule 13D") is hereby amended and
supplemented to include the information contained herein, and this Report
constitutes Amendment No. 2 to the Reporting Group Schedule 13D. The Report on
Schedule 13D originally filed by Robert L. Johnson on November 12, 1991, as
amended and supplemented by the amendments thereto previously filed with the
Commission (collectively, the "Johnson Schedule 13D"), is hereby amended and
supplemented to include the information contained herein, and this Report
constitutes Amendment No. 8 to the Johnson Schedule 13D. In addition, the Report
on Schedule 13D originally filed by Tele-Communications, Inc., a Delaware
corporation ("TCI"), on August 15, 1994, as amended and supplemented by the
amendments thereto previously filed with the Commission (collectively, the "TCI
Schedule 13D"), is hereby amended and supplemented to include the information
contained herein, and this Report constitutes Amendment No. 2 to the TCI
Schedule 13D. Mr. Johnson and TCI (each, a "Reporting Person") constitute a
"group" for purposes of Rule 13d-5 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), with respect to their respective beneficial
ownership of the Class A Stock and are collectively referred to as the
"Reporting Group." The Johnson Schedule 13D, the TCI Schedule 13D, and the
Reporting Group Schedule 13D, are collectively referred to as the "Schedule
13D."
The summary descriptions contained in this Report of certain agreements and
documents are qualified in their entirety by reference to the complete texts of
such agreements and documents filed as Exhibits hereto and incorporated herein
by reference. Information contained herein with respect to each Reporting Person
and its executive officers, directors and controlling persons is given solely
Page 4 of 22 pages
<PAGE>
by such Reporting Person, and no other Reporting Person has responsibility for
the accuracy or completeness of information supplied by such other Reporting
Person.
ITEM 4. PURPOSE OF TRANSACTION.
The information set forth in Item 4 of the Johnson Schedule 13D, the TCI
Schedule 13D and the Reporting Group Schedule 13D is hereby amended and
supplemented by adding the following information thereto, and such information
also constitutes the Reporting Group Schedule 13D:
The information set forth in Item 6 of this Schedule 13D is hereby
incorporated by reference herein.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in Item 5 of the Johnson Schedule 13D, the TCI
Schedule 13D and the Reporting Group Schedule 13D is hereby amended and
supplemented by adding the following information thereto, and such information
also constitutes the Reporting Group Schedule 13D:
(a)-(b) Due to the rescission of a broker oversell of 15,330 shares of the
Company's Class A Stock owned by Mr. Johnson, the number of shares beneficially
owned by the Reporting Persons was understated in the Reporting Group Schedule
13D. In addition, since the filing of the most recent amendment to the
Reporting Group Schedule 13D, a number of options held by Mr. Johnson or his
spouse have become exercisable or will become exercisable in the next 60 days,
thus resulting in an increase in the number of shares beneficially owned by the
Reporting Group.
The Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997 (the "Company 10-K") reports that as of October 17, 1997 there were
outstanding 10,055,048 shares of Class A Stock, 1,831,600 shares of Class B
Stock and 4,820,000 shares of Class C Stock. Based upon the number of shares
outstanding as set forth in the Company 10-K and assuming the conversion into
Class A Stock of all shares of Class B Stock and Class C Stock held by the
Reporting Persons, the Reporting Persons beneficially own an aggregate of
10,631,103 shares of Class A Stock, or approximately 63.6% of the shares of
Class A Stock deemed outstanding. Of these shares, (i) Mr. Johnson owns
1,929,203 shares of Class A Stock and 4,820,000 shares of Class C Stock and
holds options (which are currently exercisable or become exercisable within the
next 60 days) to acquire 218,700 shares of Class A Stock, and (ii) TCI (through
Liberty) owns 1,831,600 shares of Class A Stock and 1,831,600 shares of Class B
Stock. The shares of Class A Stock beneficially owned by Mr. Johnson (including
shares issuable upon exercise of such options) constitute approximately 21.4% of
the outstanding shares of Class A Stock (without giving effect to the conversion
of Mr. Johnson's shares of Class C Stock), the shares of Class A Stock
beneficially owned by TCI constitute approximately 18.2% of the outstanding
shares of Class A Stock (without giving effect to the conversion of TCI's shares
of Class B Stock), the shares of Class B Stock beneficially owned by TCI
constitute 100% of the outstanding shares of Class B Stock, and the shares of
Class C Stock beneficially owned by Mr. Johnson constitute 100% of the
outstanding shares of Class C Stock. With respect to Mr. Johnson, the foregoing
amounts include 100 shares of Class A Stock and options
Page 5 of 22 pages
<PAGE>
(which are currently exercisable or become exercisable within the next 60 days)
to acquire 103,500 shares of Class A Stock held by Mr. Johnson's wife. The
Reporting Persons disclaim beneficial ownership of all shares and options held
by Mr. Johnson's wife.
