<PAGE>
As filed with the Securities and Exchange Commission on December 29, 1995
REGISTRATION NO. 33 - _____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
______________________
TELE-COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 5619 DTC Parkway 84-1260157
(State or other jurisdiction Englewood, Colorado (I.R.S. Employer
of incorporation or 80111-3000 Identification No.)
organization) (303) 267-5500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Stephen M. Brett, Esq.
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
(303) 267-5500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after the effective date of the registration
statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ___________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) OFFERING PRICE PER UNIT (2) OFFERING PRICE (2) REGISTRATION FEE (3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tele-Communications, Inc.
Series A, Liberty Media 1,259,650 $26.0625 $32,829,628.12 $11,320.56
Group Common Stock,
par value $1.00 per share
====================================================================================================================================
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act of 1933,this Registration
Statement also relates to such additional shares of Tele-Communications,
Inc. Series A Liberty Media Group Common Stock as may be issued as a result
of the anti-dilution provisions contained in certain convertible notes
issued by TCI-UA, Inc. described elsewhere in this Registration Statement.
(2) Estimated solely for purposes of determining the registration fee in
accordance with Rule 457(c) on the basis of the average of the high and low
prices of the Tele-Communications, Inc. Series A Liberty Media Group Common
Stock, par value $1.00 per share, of Tele-Communications, Inc. on December
26, 1995.
(3) A filing fee of $100 was paid in connection with the filing of Registration
No. 33-57399, which filing fee is associated with 500 shares of Tele-
Communications, Inc. Series A TCI Group Common Stock, par value $1.00 per
share ("Series A TCI Group Common Stock"), to which the Prospectus included
herein also relates. A filing fee of $4,606,909 was paid in connection with
the filing of Registration No. 33-54263, which filing fee is associated with
5,038,100 shares of Series A TCI Group Common Stock, to which the Prospectus
included herein also relates.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS INCLUDED
HEREIN ALSO RELATES TO (I) 500 SHARES OF SERIES A TCI GROUP COMMON STOCK
REGISTERED PURSUANT TO REGISTRATION NO. 33-57399 AND (II) 5,038,100 SHARES OF
SERIES A TCI GROUP COMMON STOCK REGISTERED PURSUANT TO REGISTRATION NO. 33-
54263.
<PAGE>
Subject to Completion, dated December 29, 1995
PROSPECTUS
Tele-Communications, Inc.
Tele-Communications, Inc. Series A TCI Group Common Stock
($1.00 par value)
Tele-Communications, Inc. Series A Liberty Media Group Common Stock
($1.00 par value)
This Prospectus relates to shares of the Tele-Communications, Inc. Series A
TCI Group Common Stock, par value $1.00 per share (the "TCI Group Series A
Common Stock"), of Tele-Communications, Inc., a Delaware corporation (the
"Company" or "TCI"), and shares of Tele-Communications, Inc. Series A Liberty
Media Group Common Stock, par value $1.00 per share (the "LMG Series A Common
Stock"), of the Company, to be issued from time to time upon conversion of up
to approximately $30 million aggregate principal amount of certain convertible
notes (the "Notes") of TCI-UA, Inc. ("TCI-UA"), an indirect, wholly-owned
subsidiary of the Company, and the offering and sale of such shares by the
holders thereof (each a "Selling Stockholder") from time to time thereafter
(all such shares being hereinafter referred to collectively as the "Shares").
See "Shares Being Offered" and "Selling Stockholders." As of the date of this
Prospectus, the approximately $30 million aggregate principal amount of Notes
are convertible at the current conversion rate into an aggregate of 5,038,600
shares of TCI Group Series A Common Stock and 1,259,650 shares of LMG Series A
Group Common Stock.
On August 3, 1995, the Company's Restated Certificate of Incorporation was
amended to, among other things, (i) redesignate the Company's Class A Common
Stock, par value $1.00 per share ("Class A Common Stock"), as TCI Group Series
A Common Stock and the Company's Class B Common Stock, par value $1.00 per
share, as Tele-Communications, Inc. Series B TCI Group Common Stock, par value
$1.00 per share (the "TCI Group Series B Common Stock" and, together with the
TCI Group Series A Common Stock, the "TCI Group Common Stock"), and (ii)
authorize two additional series of the Company's common stock, designated as
LMG Series A Common Stock and the Tele-Communications, Inc. Series B Liberty
Media Group Common Stock, par value $1.00 per share (the "LMG Series B Common
Stock" and, together with the LMG Series A Common Stock, the "Liberty Media
Group Common Stock"). Thereafter, the Company distributed to holders of TCI
Group Common Stock one-fourth of a share of the corresponding series of
Liberty Media Group Common Stock in respect of each share of TCI Group Common
Stock held of record as of August 4, 1995, the record date for the
distribution.
Both series of TCI Group Common Stock are identical in all respects, except
(i) each share of TCI Group Series B Common Stock has ten votes and each share
of TCI Group Series A Common Stock has one vote and (ii) each share of TCI
Group Series B Common Stock is convertible, at the option of the holder, into
one share of TCI Group Series A Common Stock. Similarly, both series of
Liberty Media Group Common Stock are identical in all respects, except (i)
each share of LMG Series B Common Stock has ten votes and each share of LMG
Series A Common Stock has one vote and (ii) each share of LMG Series B Common
Stock is convertible, at the option of the holder, into one share of LMG
Series A Common Stock. The shares of TCI Group Series A Common Stock and LMG
Series A Common Stock are not convertible into shares of TCI Group Series B
Common Stock and LMG Series B Common Stock, respectively.
Shares of the TCI Group Series A Common Stock, the TCI Group Series B Common
Stock, the LMG Series A Common Stock and the LMG Series B Common Stock are
traded on the Nasdaq National Market under the symbols "TCOMA", "TCOMB",
"LBTYA" and "LBTYB", respectively.
(continued)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _____________, 1995.
<PAGE>
Each of the shares of TCI Group Series A Common Stock and LMG Series A
Common Stock offered hereby may be offered for sale and sold by the Selling
Stockholders from time to time in varying amounts, including in block
transactions, on the Nasdaq National Market at then prevailing prices or in
private transactions at prices and on terms to be determined at the time of
sale. The Shares may be sold by the Selling Stockholders directly, through an
underwritten offering, through agents designated from time to time or to or
through broker-dealers designated from time to time. To the extent required,
the number and series of Shares to be sold, the name of the Selling
Stockholders, the purchase price, the public offering price, if applicable,
the name of any such agent or broker-dealer, and any applicable commissions,
discounts or other items constituting compensation to such underwriters,
agents or broker-dealers with respect to a particular offering will be set
forth in a supplement or supplements to this Prospectus (each, a "Prospectus
Supplement"). The aggregate proceeds to the Selling Stockholders from the
sale of the Shares so offered will be the purchase price of the Shares sold
less (i) the aggregate commissions, discounts and other compensation, if any,
paid by the Selling Stockholders to underwriters, agents or broker-dealers and
(ii) certain other expenses of the offering and sale of the Shares that will
be the responsibility of the Selling Stockholders. See "Selling
Stockholders". The Selling Stockholders may also sell all or a portion of the
Shares pursuant to Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), to the extent that such sales may be made in
compliance with such Rule. See "Plan of Distribution". The Company will not
receive any proceeds from the sale of the Shares. The Company knows of no
selling arrangement between any underwriter, agent or broker-dealer and the
Selling Stockholders.
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of any of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
discount or commission received by them and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all
amendments and exhibits, referred to as the "Registration Statement") under
the Securities Act, with respect to the Shares. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the
Shares and the Company, reference is made to the Registration Statement.
Statements contained herein or in any document incorporated herein by
reference concerning the provisions of any contract or other document are
not necessarily complete and, in each instance, reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement or such other document. Each such statement is
qualified in its entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the
Commission. Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; Suite 1400, 500 West Madison Street,
Chicago, Illinois 60661; and at Suite 1300, 7 World Trade Center, New
York, New York 10048; and copies of such material can be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents filed with the Commission (File No. 0-20421): (i) the
Company's Annual Report on Form 10-K for the year ended December 31, 1994,
as amended by Form 10-K/A (Amendment No. 1), (ii) the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995
and September 30, 1995 (as amended by Form 10-Q/A (Amendment No. 1)), (iii)
the Company's Current Reports on Form 8-K, dated January 23, 1995, February
3, 1995 (as amended by Form 8-K/A), February 13, 1995, February 15, 1995,
April 6, 1995, April 20, 1995 (as amended by Form 8-K/A), May 4, 1995 (as
amended by Form 8-K/A), July 26, 1995, August 10, 1995 and December 18,
1995, and (iv) the financial statements and notes thereto of TeleCable
Corporation as of December 31, 1993 and 1992 and for each of the two years
in the period ended December 31, 1993, included in the Company's Current
Report on Form 8-K, dated August 26, 1994.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
hereof and prior to the termination of the offering of the Shares described
in this Prospectus shall be deemed to be incorporated herein by reference
and to be a part hereof from the respective dates of the filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all of the documents incorporated by reference herein,
other than certain exhibits to such documents (unless such exhibits are
specifically incorporated by reference into the documents that this
Prospectus incorporates). Such requests should be addressed to Stephen M.
Brett, Esq., Executive Vice President and General Counsel, Tele-
Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood,
Colorado 80111-3000; telephone (303) 267-5500.
3
<PAGE>
THE COMPANY
The Company, through its subsidiaries and affiliates, is principally
engaged in the construction, acquisition, ownership and operation of cable
television systems and the provision of satellite-delivered video
entertainment, information and home shopping programming services to
various video distribution media, principally cable television systems.
The Company believes that, measured by the number of basic subscribers, it
is the largest provider of cable television services in the United States.