Because of the voting power attributable to the Class B Stock and Class C
Stock beneficially owned by the Reporting Persons, the Company Securities
beneficially owned by the Reporting Persons constitute approximately 91.8% of
the outstanding voting power of the Company.
By virtue of their status as a "group" for purposes of Rule 13d-5, each of
Mr. Johnson and TCI may be deemed to have shared voting and dispositive power
over the shares owned by the other person.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SECURITIES OF THE ISSUER
The information set forth in Item 6 of the Johnson Schedule 13D, the TCI
Schedule 13D and the Reporting Group Schedule 13D is hereby amended and
supplemented by adding the following information thereto, and such information
also constitutes the Reporting Group Schedule 13D:
On December 22, 1997, Robert L. Johnson and Liberty entered into a letter
agreement, dated as of September 11, 1997, relating to their joint activities in
connection with the proposed Acquisition (the "Letter Agreement"). A copy of the
Letter Agreement is filed as an Exhibit hereto and is hereby incorporated by
reference herein.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
4. Letter Agreement between Robert L. Johnson and Liberty Media Corporation.
Page 6 of 22 pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, each
of the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Dated: December 30, 1997
/s/ Robert L. Johnson
----------------------
Robert L. Johnson
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
----------------------
Name: Stephen M. Brett
Title: Executive Vice President
and General Counsel
Page 7 of 22 pages
<PAGE>
EXHIBIT INDEX
Seq. Pg. No.
1. Joint Filing Agreement between Robert L. Johnson and Tele-
Communications, Inc. regarding joint filing of Schedule 13D.*
2. Letter, dated September 10, 1997, from Robert L. Johnson
and Liberty Media Corporation to the Board of Directors of
the Company.*
3. Letter, dated September 19, 1997, from Robert L. Johnson and
Liberty Media Corporation to Delano E. Lewis, the sole member
of the Special Committee of the Board of Directors of the
Company.*
4. Letter Agreement between Robert L. Johnson and Liberty Media
Corporation.
* Previously filed.
Page 8 of 22 pages
<PAGE>
Exhibit 4
LIBERTY MEDIA CORPORATION
8101 East Prentice Avenue, Suite 500
Englewood, CO 80111
September 11, 1997
Robert L. Johnson
2915 Audubon Terrace, N.W.
Washington, D.C. 20018
Dear Mr. Johnson:
This letter agreement (this "Agreement") confirms the agreement
between Robert L. Johnson ("Johnson", which term shall include any entity formed
by Mr. Johnson to hold the Company Securities (as defined below) beneficially
owned by him) and Liberty Media Corporation ("Liberty") with respect to the
proposed joint acquisition (the "Acquisition") of BET Holdings, Inc. (the
"Company"). This Agreement sets forth the general terms and conditions under
which Liberty and Johnson will act together in respect of the Acquisition,
together with the rights and obligations of Johnson and Liberty in respect of
each other in connection with the Acquisition.
1. The Acquisition. Johnson and Liberty agree to proceed with the
---------------
Acquisition jointly and, subject to the terms and conditions contained herein,
to use their respective commercially reasonable efforts to cause the Acquisition
to be consummated as promptly as practicable. Until the Acquisition is
consummated, all material decisions with respect to the Acquisition (including,
without limitation, decisions relating to the price to be offered to
Page 9 of 22 pages
<PAGE>
acquire the outstanding capital stock of the Company, the treatment of
outstanding options, warrants or other rights to acquire securities of the
Company, the structure of the Acquisition, and the settlement of any legal
actions relating to the Acquisition) shall be as Johnson and Liberty may
mutually agree. Johnson and Liberty agree to use their respective commercially
reasonable efforts, acting in good faith, to resolve, on a mutually acceptable
basis, any disagreements they may have with respect to such material decisions.