The Company also (i) has investments in cable and telecommunications
operations and television programming in certain international markets and
(ii) is involved, as an investor and a developer, in new television and
telecommunications ventures and technologies. The Company is a Delaware
corporation and its principal executive offices are located at Terrace
Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303)
267-5500.
SHARES BEING OFFERED
On July 9, 1986, the Company entered into a Stock Purchase Agreement (the
"Naify Agreement") with Marshall Naify, Robert A. Naify, a corporation
owned by them, certain members of their respective families and certain
trusts established for the benefit of such persons and certain other
members of their respective families (the "Naify Family"), pursuant to
which the Company acquired from the Naify Family in December of 1986 all of
the shares of common stock of United Artists Communications, Inc. ("UACI")
owned by them, which represented approximately 55% of the UACI shares then
outstanding. The consideration paid for each share of UACI common stock
acquired by the Company pursuant to the Naify Agreement was $18.498, of
which $6.64 was paid in cash and the balance of $11.858 per share was
represented by Notes.
The Notes are general unsecured obligations of TCI-UA, the principal
amount of which is payable on December 12, 2021 and bears interest at the
rate of 1.85% per annum until December 12, 2003 and no interest thereafter.
The Notes, when issued, were convertible at any time at the option of the
holder into shares of Class A Common Stock. As a result of the
redesignation of the Class A Common Stock into TCI Group Series A Common
Stock and the subsequent distribution to the holders of TCI Group Series A
Common Stock of shares of LMG Series A Common Stock, the Notes are
presently convertible at any time at the option of the holder into one
share of TCI Group Series A Common Stock and one-forth of a share of LMG
Series A Common Stock for each $5.95 principal amount of Notes, subject to
adjustment under stated circumstances. The shares of TCI Group Series A
Common Stock and LMG Series A Common Stock issuable upon the conversion of
the Notes are hereinafter referred to collectively as the "Conversion
Shares."
As of the date of this Prospectus, Notes in the aggregate principal
amount of $230,310,150 are outstanding, which Notes are convertible at the
current conversion rate into an aggregate of approximately 38,707,574
shares of TCI Group Series A Common Stock and 9,676,893 Shares of LMG
Series A Common Stock (excluding fractional shares issuable upon conversion
of any particular Note). The names of the members of the Naify Family who
currently hold the Notes, the aggregate principal amount of the Notes held
by each such holder and the number of whole shares of TCI Group Series A
Common Stock and LMG Series A Common Stock into which the Notes of such
holder are convertible at the current conversion rate are set forth under
"Selling Stockholders" below. In accordance with the terms of the Naify
Agreement, neither the Notes nor the Conversion Shares may be transferred
unless they are registered under the Securities Act or an exemption from
registration is available. The Notes have not been registered under the
Securities Act and neither the Company nor TCI-UA has any obligation to
register the Notes. The Naify Agreement provides the holders of the Notes
with certain demand and incidental or "piggyback" registration rights with
respect to the Conversion Shares. Specifically, the demand registration
rights permit holders of the Notes from time to time to require the Company
to register Conversion Shares under the Securities Act for sale in an
underwritten public offering, except that the Company is not obligated to
effect such registration more than once in any six month period or if, in
order to comply with such request, the Company could be required to undergo
a special interim audit (unless the parties requesting registration agree
to pay all fees and expenses of such special interim
4
<PAGE>
audit). The incidental registration rights permit the holders of the Notes
to have their Conversion Shares included in certain types of registration
statements proposed to be filed by the Company. The Company's agreement to
register the Shares covered by this Prospectus as described below is
contained in a letter agreement which has been filed as an Exhibit to the
Registration Statement and is separate from the Company's obligation to
register Conversion Shares under the Naify Agreement. The full text of the
Naify Agreement has been filed as an Exhibit to the Registration Statement
of which this Prospectus forms a part. See "Available Information."
The Company has agreed, for the benefit of the holders of the Notes, to
register the Conversion Shares to be issued from time to time upon
conversion of up to approximately $30 million aggregate principal amount of
the Notes and the resale of such shares from time to time by the holders
thereof. The Shares offered hereby represent the number of Conversion
Shares issuable upon conversion of such aggregate principal amount of
Notes, as such number and type of shares may be increased or decreased as a
result of adjustments to the conversion rate pursuant to the anti-dilution
provisions of the Notes. At the current conversion rate, 5,038,600 shares
of TCI Group Series A Common Stock and 1,259,650 Shares of LMG Series A
Common Stock are issuable upon conversion of approximately $30 million
aggregate principal amount of the Notes. The Conversion Shares will be
included in the Shares covered by this Prospectus on the basis of the order
in which the Notes, up to an aggregate principal amount of approximately
$30 million, are converted.
SELLING STOCKHOLDERS
A member of the Naify Family, or any person to whom a member of the Naify
Family has transferred Notes in a transaction permitted by the Naify
Agreement, for whose account Shares are being offered hereby is referred to
herein as a "Selling Stockholder". It is anticipated that, from time to
time after the date hereof, record ownership of certain of the Notes that
are currently held in trust for the benefit of members of the Naify Family
will be transferred to the beneficiaries of the applicable trust and/or
that record ownership of certain of the Notes may be transferred to living
trusts of which the current record owner or (in the case of Notes currently
held in trust) beneficial owner would be a trustee with sole control and
complete discretion to revoke or amend such trust during such person's
lifetime. The table set forth below and the footnotes thereto provide the
following information: the names of the members of the Naify Family who
currently hold Notes, the aggregate principal amount of the Notes held by
each such holder, the number of whole shares of TCI Group Series A Common
Stock and LMG Series A Common Stock into which the Notes of such holder are
convertible at the current conversion rate and the number of shares of TCI
Group Series A Common Stock and LMG Series A Common Stock beneficially
owned as of the date of this Prospectus by each such holder. The
Conversion Shares to be included in the Shares covered by this Prospectus
will be on the basis of the order in which the Notes, up to an aggregate
principal amount of approximately $30 million, are converted; therefore no
estimate can be given as to the number of shares of TCI Group Series A
Common Stock and LMG Series A Common Stock that will be held by each
Selling Stockholder upon the termination of this offering. However, the
name of the Selling Stockholder in connection with any particular sale of
Shares, the number of Shares to be sold and the number and (if one percent
or more) the percentage of the outstanding shares of TCI Group Series A
Common Stock or LMG Series A Common Stock to be owned by such Selling
Stockholder after completion of any offering hereunder will be specified in
a Prospectus Supplement.
5
<PAGE>
<TABLE>
<CAPTION>
NO. OF
WHOLE
SHARES OF
NO. OF WHOLE LMG
SHARES OF TCI NO. OF WHOLE SERIES A
GROUP SERIES A SHARES OF TCI COMMON NO. OF WHOLE
AGGREGATE COMMON STOCK GROUP SERIES A STOCK SHARES OF LMG
PRINCIPAL INTO WHICH COMMON STOCK INTO WHICH SERIES A COMMON
AMOUNT OF NOTES ARE BENEFICIALLY NOTES ARE STOCK BENEFICIALLY
NOTEHOLDER NOTES HELD CONVERTIBLE OWNED (1) CONVERTIBLE OWNED (1)
- ---------- --------------- --------------- ---------------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Marshall Naify $ 73,924,889.75 12,424,351 12,944,918 (2) 3,106,087 3,236,229 (2)
Robert A. Naify 133,559,215.23 22,446,926 23,297,254 (3) 5,611,731 5,824,313 (3)
Valerie Naify 960,498.00 161,428 161,428 40,357 40,357
Leslie C. Naify 1,383,117.12 232,456 263,083 (4) 58,114 65,770 (4)
Christie M. Naify 1,383,117.12 232,456 263,083 (5) 58,114 65,770 (5)
Robert J. Naify 1,383,117.12 232,456 263,083 (6) 58,114 65,770 (6)
Marshall Naify, 2,032,556.06 341,606 341,606 85,401 85,401
Robert A. Naify and
Georgette N.
Rosekrans, Trustees of
the Michael N. Naify
testamentary trust for
the benefit of Marshall
Naify
John M. Sherwood, as 182,233.74 30,627 30,627 7,656 7,656
Trustee of the Leslie
C. Naify 1981 Trust
John M. Sherwood, as 182,233.74 30,627 30,627 7,656 7,656
Trustee of the Christie
M. Naify 1981 Trust
John M. Sherwood, as 182,233.74 30,627 30,627 7,656 7,656
Trustee of the Robert
J. Naify 1981 Trust
Christina C. Dierker 139,734.67 23,484 23,484 5,871 5,871
as Trustee of the
Christina C. Dierker
Trust Dated October
10, 1995
John M. Sherwood, as 139,734.67 23,484 23,484 5,871 5,871
Trustee of the Acela
Cortese 1983 Trust
John M. Sherwood, as 139,734.67 23,484 23,484 5,871 5,871
Trustee of the
Christina E. Naify
1985 Trust
John M. Sherwood, as 114,619.43 19,263 19,263 4,815 4,815
Trustee of the Drew
Michael Andrade 1986
Trust
John M. Sherwood, as 132,856.16 22,328 23,902 5,582 5,975
Trustee of the Marsha
J. Naify Living Trust
John M. Sherwood, as 650,506.16 109,328 112,264 27,332 28,066
Trustee of the Michael
S. Naify 1981 Trust
John M. Sherwood, as 472,006.16 79,328 82,264 19,832 20,566
Trustee of the
Christina E. Naify
1981 Trust
Michael S. Naify 973,335.44 163,585 505,845 (7) 40,896 126,461 (7)
Christina E. Naify 875,120.40 147,079 226,407 (8) 36,769 56,601 (8)
</TABLE>
6
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Marshall Naify, as 1,368,481.30 229,996 229,996 57,499 57,499
Trustee under the
Michael S. Naify 1963
Trust
Richard Naify 3,833,900.00 644,352 743,005 (9) 161,088 185,751 (9)
Josephine Naify 5,995,736.82 1,007,686 1,141,076 (9) 251,921 285,269 (9)
James Naify 301,172.93 50,617 60,317 12,654 15,079
--------------- ---------- ---------- --------- ---------
</TABLE>
(1) The number of shares specified in this table as being beneficially owned
by each Selling Stockholder assumes the conversion of all Notes
beneficially owned by such Selling Stockholder, except as set forth in the
footnotes.
(2) This number includes the number of shares issuable upon conversion of
Notes owned by record by Marshall Naify, Robert A. Naify and Georgette N.
Rosekrans, as Trustees of the Michael N. Naify testamentary trust for the
benefit of Marshall Naify (341,606 shares of TCI Group Series A Common
Stock and 85,401 shares of LMG Series A Common Stock). This number does
not include, although Marshall Naify may be deemed to beneficially own,
the number of shares issuable upon conversion of Notes owned by record by
Marshall Naify as sole trustee under the Michael S. Naify 1963 Trust
(229,996 shares of TCI Group Series A Common Stock and 57,499 shares of
LMG Series A Common Stock).
(3) This number does not include, although Robert A. Naify may be deemed to
beneficially own, the number of shares issuable upon conversion of Notes
owned of record by Robert A. Naify as co-trustee under the Michael N.
Naify testamentary trust for the benefit of Marshall Naify.
(4) This number includes the number of shares issuable upon conversion of
Notes owned of record by the Leslie C. Naify 1981 Trust (30,627 shares of
TCI Group Series A Common Stock and 7,656 shares of LMG Series A Common
Stock) of which Leslie C. Naify is the sole beneficiary.
(5) This number includes the number of shares issuable upon conversion of
Notes owned of record by the Christie M. Naify 1981 Trust (30,627 shares
of TCI Group Series A Common Stock and 7,656 shares of LMG Series A Common
Stock) of which Christie M. Naify is the sole beneficiary.
(6) This number includes the number of shares issuable upon conversion of
Notes owned of record by the Robert J. Naify 1981 Trust (30,627 shares of
TCI Group Series A Common Stock and 7,656 shares of LMG Series A Common
Stock) of which Robert J. Naify is the sole beneficiary.
(7) This number includes the number of shares issuable upon conversion of
Notes owned of record by two trusts separately identified above of which
Michael S. Naify is sole beneficiary (the Michael S. Naify 1981 Trust and
the Michael S. Naify 1963 Trust)
(8) This number includes the number of shares issuable upon conversion of
Notes owned of record by the Christina E. Naify 1981 Trust (79,328 shares
of TCI Group Series A Common Stock and 19,832 shares of LMG Series A
Common Stock) of which Christina E. Naify is sole beneficiary.
(9) This number includes 66,070 shares of TCI Group Series A Common Stock and
16,517 shares of LMG Series A Common Stock owned jointly by Josephine
Naify and Richard Naify.
Neither the Company nor any of its affiliates has had any material
relationship with any member of the Naify Family within the past three
years, except that Robert A. Naify has been a director of the Company since
June 12, 1987. Any other material relationship between the Company or any
of its affiliates, on the one hand, and a Selling Stockholder, on the
other, within three years prior to the date of a sale by such Selling
Stockholder hereunder will be described in the Prospectus Supplement
relating to such sale. The Company has agreed to bear all costs and
expenses of registering the Shares under the Securities Act and certain
state securities laws, including registration fees, its legal and
accounting fees and expenses and photocopying costs. The Selling
Stockholders will bear all other expenses of the offering and sale of the
Shares, including any underwriting discounts, selling commissions or other
compensation to agents, broker-dealers or underwriters, transfer fees or
taxes, if any, and fees and expenses of counsel and other advisers, if any,
to the Selling Stockholders. The Company has agreed to indemnify the
Selling Stockholders against certain liabilities, including civil
liabilities under the Securities Act.
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PLAN OF DISTRIBUTION
The Shares may be offered for sale and sold by the Selling Stockholders
in one or more transactions, including block transactions, at a fixed price
or prices (which may be changed), at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at prices
determined on a negotiated or competitive bid basis. The Shares may be
sold by the Selling Stockholders directly, through an underwritten
offering, through agents designated from time to time or to or through
broker-dealers designated from time to time.
If any Shares are sold in an underwritten offering, such Shares may be
acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. Unless otherwise indicated in the
applicable Prospectus Supplement, the obligations of any underwriters to
purchase Shares will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all of the Shares specified in
such Prospectus Supplement if any are purchased.
Shares may be sold through a broker-dealer acting as agent or broker for
the Selling Stockholders, or to a broker-dealer acting as principal. In
the latter case, the broker-dealer may then resell such Shares to the
public at varying prices to be determined by such broker-dealer at the time
of resale.
The Company has been advised by the Selling Stockholders that they have
not, as of the date of this Prospectus, entered into any arrangement with
an underwriter, agent or broker-dealer for the sale of the Shares.
The Selling Stockholders may also sell all or a portion of the Shares
pursuant to Rule 144 promulgated under the Securities Act, to the extent
that such sales may be made in compliance with such Rule.
The Selling Stockholders and any agents or broker-dealers that
participate with the Selling Stockholders in the distribution of any of the
Shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any discount or commission received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
To the extent required, the number of Shares to be sold, the purchase
price, the public offering price, if applicable, the name of any
underwriter, agent or broker-dealer, and any applicable commissions,
discounts or other items constituting compensation to such underwriters,
agents or broker-dealers with respect to a particular offering will be set
forth in an accompanying Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following description of certain terms of the common stock of TCI
does not purport to be complete and is qualified in its entirety by
reference to the Restated Certificate of Incorporation, as amended, of TCI
(the "TCI Charter") which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part.
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GENERAL
The TCI Charter provides, among other things, that TCI is authorized to
issue 2,725,000,000 shares of common stock, par value $1.00 per share (the
"TCI Common Stock"), of which 1,750,000,000 shares are designated Tele-
Communications, Inc. Series A TCI Group Common Stock, 150,000,000 shares
are designated Tele-Communications, Inc. Series B TCI Group Common Stock,
750,000,000 shares are designated Tele-Communications, Inc. Series A
Liberty Media Group Common Stock, and 75,000,000 shares are designated
Tele-Communications, Inc. Series B Liberty Media Group Common Stock.
As of November 1, 1995, 571,576,645 shares of TCI Group Series A Common
Stock, 84,801,554 shares of TCI Group Series B Common Stock, 142,892,796
shares of LMG Series A Common Stock and 21,200,336 shares of LMG Series B
Common Stock (in each case net of shares held in treasury).
TCI GROUP COMMON STOCK AND LIBERTY MEDIA GROUP COMMON STOCK
CERTAIN DEFINITIONS
As used herein, the following terms have the meanings specified below:
"Committed Acquisition Shares" means (a) the shares of LMG Series A
Common Stock that TCI had, prior to the record date for the Distribution,
agreed to issue, but as of such record date had not issued, and (b) the
shares of LMG Series A Common Stock that are issuable upon conversion,
exercise or exchange of Convertible Securities that TCI had, prior to the
record date for the Distribution, agreed to issue, but as of such record
date had not issued, in each case including obligations of TCI to issue
shares of TCI's Class A Common Stock, par value $1.00 per share (which has
been redesignated TCI Group Series A Common Stock), which as a result of
the Distribution, constitute obligations to issue, among other securities,
LMG Series A Common Stock or Convertible Securities which are convertible
into or exercisable or exchangeable for LMG Series A Common Stock;
provided, however that Committed Acquisition Shares will not include any
shares of Liberty Media Group Common Stock issuable upon conversion,
exercise or exchange of Pre-Distribution Convertible Securities. The type
and amount of Committed Acquisition Shares issuable will be appropriately
adjusted to reflect subdivisions and combinations of the LMG Series A
Common Stock and dividends or distributions of shares of LMG Series A
Common Stock or LMG Series B Common Stock to holders of LMG Series A Common
Stock and other reclassifications of the LMG Series A Common Stock, in each
case occurring (or the record date for which occurs) after the
Distribution. The shares of LMG Series A Common Stock that will be
issuable upon conversion of a class of Liberty Media Group Preferred Stock
expected to be issued in a separate transaction will also constitute
Committed Acquisition Shares.
"Convertible Securities" means any securities of TCI (other than any
series of TCI Common Stock) that are convertible into, exchangeable for or
evidence the right to purchase any shares of any series of TCI Common
Stock, whether upon conversion, exercise, exchange, pursuant to
antidilution provisions of such securities or otherwise.
"DGCL" means the General Corporation Law of the State of Delaware.
The "Distribution" means the distribution paid by TCI on August 10,
1995 of one-fourth of one share of LMG Series A Common Stock on each
outstanding share of TCI Group Series A Group
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Common Stock and one-fourth of one share of LMG Series B Common Stock on
each outstanding share of TCI Group Series B Group Common Stock to holders
of record on August 4, 1995.
The "Inter-Group Interest" means any equity value of TCI attributable
to the Liberty Media Group that is not represented by outstanding shares of
Liberty Media Group Common Stock. The Inter-Group Interest is represented
by the Number of Shares Issuable with Respect to the Inter-Group Interest.
The "Inter-Group Interest Fraction" means a fraction the numerator of
which is the Number of Shares Issuable with Respect to the Inter-Group
Interest and the denominator of which is the sum of such Number of Shares
Issuable with Respect to the Inter-Group Interest and the aggregate number
of shares of Liberty Media Group Common Stock outstanding.