The date of the consummation of the acquisition of all Company Securities (as
defined below) (other than Company Securities owned by Johnson and Liberty) is
hereinafter referred to as the "Acquisition Date."
2. Formation of Newco; Equity Interests. (a) In order to facilitate
------------------------------------
the Acquisition, Johnson and Liberty intend to form an acquisition entity
("Newco," which term shall include the entity surviving any merger or business
combination between the Company and Newco). The parties presently contemplate
that Newco will be a Delaware corporation. Each of Johnson and Liberty agree,
subject to both parties and any applicable lenders agreeing as to the treatment
of any indebtedness secured by any party's Company Securities, (i) to contribute
to Newco contemporaneously with and contingent upon the consummation of the
Acquisition all Company Securities owned by such party as of the date hereof and
(ii) that upon such contribution, such Company Securities will be free of any
liens, claims, charges, security interests, pledges or encumbrances of any kind
(other than any of the foregoing created by or pursuant to this Agreement or as
a result of applicable state and federal securities laws). Schedule I hereto
contains a list of all Company Securities owned by each of Johnson and Liberty
as of the date hereof, which list is true and correct in all material respects.
To the extent that the parties are
Page 10 of 22 pages
<PAGE>
required prior to the Acquisition Date to advance funds to Newco in connection
with the Acquisition, each party will enter into margin or other loan agreements
on terms reasonably acceptable to such party (which terms may require such party
to pledge all of the Company Securities owned by such party to such lender in
connection with such loan) and to borrow such amounts (subject to margin rules)
as may be required to satisfy such party's obligation to advance funds
hereunder, and contribute or, if the parties so mutually agree, lend, the
proceeds of such borrowings to Newco. The term "Company Securities" shall mean
all shares of capital stock of the Company and all options, warrants and other
rights to acquire capital stock of the Company.
(b) The parties' equity interests in Newco shall be based upon the
value of their respective contributions to Newco. For purposes of the
foregoing, (i) all contributions of shares of Class A Common Stock, Class B
Common Stock and Class C Common Stock shall be valued at the price per share of
Class A Common Stock to be paid to unaffiliated stockholders of the Company in
the Acquisition (the "Offer Price") and (ii) all contributions of options,
warrants or other rights to acquire Company Securities will be valued at the
spread between the Offer Price and the exercise price of such option, warrant or
other right. Upon their contribution of Company Securities or cash to Newco in
connection with the Acquisition, each of Johnson and Liberty will be issued
equity interests in Newco which will be in proportion to the aggregate value of
his or its contribution to Newco.
(c) As soon as is reasonably practicable, the parties will negotiate
in good faith the terms of a stockholders' agreement or similar arrangement
which should include, among other
Page 11 of 22 pages
<PAGE>
things, provisions (i) relating to the governance of Newco and the Company
following the Acquisition Date and (ii) providing for reasonable liquidity for
each of the parties.
3. Financing. The parties agree to work together to arrange
---------
appropriate financing for the Acquisition and matters related thereto as
previously discussed by the parties, and the parties' obligations hereunder are
conditioned upon the obtaining of such financing on terms and conditions
reasonably acceptable to each party. In the event the parties are required to
obtain financing prior to the Acquisition, the parties agree to cooperate with
respect to the obtaining of such financing and to coordinate such interim
financing with the permanent financing for the Acquisition.
4. Representations and Warranties of Johnson. Johnson represents and
-----------------------------------------
warrants to Liberty that: this Agreement has been duly executed and delivered
by Johnson and, assuming the due execution and delivery thereof by Liberty, is a
valid and binding obligation of Johnson, enforceable against him in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
rights of creditors generally and by general principles of equity; the
execution and delivery of this Agreement and the performance of Johnson's
obligations hereunder will not conflict with or result in a material breach or
violation of (i) any material agreement to which Johnson is a party or by which
he or his property are bound, or (ii) assuming expiration of all applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), without objection to the transactions contemplated
hereby by the Department of
Page 12 of 22 pages
<PAGE>
Justice (the "DOJ") or the Federal Trade Commission (the "FTC"), any applicable
law or regulation; except for certain Delaware stockholder suits, there is no
action, suit, proceeding or investigation pending or, to the best of Johnson's
knowledge, threatened against Johnson, Liberty, Newco, the Company or their
respective affiliates relating to the transactions contemplated by this
Agreement, including, without limitation, the Acquisition; except for filings
under the HSR Act, no consent, approval or authorization of, or any
registration, qualification or filing with, any governmental agency or authority
or any other person is required in order for Johnson to execute, deliver and
perform his obligations under this Agreement; except as set forth on Schedule
II, Johnson is the record and beneficial owner of the Company Securities listed
below his name on Schedule I hereto, such Company Securities have been validly
issued, are fully paid and non-assessable, and such Company Securities are free
of any liens, claims, charges, security interests, pledges or encumbrances of
any kind (other than any of the foregoing created herein or hereby or as a
result of applicable state and federal securities laws); and other than as set
forth in Schedule I, Johnson does not beneficially own any Company Securities.