The "Liberty Media Group" means:
(a) the interest of TCI or any of its subsidiaries in Liberty Media
Corporation or any of its subsidiaries (including any successor thereto
by merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business Transaction
(as defined below under "--Conversion and Redemption-Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock")) and their
respective properties and assets,
(b) all assets and liabilities of TCI or any of its subsidiaries to
the extent attributed to any of the properties or assets referred to in
clause (a) of this sentence, whether or not such assets or liabilities
are assets and liabilities of Liberty Media Corporation or any of its
subsidiaries (or a successor as described in clause (a) of this
sentence),
(c) all assets and properties contributed or otherwise transferred to
the Liberty Media Group from the TCI Group, and
(d) the interest of TCI or any of its subsidiaries in the businesses,
assets and liabilities acquired by TCI or any of its subsidiaries for the
Liberty Media Group, as determined by the Board of Directors of TCI (the
"TCI Board of Directors");
provided that (i) from and after any dividend or other distribution with
respect to any shares of Liberty Media Group Common Stock (other than a
dividend or other distribution payable in shares of Liberty Media Group
Common Stock, with respect to which adjustment will be made as described in
clause (a) of the definition of "Number of Shares Issuable with Respect to
the Inter-Group Interest," or in other securities of TCI attributed to the
Liberty Media Group for which provision will be made as described in the
penultimate sentence of this definition), the Liberty Media Group will no
longer include an amount of assets or properties equal to the aggregate
amount of such kind of assets or properties so paid in respect of shares of
Liberty Media Group Common Stock multiplied by a fraction the numerator of
which is equal to the Inter-Group Interest Fraction in effect immediately
prior to the record date for such dividend or other distribution and the
denominator of which is equal to the Outstanding Interest Fraction in
effect immediately prior to the record date for such dividend or other
distribution and (ii) from and after any transfer of assets or properties
from the Liberty Media Group to the TCI Group, the Liberty Media Group will
no longer include the assets or properties so transferred. If TCI pays a
dividend or makes any other distribution with respect to shares of Liberty
Media Group Common Stock payable in securities of TCI attributed to the
Liberty Media Group other than Liberty Media Group Common Stock, the TCI
Group will be deemed to hold an amount of such other securities equal to
the amount so
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distributed multiplied by the fraction specified in clause (i) of this
definition (determined as of a time immediately prior to the record date
for such dividend or other distribution), and to the extent interest or
dividends are paid or other distributions are made on such other securities
so distributed to the holders of Liberty Media Group Common Stock, the
Liberty Media Group will no longer include a corresponding ratable amount
of the kind of assets paid as such interest or dividends or other
distributions in respect of such securities so deemed to be held by the TCI
Group. TCI may also, to the extent any such other securities constitute
Convertible Securities which are at the time convertible, exercisable or
exchangeable, cause such Convertible Securities deemed to be held by the
TCI Group to be deemed to be converted, exercised or exchanged (and to the
extent the terms of such Convertible Securities require payment or delivery
of consideration in order to effect such conversion, exercise or exchange,
the Liberty Media Group will in such case include an amount of the kind of
properties or assets required to be paid or delivered as such consideration
for the amount of the Convertible Securities deemed converted, exercised or
exchanged as if such Convertible Securities were outstanding), in which
case such Convertible Securities will no longer be deemed to be held by the
TCI Group or attributed to the Liberty Media Group.
"Market Value" of any class or series of capital stock of TCI on any
day means the average of the high and low reported sale prices regular way
of a share of such class or series on such day (if such day is a trading
day, and if such day is not a trading day, on the trading day immediately
preceding such day) or in case no such reported sale takes place on such
trading day the average of the reported closing bid and asked prices
regular way of a share of such class or series on such trading day, in
either case on the Nasdaq National Market, or if the shares of such class
or series are not quoted on such Nasdaq National Market on such trading
day, the average of the closing bid and asked prices of a share of such
class or series in the over-the-counter market on such trading day as
furnished by any New York Stock Exchange member firm selected from time to
time by TCI, or if such closing bid and asked prices are not made available
by any such New York Stock Exchange member firm on such trading day, the
market value of a share of such class or series as determined by the TCI
Board of Directors; provided that for purposes of determining the ratios
described under "-Conversion and Redemption-Conversion at the Option of
TCI" and "-Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock" and "-Liquidation," (a) the "Market Value" of any share
of any series of TCI Common Stock on any day prior to the "ex" date or any
similar date for any dividend or distribution paid or to be paid with
respect to such series of TCI Common Stock will be reduced by the fair
market value of the per share amount of such dividend or distribution as
determined by the TCI Board of Directors and (b) the "Market Value" of any
share of any series of TCI Common Stock on any day prior to (i) the
effective date of any subdivision (by stock split or otherwise) or
combination (by reverse stock split or otherwise) of outstanding shares of
such series of TCI Common Stock or (ii) the "ex" date or any similar date
for any dividend or distribution with respect to any such series of TCI
Common Stock in shares of such series of TCI Common Stock will be
appropriately adjusted to reflect such subdivision, combination, dividend
or distribution.
The "Number of Shares Issuable with Respect to the Inter-Group
Interest" is currently zero and will from time to time be
(a) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of the
LMG Series A Common Stock and dividends or distributions of shares of LMG
Series A Common Stock or LMG Series B Common Stock to holders of LMG
Series A Common Stock and other reclassifications of LMG Series A Common
Stock,
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(b) decreased (but not to less than zero) by (i) the aggregate number of
shares of LMG Series A Common Stock issued or sold by TCI after the
Distribution other than Committed Acquisition Shares, the proceeds of
which are attributed to the TCI Group, (ii) the aggregate number of
shares of LMG Series A Common Stock issued or delivered upon conversion,
exercise or exchange of Convertible Securities (other than Pre-
Distribution Convertible Securities and Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares), the proceeds of which are attributed to the TCI Group, (iii) the
aggregate number of shares of LMG Series A Common Stock issued or
delivered by TCI as a dividend or distribution to holders of TCI Group
Series A Common Stock and TCI Group Series B Common Stock, (iv) the
aggregate number of shares of LMG Series A Common Stock issued or
delivered upon the conversion, exercise or exchange of any Convertible
Securities (other than Pre-Distribution Convertible Securities and
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares) issued or delivered by TCI
after the Distribution as a dividend or distribution or by
reclassification or exchange to holders of TCI Group Series A Common
Stock and TCI Group Series B Common Stock and (v) the aggregate number of
shares of LMG Series A Common Stock (rounded, if necessary, to the
nearest whole number), equal to the aggregate fair value (as determined
by the TCI Board of Directors) of assets or properties attributed to the
Liberty Media Group that are transferred from the Liberty Media Group to
the TCI Group in consideration of a reduction in the Number of Shares
Issuable with Respect to the Inter-Group Interest, divided by the Market
Value of one share of LMG Series A Common Stock as of the date of such
transfer, and
(c) increased by (i) the aggregate number of any shares of LMG Series
A Common Stock and LMG Series B Common Stock which are retired or
otherwise cease to be outstanding following their purchase with funds
attributed to the TCI Group, (ii) a number (rounded, if necessary, to the
nearest whole number), equal to the fair value (as determined by the TCI
Board of Directors) of assets or properties, theretofore attributed to
the TCI Group that are contributed to the Liberty Media Group in
consideration of an increase in the Number of Shares Issuable with
Respect to the Inter-Group Interest, divided by the Market Value of one
share of LMG Series A Common Stock as of the date of such contribution
and (iii) the aggregate number of shares of LMG Series A Common Stock and
LMG Series B Common Stock into or for which Convertible Securities are
deemed to be converted, exercised or exchanged pursuant to the last
sentence of the definition of "TCI Group."
TCI will not issue or sell shares of LMG Series B Common Stock in respect
of a reduction in the Number of Shares Issuable with Respect to the Inter-
Group Interest. Whenever a change in the Number of Shares Issuable with
Respect to the Inter-Group Interest occurs, TCI will prepare and file a
statement of such change with the Secretary of TCI.
The "Outstanding Interest Fraction" means a fraction the numerator of
which is the aggregate number of shares of Liberty Media Group Common Stock
outstanding and the denominator of which is the sum of such aggregate
number of shares of Liberty Media Group Common Stock outstanding and the
Number of Shares Issuable with Respect to the Inter-Group Interest.
"Pre-Distribution Convertible Securities" means Convertible Securities
that were outstanding on the record date for the Distribution and were,
prior to such date, convertible into or exercisable or exchangeable for
shares of TCI's Class A Common Stock, par value $1.00 per share (which has
been redesignated TCI Group Series A Common Stock).
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The "TCI Group" means as of any date of determination thereof:
(a) the interest of TCI or any of its subsidiaries in all of the
businesses in which TCI or any of its subsidiaries (or any of their
predecessors or successors) is or has been engaged, directly or
indirectly, and the respective assets and liabilities of TCI or any of
its subsidiaries, other than any businesses, assets or liabilities of the
Liberty Media Group;
(b) a proportionate interest in the businesses, assets and liabilities
of the Liberty Media Group equal to the Inter-Group Interest Fraction as
of such date;
(c) from and after any dividend or other distribution with respect to
shares of Liberty Media Group Common Stock (other than a dividend or
other distribution payable in shares of Liberty Media Group Common Stock,
with respect to which adjustment will be made as described in clause (a)
of the definition of "Number of Shares Issuable with Respect to the
Inter-Group Interest," or in other securities of TCI attributed to the
Liberty Media Group, for which provision will be made as described in the
penultimate sentence of this definition), an amount of assets or
properties theretofore included in the Liberty Media Group equal to the
aggregate amount of such kind of assets or properties so paid in respect
of such dividend or other distribution with respect to shares of Liberty
Media Group Common Stock multiplied by a fraction the numerator of which
is equal to the Inter-Group Interest Fraction in effect immediately prior
to the record date for such dividend or other distribution and the
denominator of which is equal to the Outstanding Interest Fraction in
effect immediately prior to the record date for such dividend or other
distribution; and
(d) any assets or properties transferred from the Liberty Media Group
to the TCI Group;
provided that, from and after any contribution or transfer of any assets or
properties from the TCI Group to the Liberty Media Group, the TCI Group
will no longer include such assets or properties so contributed or
transferred (other than pursuant to its interest in the businesses, assets
and liabilities of the Liberty Media Group described in clause (b) above).
If TCI pays a dividend or makes any other distribution with respect to
shares of Liberty Media Group Common Stock payable in other securities of
TCI attributed to the Liberty Media Group, the TCI Group will be deemed to
hold an amount of such other securities equal to the amount so distributed
multiplied by the fraction specified in clause (c) of this definition
(determined as of a time immediately prior to the record date for such
dividend or other distribution), and to the extent interest or dividends
are paid or other distributions are made on such other securities so
distributed to holders of Liberty Media Group Common Stock, the TCI Group
will include a corresponding ratable amount of the kind of assets paid as
such interest or dividends or other distributions in respect of such
securities so deemed to be held by the TCI Group. TCI may also, to the
extent any such other securities constitute Convertible Securities which
are at the time convertible, exercisable or exchangeable, cause such
Convertible Securities deemed to be held by the TCI Group to be deemed to
be converted, exercised or exchanged (and to the extent the terms of such
Convertible Securities require payment or delivery of consideration in
order to effect such conversion, exercise or exchange, the TCI Group will
in such case no longer include an amount of the kind of properties or
assets required to be paid or delivered as such consideration for the
amount of the Convertible Securities deemed converted, exercised or
exchanged as if such Convertible Securities were outstanding), in which
case such Convertible Securities will no longer be deemed to be held by the
TCI Group or attributed to the Liberty Media Group.
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VOTING RIGHTS
Holders of TCI Group Series A Common Stock are entitled to one vote
for each share of such stock held, holders of TCI Group Series B Common
Stock are entitled to ten votes for each share of such stock held, holders
of LMG Series A Common Stock are entitled to one vote for each share of
such stock held and holders of LMG Series B Common Stock are entitled to
ten votes for each share of such stock held, on all matters presented to
such stockholders. Except as may otherwise be required by the laws of the
State of Delaware or, with respect to any class of TCI's preferred stock or
any series of such a class, in the TCI Charter (including any resolution or
resolutions providing for the establishment of such class or series
pursuant to authority vested in the TCI Board of Directors by the TCI
Charter), the holders of TCI Group Common Stock and the holders of Liberty
Media Group Common Stock and the holders of each class or series of TCI's
preferred stock, if any, entitled to vote thereon will vote as one class
for all purposes. See "--Other Matters."
Neither the holders of TCI Group Series A Common Stock or TCI Group
Series B Common Stock, nor the holders of LMG Series A Common Stock or LMG
Series B Common Stock, have any rights to vote as a separate class or
series on any matter coming before the stockholders of TCI, except with
respect to certain limited class and series voting rights provided under
the DGCL. Under the DGCL, the approval of the holders of a majority of the
outstanding shares of any class of capital stock of a corporation, voting
separately as a class, is required to approve any amendment to the charter
that would alter or change the powers, preferences or special rights of the
shares of such class so as to affect them adversely, provided that, if any
amendment would alter or change the powers, preferences or special rights
of one or more series of the class so as to affect them adversely, but
would not so affect the entire class, then only the shares of the series so
affected by the amendment would be entitled to vote thereon separately as a
class.
DIVIDENDS
Subject to the prior payment of dividends on outstanding shares of
TCI's preferred stock, dividends may be paid as determined by the TCI Board
of Directors (i) on the TCI Group Common Stock out of the lesser of (x) the
TCI Group Available Dividend Amount and (y) funds of TCI legally available
therefor under the DGCL and (ii) on the Liberty Media Group Common Stock
out of the lesser of (x) the Liberty Media Group Available Dividend Amount
and (y) funds of TCI legally available therefor under the DGCL. Under the
DGCL the amount of the funds of TCI legally available for the payment of
dividends on any series of TCI Common Stock is determined on the basis of
the entire corporation and not just the Liberty Media Group or the TCI
Group. Consequently, the amount of legally available funds will be reduced
by the amount of any net losses of the Liberty Media Group or the TCI Group
and any dividends or distributions on, or repurchases of, the TCI Group
Common Stock or the Liberty Media Group Common Stock and dividends on, or
certain repurchases of, TCI Preferred Stock. Certain loan agreements to
which certain subsidiaries of TCI are parties or are subject contain
restricted payment provisions that limit the amount of dividends, other
than stock dividends, that those companies may pay. Future loan agreements
may also contain similar restrictions and limits.
The "TCI Group Available Dividend Amount," as of any date, means
either (a) the excess of (i) an amount equal to the total assets of the TCI
Group less the total liabilities (not including preferred stock) of the TCI
Group as of such date over (ii) the aggregate par value of, or any greater
amount determined to be capital in respect of, all outstanding shares of
TCI Group Common Stock and each class or series of TCI's preferred stock
attributed to the TCI Group or (b) in case there is no such excess, an
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amount equal to TCI Earnings (Loss) Attributable to the TCI Group (if
positive) for the fiscal year in which such date occurs and/or the
preceding fiscal year. "TCI Earnings (Loss) Attributable to the TCI
Group," for any period, means the net earnings or loss of the TCI Group for
such period determined on a basis consistent with the determination of the
net earnings or loss of the TCI Group for such period as presented in the
combined financial statements of the TCI Group for such period, including
income and expenses of TCI attributed to the operations of the TCI Group on
a substantially consistent basis, including without limitation, corporate
administrative costs, net interest and income taxes. The TCI Group
Available Dividend Amount is intended to be similar to the amount that
would be legally available for the payment of dividends on the TCI Group
Common Stock under the DGCL if the TCI Group were a separate Delaware
corporation. There can be no assurance that there will be a TCI Group
Available Dividend Amount.
The "Liberty Media Group Available Dividend Amount," as of any date,
means the product of the Outstanding Interest Fraction and either (a) the
excess of (i) an amount equal to the total assets of the Liberty Media
Group less the total liabilities (not including preferred stock) of the
Liberty Media Group as of such date over (ii) the aggregate par value of,
or any greater amount determined to be capital in respect of, all
outstanding shares of Liberty Media Group Common Stock and each class or
series of TCI's preferred stock attributed to the Liberty Media Group or
(b) in case there is no such excess, an amount equal to TCI Earnings (Loss)
Attributable to the Liberty Media Group (if positive) for the fiscal year
in which such date occurs and/or the preceding fiscal year. "TCI Earnings
(Loss) Attributable to the Liberty Media Group," for any period, means the
net earnings or loss of the Liberty Media Group for such period determined
on a basis consistent with the determination of the net earnings or loss of
the Liberty Media Group for such period as presented in the combined
financial statements of the Liberty Media Group for such period, including
income and expenses of TCI attributed to the operations of the Liberty
Media Group on a substantially consistent basis, including, without
limitation, corporate administrative costs, net interest and income taxes.
The Liberty Media Group Available Dividend Amount is intended to be similar
to the amount that would be legally available for the payment of dividends
on the Liberty Media Group Common Stock under the DGCL if the Liberty Media
Group were a separate Delaware corporation. There can be no assurance that
there will be a Liberty Media Group Available Dividend Amount.
Except for dividends declared or paid as described below under "--
Share Distributions" and "--Conversion and Redemption-Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock," any
dividends paid on the TCI Group Series A Common Stock or the TCI Group
Series B Common Stock will be paid only on both series, in equal amounts
per share, and any dividends paid on the LMG Series A Common Stock or the
LMG Series B Common Stock will be paid only on both series, in equal
amounts per share.
The TCI Board of Directors, subject to the provisions described herein
under "--Dividends" and below under "--Share Distributions," has the
authority and discretion to declare and pay dividends on the TCI Group
Common Stock or the Liberty Media Group Common Stock in equal or unequal
amounts, notwithstanding the relationship between the TCI Group Available
Dividend Amount and the Liberty Media Group Available Dividend Amount, the
respective amounts of prior dividends declared on, or liquidation rights
of, the TCI Group Common Stock or the Liberty Media Group Common Stock or
any other factor.
At the time of any dividend or other distribution on the outstanding
shares of Liberty Media Group Common Stock (including any dividend of Net
Proceeds from the Disposition of all or
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substantially all of the properties and assets of the Liberty Media Group
as described below under "--Conversion and Redemption-Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock"), the TCI
Group will (if at such time there is an Inter-Group Interest) be credited,
and the Liberty Media Group will be charged (in addition to the charge for
the dividend or other distribution paid or distributed in respect of
outstanding shares of Liberty Media Group Common Stock), with an amount
equal to the product of (i) the aggregate amount of such dividend or
distribution paid or distributed in respect of outstanding shares of
Liberty Media Group Common Stock times (ii) a fraction the numerator of
which is the Inter-Group Interest Fraction and the denominator of which is
the Outstanding Interest Fraction.