5. Representations and Warranties of Liberty. Liberty represents and
-----------------------------------------
warrants to Johnson that: (a) Liberty is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full power and authority to execute, deliver and perform this Agreement, and
the performance of Liberty's obligations hereunder have been duly authorized by
all necessary action (corporate or other) on the part of Liberty; (b) this
Agreement has been duly executed and delivered by Liberty and, assuming the due
execution and delivery hereof by Johnson, is a valid and binding obligation of
Liberty, enforceable in accordance
Page 13 of 22 pages
<PAGE>
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
rights of creditors generally and by general principles of equity; (c) the
execution and delivery of this Agreement and the performance of Liberty's
obligations hereunder will not conflict with or result in a material breach or
violation of (i) any material agreement to which Liberty is a party or by which
Liberty or its property is bound, or (ii) assuming expiration of all applicable
waiting periods under the HSR Act without objection to the transactions
contemplated hereby by the DOJ or the FTC, any applicable law or regulation; (d)
except for certain Delaware stockholder suits, there is no action, suit,
proceeding or investigation pending or, to the best of Liberty's knowledge,
threatened against Liberty, Johnson, Newco, the Company or their respective
affiliates relating to the transactions contemplated by this Agreement,
including, without limitation, the Acquisition; (e) except for filings under the
HSR Act, no consent, approval or authorization of, or any registration,
qualification or filing with, any governmental agency or authority or any other
person is required in order for Liberty to execute, deliver and perform its
obligations under this Agreement; (f) except as set forth on Schedule III
Liberty is the record and beneficial owner of the Company Securities listed
below its name on Schedule I hereto, such Company Securities have been validly
issued, are fully paid and non-assessable, and such Company Securities are free
of any liens, claim charges, security interests, pledges, or encumbrances of any
kind (other than any of the foregoing created herein or hereby or as a result of
applicable state and federal securities laws); and (g) other than as set forth
in Schedule I, neither Liberty nor Tele-Communications, Inc. ("TCI")
beneficially owns any Company Securities.
Page 14 of 22 pages
<PAGE>
6. Covenants of Liberty and Johnson. (a) Each of Liberty and Johnson
--------------------------------
agree that it or he will (i) vote all shares of Company Common Stock in respect
of which it or he has, directly or indirectly, the power to vote or control the
voting of, in favor of the Acquisition; (ii) vote all shares of Company Common
Stock in respect of which it or he has, directly or indirectly, the power to
vote or control the voting of, against any Alternative Transaction (as defined
below); (iii) except for the contribution contemplated by Section 2 hereof, not
sell or dispose of any Company Securities owned (now or at any time prior to the
Acquisition), directly or indirectly, by it or him, (iv) not enter into any
agreement, arrangement or understanding with any other person the effect of
which is to limit or restrict its or his right to vote any shares of Company
Common Stock in accordance with the terms of this Agreement; (v) not enter into
any agreement, arrangement or understanding with any other person with respect
to the purchase, sale or voting of shares of Company Common Stock; and (vi) not
solicit any Alternative Transaction; provided, however, that the parties
-------- -------
acknowledge and agree that the matters referred to in clauses (v) and (vi) above
shall not restrict or limit actions taken by Johnson or any officer or director
of Liberty or TCI serving on the Board of Directors of the Company, provided
that such actions are taken in such person's capacity as a director of the
Company pursuant to such person's fiduciary duties.