SHARE DISTRIBUTIONS
Distributions on TCI Group Common Stock. If at any time after the
Distribution a distribution paid in TCI Group Common Stock, Liberty Media
Group Common Stock, any other securities of TCI or any other person (a
"share distribution") is to be made with respect to the TCI Group Common
Stock, such share distribution will be declared and paid only as follows:
(i) a share distribution consisting of shares of TCI Group Series A
Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of TCI Group Series A
Common Stock) to holders of TCI Group Series A Common Stock and
TCI Group Series B Common Stock, on an equal per share basis; or
consisting of shares of TCI Group Series B Common Stock (or
Convertible Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series B Common Stock) to
holders of TCI Group Series A Common Stock and TCI Group Series B
Common Stock, on an equal per share basis; or consisting of
shares of TCI Group Series A Common Stock (or Convertible
Securities convertible into or exercisable or exchangeable for
shares of TCI Group Series A Common Stock) to holders of TCI
Group Series A Common Stock and, on an equal per share basis,
shares of TCI Group Series B Common Stock (or like Convertible
Securities convertible into or exercisable or exchangeable for
shares of TCI Group Series B Common Stock) to holders of TCI
Group Series B Common Stock;
(ii) a share distribution consisting of shares of LMG Series A Common
Stock (or Convertible Securities convertible into or exercisable
or exchangeable for shares of LMG Series A Common Stock) to
holders of TCI Group Series A Common Stock and TCI Group Series B
Common Stock, on an equal per share basis; provided that the sum
of (a) the aggregate number of shares of LMG Series A Common
Stock to be so issued (or the number of such shares which would
be issuable upon conversion, exercise or exchange of any
Convertible Securities to be so issued) and (b) the number of
shares of such series that are subject to issuance upon
conversion, exercise or exchange of any Convertible Securities
then outstanding that are attributed to the TCI Group (other than
Pre-Distribution Convertible Securities and other than
Convertible Securities convertible into or exercisable or
exchangeable for Committed Acquisition Shares) is less than or
equal to the Number of Shares Issuable with Respect to the Inter-
Group Interest; and
(iii) a share distribution consisting of any class or series of
securities of TCI or any other person other than TCI Group Common
Stock or Liberty Media Group Common Stock (or Convertible
Securities convertible into or exercisable or exchangeable for
shares of TCI Group Common Stock or Liberty Media Group Common
Stock), either on the basis
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of a distribution of identical securities, on an equal per share
basis, to holders of TCI Group Series A Common Stock and TCI
Group Series B Common Stock or on the basis of a distribution of
one class or series of securities to holders of TCI Group Series
A Common Stock and another class or series of securities to
holders of TCI Group Series B Common Stock, provided that the
securities so distributed (and, if the distribution consists of
Convertible Securities, the securities into which such
Convertible Securities are convertible or for which they are
exercisable or exchangeable) do not differ in any respect other
than their relative voting rights and related differences in
designation, conversion, redemption and share distribution
provisions, with holders of shares of TCI Group Series B Common
Stock receiving the class or series having the higher relative
voting rights (without regard to whether such rights differ to a
greater or lesser extent than the corresponding differences in
voting rights, designation, conversion, redemption and share
distribution provisions between the TCI Group Series A Common
Stock and the TCI Group Series B Common Stock), provided that if
the securities so distributed constitute capital stock of a
subsidiary of TCI, such rights will not differ to a greater
extent than the corresponding differences in voting rights,
designation, conversion, redemption and share distribution
provisions between the TCI Group Series A Common Stock and the
TCI Group Series B Common Stock, and provided in each case that
such distribution is otherwise made on an equal per share basis.
TCI will not reclassify, subdivide or combine the TCI Group Series A
Common Stock without reclassifying, subdividing or combining the TCI Group
Series B Common Stock, on an equal per share basis, and TCI will not
reclassify, subdivide or combine the TCI Group Series B Common Stock
without reclassifying, subdividing or combining the TCI Group Series A
Common Stock, on an equal per share basis.
Distributions on Liberty Media Group Common Stock. If at any time a
share distribution is to be made with respect to the Liberty Media Group
Common Stock, such share distribution will be declared and paid only as
follows (or as described under "-- Conversion and Redemption" with respect
to the redemptions and other distributions referred to therein):
(i) a share distribution consisting of shares of LMG Series A Common
Stock (or Convertible Securities convertible into or exercisable
or exchangeable for shares of LMG Series A Common Stock) to
holders of LMG Series A Common Stock and LMG Series B Common
Stock, on an equal per share basis; or consisting of shares of
LMG Series B Common Stock (or Convertible Securities convertible
into or exercisable or exchangeable for shares of LMG Series B
Common Stock) to holders of LMG Series A Common Stock and LMG
Series B Common Stock, on an equal per share basis; or consisting
of shares of LMG Series A Common Stock (or Convertible Securities
convertible into or exercisable or exchangeable for shares of LMG
Series A Common Stock) to holders of LMG Series A Common Stock
and, on an equal per share basis, shares of LMG Series B Common
Stock (or like Convertible Securities convertible into or
exercisable or exchangeable for shares of LMG Series B Common
Stock) to holders of LMG Series B Common Stock; and
(ii) a share distribution consisting of any class or series of
securities of TCI or any other person other than as described in
the immediately preceding clause (i) and other than TCI Group
Common Stock (or Convertible Securities convertible into or
exercisable or
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exchangeable for shares of TCI Group Series A Common Stock or TCI
Group Series B Common Stock), either on the basis of a
distribution of identical securities, on an equal per share
basis, to holders of LMG Series A Common Stock and LMG Series B
Common Stock or on the basis of a distribution of one class or
series of securities to holders of LMG Series A Common Stock and
another class or series of securities to holders of LMG Series B
Common Stock, provided that the securities so distributed (and,
if the distribution consists of Convertible Securities, the
securities into which such Convertible Securities are convertible
or for which they are exercisable or exchangeable) do not differ
in any respect other than their relative voting rights and
related differences in designation, conversion, redemption and
share distribution provisions, with holders of shares of LMG
Series B Common Stock receiving the class or series having the
higher relative voting rights (without regard to whether such
rights differ to a greater or lesser extent than the
corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between
the LMG Series A Common Stock and the LMG Series B Common Stock),
provided that if the securities so distributed constitute capital
stock of a subsidiary of TCI, such rights will not differ to a
greater extent than the corresponding differences in voting
rights, designation, conversion, redemption and share
distribution provisions between the LMG Series A Common Stock and
the LMG Series B Common Stock, and provided in each case that
such distribution is otherwise made on an equal per share basis.
TCI will not reclassify, subdivide or combine the LMG Series A Common
Stock without reclassifying, subdividing or combining the LMG Series B
Common Stock, on an equal per share basis, and TCI will not reclassify,
subdivide or combine the LMG Series B Common Stock without reclassifying,
subdividing or combining the LMG Series A Common Stock, on an equal per
share basis.
CONVERSION AND REDEMPTION
Conversion of TCI Group Series B Common Stock and LMG Series B Common
Stock at the Option of the Holder. Each share of TCI Group Series B Common
Stock is convertible, at the option of the holder thereof, into one share
of TCI Group Series A Common Stock. Each share of LMG Series B Common
Stock is convertible, at the option of the holder thereof, into one share
of LMG Series A Common Stock. Shares of TCI Group Series A Common Stock
are not convertible into shares of TCI Group Series B Common Stock, and
shares of LMG Series A Common Stock are not convertible into shares of LMG
Series B Common Stock.
Conversion of Liberty Media Group Common Stock at the Option of TCI.
The TCI Board of Directors may at any time declare that (i) all of the
outstanding shares of LMG Series A Common Stock will be converted into a
number (or fraction) of fully paid and nonassessable shares of TCI Group
Series A Common Stock equal to the Optional Conversion Ratio, and (ii) all
of the outstanding shares of LMG Series B Common Stock will be converted
into a number (or fraction) of fully paid and nonassessable shares of TCI
Group Series B Common Stock equal to the Optional Conversion Ratio.
For these purposes, the "Optional Conversion Ratio" means the quotient
(calculated to the nearest five decimal places) obtained by dividing (x)
the Liberty Media Group Common Stock Per Share Value by (y) the average
Market Value of one share of TCI Group Series A Common Stock over the 20-
trading day period ending on the trading day preceding the Appraisal Date.
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The "Liberty Media Group Private Market Value" means an amount equal
to the private market value of the Liberty Media Group as of the last day
of the calendar month preceding the month in which the last of the two
appraisers referred to in the immediately following sentence are selected
(the last day of such calendar month is hereinafter referred to as the
"Appraisal Date"). In the event that TCI determines to establish the
Liberty Media Group Private Market Value, two investment banking firms of
recognized national standing will be designated to determine the private
market value of the Liberty Media Group, one designated by TCI (the "First
Appraiser") and one designated by a committee of the TCI Board of Directors
all of whose members are independent directors as determined under Nasdaq
National Market rules (the "Second Appraiser"). The date upon which the
last of such appraisers is selected is hereinafter referred to as the
"Selection Date." Not later than 20 days after the Selection Date, the
First Appraiser and the Second Appraiser will each determine its initial
view as to the private market value of the Liberty Media Group as of the
Appraisal Date and will consult with one another with respect thereto. Not
later than the 30th day after the Selection Date, the First Appraiser and
the Second Appraiser will each have determined its final view as to such
private market value. If the higher of the respective final views of the
First Appraiser and the Second Appraiser as to such private market value
(the "Higher Appraised Amount") is not more than 120% of the lower of such
respective final views (the "Lower Appraised Amount"), the Liberty Media
Group Private Market Value (subject to any adjustment described in the
second succeeding paragraph) will be the average of those two amounts. If
the Higher Appraised Amount is more than 120% of the Lower Appraised
Amount, the First Appraiser and the Second Appraiser will agree upon and
jointly designate a third investment banking firm of recognized national
standing (the "Mutually Designated Appraiser") to determine such private
market value. The Mutually Designated Appraiser will not be provided with
any of the work of the First Appraiser and Second Appraiser. The Mutually
Designated Appraiser will, no later than the 20th day after the date the
Mutually Designated Appraiser is designated, determine such private market
value (the "Mutually Appraised Amount"), and the Liberty Media Group
Private Market Value (subject to any adjustment described in the second
succeeding paragraph) will be (i) if the Mutually Appraised Amount is
between the Lower Appraised Amount and the Higher Appraised Amount, (a) the
average of (1) the Mutually Appraised Amount and (2) the Lower Appraised
Amount or the Higher Appraised Amount, whichever is closer to the Mutually
Appraised Amount, or (b) the Mutually Appraised Amount, if neither the
Lower Appraised Amount nor the Higher Appraised Amount is closer to the
Mutually Appraised Amount, or (ii) if the Mutually Appraised Amount is
greater than the Higher Appraised Amount or less than the Lower Appraised
Amount, the average of the Higher Appraised Amount and the Lower Appraised
Amount. For these purposes, if any such investment banking firm expresses
its final view of the private market value of the Liberty Media Group as a
range of values, such investment banking firm's final view of such private
market value will be deemed to be the midpoint of such range of values.
Each of the investment banking firms referred to in the immediately
preceding paragraph will be instructed to determine the private market
value of the Liberty Media Group as of the Appraisal Date based upon the
amount a willing purchaser would pay to a willing seller, in an arm's
length transaction, if it were acquiring the Liberty Media Group, as if the
Liberty Media Group were a publicly traded non-controlled corporation and
the purchaser was acquiring all of the capital stock of such corporation
and without consideration of any potential regulatory constraints limiting
the potential purchasers of the Liberty Media Group other than that which
would have existed if the Liberty Media Group were a publicly traded non-
controlled entity.
Following the determination of the Liberty Media Group Private Market
Value, the investment banking firms whose final views of the private market
value of the Liberty Media Group were used in the calculation of the
Liberty Media Group Private Market Value will determine the Adjusted
Outstanding
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Shares of Liberty Media Group Common Stock together with any further
appropriate adjustments to the Liberty Media Group Private Market Value
resulting from such determination. The "Adjusted Outstanding Shares of
Liberty Media Group Common Stock" means a number, as determined by such
investment banking firms as of the Appraisal Date, equal to the sum of the
number of shares of Liberty Media Group Common Stock outstanding, the
Number of Shares Issuable with Respect to the Inter-Group Interest, the
number of Committed Acquisition Shares issuable, the number of shares of
Liberty Media Group Common Stock issuable upon the conversion, exercise or
exchange of all Pre-Distribution Convertible Securities and the number of
shares of Liberty Media Group Common Stock issuable upon the conversion,
exercise or exchange of those Convertible Securities (other than Pre-
Distribution Convertible Securities and other than Convertible Securities
which are convertible into or exercisable or exchangeable for Committed
Acquisition Shares) the holders of which would derive an economic benefit
from conversion, exercise or exchange of such Convertible Securities which
exceeds the economic benefit of not converting, exercising or exchanging
such Convertible Securities. The "Liberty Media Group Common Stock Per
Share Value" means the quotient obtained by dividing the Liberty Media
Group Private Market Value by the Adjusted Outstanding Shares of Liberty
Media Group Common Stock, provided that if such investment banking firms do
not agree on the determinations provided for in this paragraph, the Liberty
Media Group Common Stock Per Share Value will be the average of the
quotients so obtained on the basis of the respective determinations of such
firms.
If TCI determines to convert shares of LMG Series A Common Stock into
TCI Group Series A Common Stock and shares of LMG Series B Common Stock
into TCI Group Series B Common Stock at the Optional Conversion Ratio, such
conversion will occur on a conversion date on or prior to the 120th day
following the Appraisal Date. If TCI determines not to undertake such
conversion, TCI may at any time thereafter undertake to reestablish the
Liberty Media Group Common Stock Per Share Value as of a subsequent date.
Mandatory Dividend, Redemption or Conversion of Liberty Media Group
Common Stock. Upon the sale, transfer, assignment or other disposition,
whether by merger, consolidation, sale or contribution of assets or stock
or otherwise (a "Disposition"), in one transaction or a series of related
transactions by TCI and its subsidiaries of all or substantially all of the
properties and assets of the Liberty Media Group to one or more persons,
entities or groups (other than (a) in connection with the Disposition by
TCI of all of TCI's properties and assets in one transaction or a series of
related transactions in connection with the liquidation, dissolution or
winding up of TCI, (b) a dividend, other distribution or redemption in
accordance with any provision described under "--Dividends," "--Share
Distributions," "--Redemption in Exchange for Stock of Subsidiary" or "--
Liquidation Rights," (c) to any person, entity or group which TCI, directly
or indirectly, after giving effect to the Disposition, controls or (d) in
connection with a Related Business Transaction), TCI will on or prior to
the 85th trading day following the consummation of such Disposition,
either:
(i) subject to the limitations described above under "--Dividends,"
declare and pay a dividend in cash and/or securities or other
property (other than a dividend or distribution of TCI Common
Stock) to the holders of the outstanding shares of Liberty Media
Group Common Stock equally on a share for share basis (subject to
the provisions described in the last sentence of the paragraph
herein which defines the term "Net Proceeds"), in an aggregate
amount equal to the product of the Outstanding Interest Fraction
as of the record date for determining the holders entitled to
receive such dividend and the Net Proceeds of such Disposition;
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<PAGE>
(ii) provided that there are funds of TCI legally available therefor
and the Liberty Media Group Available Dividend Amount would have
been sufficient to pay a dividend in lieu thereof as described in
clause (i) of this paragraph:
(a) if such Disposition involves all (not merely
substantially all) of the properties and assets of the Liberty
Media Group, redeem all outstanding shares of LMG Series A Common
Stock and LMG Series B Common Stock in exchange for cash and/or
securities or other property (other than TCI Common Stock) in an
aggregate amount equal to the product of the Adjusted Outstanding
Interest Fraction as of the date of such redemption and the Net
Proceeds of such Disposition, such aggregate amount to be
allocated (subject to the provisions described in the last
sentence of the paragraph herein which defines the term "Net
Proceeds") to shares of LMG Series A Common Stock and LMG Series
B Common Stock in the ratio of the number of shares of each such
series outstanding (so that the amount of consideration paid for
the redemption of each share of LMG Series A Common Stock and
each share of LMG Series B Common Stock is the same); or
(b) if such Disposition involves substantially all (but not
all) of the properties and assets of the Liberty Media Group,
apply an aggregate amount of cash and/or securities or other
property (other than TCI Common Stock) equal to the product of
the Outstanding Interest Fraction as of the date shares are
selected for redemption and the Net Proceeds of such Disposition
to the redemption of outstanding shares of LMG Series A Common
Stock and LMG Series B Common Stock, such aggregate amount to be
allocated (subject to the provisions described in the last
sentence of the paragraph herein which defines the term "Net
Proceeds") to shares of LMG Series A Common Stock and LMG Series
B Common Stock in the ratio of the number of shares of each such
series outstanding, and the number of shares of each such series
to be redeemed to equal the lesser of (x) the whole number
nearest the number determined by dividing the aggregate amount so
allocated to the redemption of such series by the average Market
Value of one share of LMG Series A Common Stock during the ten-
trading day period beginning on the 16th trading day following
the consummation of such Disposition and (y) the number of shares
of such series outstanding (so that the amount of consideration
paid for the redemption of each share of LMG Series A Common
Stock and each share of LMG Series B Common Stock is the same);
or
(iii) convert (a) each outstanding share of LMG Series A Common Stock
into a number (or fraction) of fully paid and nonassessable
shares of TCI Group Series A Common Stock and (b) each
outstanding share of LMG Series B Common Stock into a number (or
fraction) of fully paid and nonassessable shares of TCI Group
Series B Common Stock, in each case equal to 110% of the average
daily ratio (calculated to the nearest five decimal places) of
the Market Value of one share of LMG Series A Common Stock to the
Market Value of one share of TCI Group Series A Common Stock
during the ten-trading day period referred to in clause (ii)(b)
of this paragraph.
For these purposes, "substantially all of the properties and assets of
the Liberty Media Group" as of any date means a portion of such properties
and assets that represents at least 80% of the then-current market value
(as determined by the TCI Board of Directors) of the properties and assets
of the Liberty Media Group as of such date.
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<PAGE>
A "Related Business Transaction" means any Disposition of all or
substantially all of the properties and assets of the Liberty Media Group
in which TCI receives as proceeds of such Disposition primarily equity
securities (including, without limitation, capital stock, convertible
securities, partnership or limited partnership interests and other types of
equity securities, without regard to the voting power or contractual or
other management or governance rights related to such equity securities) of
the purchaser or acquirer of such assets and properties of the Liberty
Media Group, any entity which succeeds (by merger, formation of a joint
venture enterprise or otherwise) to such assets and properties of the
Liberty Media Group or a third party issuer, which purchaser, acquirer or
other issuer is engaged or proposes to engage primarily in one or more
businesses similar or complementary to the businesses conducted by the
Liberty Media Group prior to such Disposition, as determined in good faith
by the TCI Board of Directors.
The "Adjusted Outstanding Interest Fraction" means a fraction the
numerator of which is the number of outstanding shares of Liberty Media
Group Common Stock and the denominator of which is the sum of (a) such
number of outstanding shares, (b) the Number of Shares Issuable with
Respect to the Inter-Group Interest, (c) the number of shares of Liberty
Media Group Common Stock issuable upon conversion, exercise or exchange of
Pre-Distribution Convertible Securities and (d) the number of Committed
Acquisition Shares issuable.