(b) For purposes of this Agreement, an "Alternative Transaction" means
a transaction or series of related transactions (other than the Acquisition)
resulting in (a) any change of control of the Company, (b) any merger or
consolidation of the Company in which another person acquires 25% or more of the
aggregate voting power of all voting securities of
Page 15 of 22 pages
<PAGE>
it or the surviving corporation, as the case may be, (c) any tender offer or
exchange offer for, or any acquisitions of, any securities of the Company which,
if consummated, would result in another person owning 25% or more of the
aggregate voting power of all voting securities of the Company or (d) any sale
or other disposition of assets of the Company or any of its subsidiaries if the
fair market value of such assets exceeds 25% of the aggregate fair market value
of the assets of the Company and its subsidiaries taken as a whole before giving
effect to such sale or other disposition.
7. Regulatory Approvals. The obligations of the parties under
--------------------
Sections 1 and 2 of this Agreement are conditioned upon the receipt of all
necessary governmental and agency approvals required for the consummation of the
transactions contemplated hereby, including but not limited to, compliance with
all securities laws and the expiration or termination of all applicable waiting
periods under the HSR Act.
8. Fees and Expenses. All costs and expenses incurred in connection
-----------------
with this Agreement and the transactions contemplated hereby shall be paid or
reimbursed by Newco following the Acquisition, or if the Acquisition is not
consummated, then paid by the parties in proportion to their respective equity
interests in Newco (assuming for such purpose that each party had contributed
all Company Securities beneficially owned by it in accordance with Section 2).
In the event that the Acquisition is not consummated and the Company makes any
payment to Newco pursuant to the terms of a definitive Acquisition Agreement,
then the proceeds of such
Page 16 of 22 pages
<PAGE>
payment will be allocated first to the payment of the foregoing costs and
expenses, and thereafter to Johnson and Liberty in accordance with their
respective equity interests in Newco.
9. Indemnification. If, after Newco and the Company enter into a
---------------
definitive acquisition agreement (the "Acquisition Agreement"), either party
(the "Acting Party") breaches or causes Newco to breach such Acquisition
Agreement (including, but not limited to, as a result of any breach of any
representation, warranty or covenant in this Agreement) and the Company
thereafter (x) terminates such Acquisition Agreement and (y) asserts a claim or
cause of action against Newco or the parties, then the Acting Party shall
indemnify the other party for any loss, damage, or expense (including reasonable
legal fees and expenses) arising out of or relating to such claim or cause of
action. This right of indemnification shall apply notwithstanding the status of
the parties as joint and several obligors under the Acquisition Agreement. If
both parties have contributed to cause the events described in the first
sentence of this Section, then liability will be allocated between the parties
in proportion to their relative fault.
10. Salomon Engagement Letter. (a) Johnson and Liberty intend to
-------------------------
enter into an engagement letter (the "Engagement Letter", which term shall
include for purposes of this Agreement any related indemnification letter or
agreement) with Salomon Brothers Inc ("Salomon") retaining Salomon as the
financial advisor for Johnson and Liberty in connection with the Acquisition.
Johnson and Liberty agree that (i) any amounts payable to Salomon under the
Engagement Letter prior to the consummation of the Acquisition shall be paid by
the parties in proportion to their respective equity interests in Newco
(assuming for such purpose that each
Page 17 of 22 pages
<PAGE>
party had contributed all Company Securities beneficially owned by it in
accordance with Section 2 and (ii) any amounts payable to Salomon under the
Engagement Letter upon the consummation of the Acquisition shall be paid or
reimbursed by the Company, or the entity succeeding to the Company's business,
following the Acquisition.
(b) The parties anticipate that the Engagement Letter will contain
certain joint and several obligations of Johnson and Liberty to indemnify
Salomon and/or certain other persons specified in the Engagement Letter (the
"Indemnified Persons") against certain liabilities. Johnson and Liberty agree
that if any act or omission of a party gives rise to an obligation to indemnify
any Indemnified Person (including, but not limited to, as a result of any breach
of a representation or warranty of such party contained in the Engagement Letter
or the failure by such party to perform any obligations undertaken by it in the
Engagement Letter) or gives rise to a cause of action by Salomon against the
parties pursuant to the Engagement Letter, then, notwithstanding that the
parties may be jointly and severally liable for such loss, damage or expense
pursuant to the Engagement Letter, such breaching or defaulting party shall
indemnify the other party for any loss, damage or expense such other party may
incur or suffer as a result of such act or omission. If the acts or omissions
of both parties cause or contribute to such loss, damage or expense, then such
loss, damage or expense shall be allocated between Johnson and Liberty in
proportion to the relative fault of each party. In the event that (i) the
Acquisition is not consummated and this Agreement is terminated and (ii) either
Johnson or Liberty (or an affiliate thereof) subsequently seeks or proposes to
acquire all or a significant portion of the Company's equity securities or
assets, without the participation of the other party (a "Subsequent Attempt"),
then the party
Page 18 of 22 pages
<PAGE>
engaging in the Subsequent Attempt shall indemnify and hold harmless the other
party (the "Non-Acquiring Party") from any loss, damage or reasonable expense
incurred in connection with (x) claims which arise out of or relate to the
Subsequent Attempt and which assert that the Non-Acquiring Party is engaged in
or responsible for the Subsequent Attempt in the capacity of a bidder or
acquiror, or (y) claims made against the Non-Acquiring Party pursuant to
paragraph 5 of the Engagement Letter.
11. Governing Law. This letter shall be governed by and construed in
-------------
accordance with the substantive law of the State of New York without regard to
conflict of law principles thereof.
12. Termination. This Agreement may be terminated (a) by the mutual
-----------
agreement of the parties or (b) by either party if the Acquisition has not been
consummated on or before June 30, 1998. In the event this Agreement is
terminated, the parties agree to take such actions as may be necessary in order
to terminate the Engagement Letter simultaneous with the termination of this
Agreement.
13. Binding Obligation. It is understood that this Agreement
------------------
constitutes a legally binding obligation of the parties hereto.
14. Severability. If one or more provisions of this Agreement are
------------
held to be invalid or unenforceable under applicable law, portions of such
provisions, or such provisions in
Page 19 of 22 pages
<PAGE>
their entirety, to the extent necessary, shall be severed from this Agreement,
and the balance of this Agreement shall be enforceable in accordance with its
terms; provided, however, that to the extent either party considers such invalid
-------- -------
or unenforceable provision to be an essential or material provision of this
Agreement, the parties shall negotiate in good faith to include a replacement
provision for such invalid or unenforceable provision, which provision maintains
for the parties the relative benefits and obligations attributable to such
invalid or unenforceable provision.
15. Counterparts. This Agreement may be executed in multiple
------------
identical counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
16. No Third-Party Beneficiaries. No provision of this Agreement is
----------------------------
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
17. Disputes. The parties shall use their reasonable best efforts to
--------
resolve any dispute or controversy arising under this Agreement (a "Dispute,"
which term shall not include any failure to agree or disagreement of the type
referred to in the penultimate sentence of Section 1 hereof). Before
instituting any formal proceedings with regard to any Dispute, Johnson and the
Chief Executive Officer of Liberty shall meet personally to discuss and attempt
to resolve the Dispute. If Johnson and the Chief Executive Officer of Liberty
are unable to resolve such Dispute within a reasonable period of time after the
commencement of such informal discussions, then upon notice from one party to
the other the Dispute shall be resolved by arbitration by a panel of
Page 20 of 22 pages
<PAGE>
three arbitrators in accordance with the rules of the American Arbitration
Association (the "AAA"), whose decision shall be final, binding and non-
appealable. The venue for such arbitration shall be the Washington D.C.
metropolitan area. The expenses of both parties in the arbitration, including
reasonable attorneys' fees and arbitration expenses, shall be paid by the party
that does not prevail in such arbitration. If each party prevails in part, the
arbitrators will determine the appropriate allocation of expenses among the
parties. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. Each party agrees to be bound by the
decision of the arbitrators and not to initiate legal proceedings in any court
to have such decision overturned or reversed on any grounds.
Page 21 of 22 pages
<PAGE>
If the foregoing terms are acceptable to you, please indicate your
agreement by executing and returning the enclosed copy of this letter as
indicated.
Very truly yours,
LIBERTY MEDIA CORPORATION
By: /s/ Robert R. Bennett
-------------------------------------
Name: Robert R. Bennett
Title: President and
Chief Executive Officer
Accepted and Agreed to:
/s/ Robert L. Johnson
- ------------------------------
Robert L. Johnson
Page 22 of 22 pages