The "Net Proceeds" with respect to any Disposition of any of the
properties and assets of the Liberty Media Group means an amount, if any,
equal to the gross proceeds of such Disposition after any payment of, or
reasonable provision for, (a) any taxes payable by TCI in respect of such
Disposition or in respect of any resulting dividend or redemption (or which
would have been payable but for the utilization of tax benefits
attributable to the TCI Group), (b) any transaction costs, including,
without limitation, any legal, investment banking and accounting fees and
expenses and (c) any liabilities and other obligations (contingent or
otherwise) of, or attributed to, the Liberty Media Group, including,
without limitation, any indemnity or guarantee obligations incurred in
connection with the Disposition or any liabilities for future purchase
price adjustments and any preferential amounts plus any accumulated and
unpaid dividends and other obligations (without duplication of amounts
allocated for the satisfaction of TCI's obligations with respect to Pre-
Distribution Convertible Securities and Committed Acquisition Shares
issuable which are included in the determination of the Adjusted
Outstanding Interest Fraction) in respect of TCI's preferred stock
attributed to the Liberty Media Group. TCI may elect to pay the dividend
or redemption price referred to in clause (i) or (ii) above either in the
same form as the proceeds of the Disposition were received or in any other
combination of cash or securities or other property (other than TCI Common
Stock) that the TCI Board of Directors determines will have an aggregate
market value on a fully distributed basis, of not less than the amount of
the Net Proceeds. If the dividend or redemption price is paid in the form
of securities of an issuer other than TCI, the TCI Board of Directors may
determine either to (i) pay the dividend or redemption price in the form of
separate classes or series of securities, with one class or series of such
securities to holders of LMG Series A Common Stock and another class or
series of securities to holders of LMG Series B Common Stock, provided that
such securities (and, if such securities are convertible into or
exercisable or exchangeable for shares of another class or series of
securities, the securities so issuable upon such conversion, exercise or
exchange) do not differ in any respect other than their relative voting
rights and related differences in designation, conversion, redemption and
share distribution provisions with holders of shares of LMG Series B Common
Stock receiving the class or series having the higher relative voting
rights (without regard to whether such rights differ to a greater or lesser
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the LMG
Series A Common Stock and the LMG Series B Common Stock), provided that if
such securities constitute capital
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<PAGE>
stock of a subsidiary of TCI, such rights will not differ to a greater
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the LMG
Series A Common Stock and LMG Series B Common Stock, and otherwise such
securities will be distributed on an equal per share basis, or (ii) pay the
dividend or redemption price in the form of a single class of securities
without distinction between the shares received by the holders of LMG
Series A Common Stock and LMG Series B Common Stock.
At the time of any dividend made as a result of a Disposition referred
to above, the TCI Group will be credited, and the Liberty Media Group will
be charged (in addition to the charge for the dividend paid in respect of
outstanding shares of Liberty Media Group Common Stock), with an amount
equal to the product of (i) the aggregate amount paid in respect of such
dividend times (ii) a fraction the numerator of which is the Inter-Group
Interest Fraction and the denominator of which is the Outstanding Interest
Fraction.
Redemption in Exchange for Stock of Subsidiary. At any time at which
all of the assets and liabilities attributed to the Liberty Media Group are
held directly or indirectly by any one or more corporations all of the
capital stock of which is owned by TCI (the "Liberty Media Group
Subsidiaries"), the TCI Board of Directors may, subject to there being
funds of TCI legally available therefor, redeem on a pro rata basis, all of
the outstanding shares of Liberty Media Group Common Stock in exchange for
an aggregate number of outstanding fully paid and nonassessable shares of
common stock of each Liberty Media Group Subsidiary equal to the product of
the Adjusted Outstanding Interest Fraction and the number of all of the
outstanding shares of common stock of such Liberty Media Group Subsidiary.
In effecting such a redemption, the TCI Board of Directors may
determine either to (i) redeem shares of LMG Series A Common Stock and LMG
Series B Common Stock in exchange for shares of separate classes or series
of common stock of each Liberty Media Group Subsidiary with relative voting
rights and related differences in designation, conversion, redemption and
share distribution provisions not greater than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the LMG Series A Common Stock and LMG
Series B Common Stock, with holders of shares of LMG Series B Common Stock
receiving the class or series having the higher relative voting rights, or
(ii) redeem shares of LMG Series A Common Stock and LMG Series B Common
Stock in exchange for shares of a single class of common stock of each
Liberty Media Group Subsidiary without distinction between the shares
distributed to the holders of the two series of Liberty Media Group Common
Stock. If TCI determines to undertake a redemption as described in clause
(i) of the preceding sentence, the outstanding shares of common stock of
each Liberty Media Group Subsidiary not distributed to holders of Liberty
Media Group Common Stock would consist solely of the class or series having
the lower relative voting rights.
Certain Provisions Respecting Convertible Securities. Unless the
provisions of any class or series of Pre-Distribution Convertible
Securities or Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares provide
specifically to the contrary, after any conversion date or redemption date
on which all outstanding shares of Liberty Media Group Common Stock were
converted or redeemed, any share of Liberty Media Group Common Stock that
is issued on conversion, exercise or exchange of any Pre-Distribution
Convertible Securities or any Convertible Securities which are convertible
into or exercisable or exchangeable for Committed Acquisition Shares will,
immediately upon issuance pursuant to such conversion, exercise or exchange
and without any notice or any other action on the part of TCI or the TCI
Board of Directors or the holder of such share of Liberty Media Group
Common Stock, be converted into or redeemed in exchange for, as applicable,
the
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<PAGE>
kind and amount of shares of capital stock, cash and/or other securities or
property that a holder of such Pre-Distribution Convertible Securities or
any Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares would have been entitled to
receive pursuant to the terms of such securities had such terms provided
that the conversion, exercise or exchange privilege in effect immediately
prior to any such conversion or redemption of all outstanding shares of
Liberty Media Group Common Stock would be adjusted so that the holder of
any such Pre-Distribution Convertible Securities or any Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares thereafter surrendered for conversion,
exercise or exchange would be entitled to receive the kind and amount of
shares of capital stock, cash and/or other securities or property such
holder would have received as a result of such action had such securities
been converted, exercised or exchanged immediately prior thereto. With
respect to any Convertible Securities which are created, established or
otherwise first authorized for issuance subsequent to the record date for
the Distribution (other than Pre-Distribution Convertible Securities and
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares), the terms and provisions of
which do not provide for adjustments specifying the kind and amount of
capital stock, cash and/or securities or other property that such holder
would be entitled to receive upon the conversion, exercise or exchange of
such Convertible Securities following any conversion date or redemption
date on which all outstanding shares of Liberty Media Group Common Stock
were converted or redeemed, then upon such conversion, exercise or exchange
of such Convertible Securities, any share of Liberty Media Group Common
Stock that is issued on conversion, exercise or exchange of any such
Convertible Securities will, immediately upon issuance pursuant to such
conversion, exercise or exchange and without any notice or any other action
on the part of TCI or the TCI Board of Directors or the holder of such
share of Liberty Media Group Common Stock, be redeemed in exchange for, to
the extent assets of TCI are legally available therefor, the amount of $.01
per share in cash.
General Conversion and Redemption Provisions. Not later than the 10th
trading day following the consummation of a Disposition referred to above
under "--Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock," TCI will announce publicly by press release (i) the
Net Proceeds of such Disposition, (ii) the number of outstanding shares of
LMG Series A Common Stock and LMG Series B Common Stock, (iii) the number
of shares of LMG Series A Common Stock and LMG Series B Common Stock into
or for which Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof (and
stating which, if any, of such Convertible Securities constitute Pre-
Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) and the number of Committed Acquisition Shares issuable, (iv) the
Outstanding Interest Fraction as of a recent date preceding the date of
such notice and (v) the Adjusted Outstanding Interest Fraction as of a
recent date preceding the date of such notice. Not earlier than the 26th
trading day and not later than the 30th trading day following the
consummation of such Disposition, TCI will announce publicly by press
release which of the actions described in clauses (i), (ii) or (iii) of the
first paragraph under "--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock" it has irrevocably determined to take.
TCI also will cause to be given to each holder of outstanding shares
of LMG Series A Common Stock and LMG Series B Common Stock and to each
holder of Convertible Securities convertible into or exercisable or
exchangeable for shares of either such series (unless provision for notice
is otherwise made pursuant to the terms of such Convertible Securities) a
notice setting forth (i) if TCI has determined to pay a dividend described
in clause (i) of the first paragraph under "--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock" (a "Dividend
Election"), (x) the record date for
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<PAGE>
determining holders entitled to receive such dividend, which will not be
earlier than the 40th trading day, nor later than the 50th trading day,
following the consummation of such Disposition and (y) the anticipated
payment date of such dividend (which will not be more than 85 trading days
following the consummation of such Disposition), (ii) if TCI has determined
to redeem shares of Liberty Media Group Common Stock following a
Disposition of all (and not merely substantially all) of the properties and
assets of the Liberty Media Group as described in clause (ii)(a) of the
first paragraph under "--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock" (a "Full Redemption Election"), (x) the
redemption date (which will not be more than 85 trading days following the
consummation of such Disposition) and (y) a statement that all shares of
Liberty Media Group Common Stock outstanding on the redemption date will be
redeemed, (iii) if TCI has determined to redeem shares of Liberty Media
Group Common Stock following a Disposition of substantially all (but not
all) of the properties and assets of the Liberty Media Group as described
in clause (ii)(b) of the first paragraph under "--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock" (a "Partial
Redemption Election"), (x) a date not earlier than the 40th trading day and
not later than the 50th trading day following the consummation of such
Disposition on which shares of Liberty Media Group Common Stock then
outstanding will be selected for redemption and (y) the anticipated
redemption date (which will not be more than 85 trading days following the
consummation of such Disposition) and (iv) in the event of any conversion
as described above under "--Conversion at the Option of TCI" or as
described in clause (iii) of the first paragraph under "--Mandatory
Dividend, Redemption or Conversion of Liberty Media Group Common Stock" (a
"Conversion Election"), (x) a statement that all outstanding shares of
Liberty Media Group Common Stock will be converted and (y) the conversion
date (which will not be more than 85 trading days following the
consummation of the Disposition in the event of conversion pursuant to the
provisions described under "--Mandatory Dividend, Redemption or Conversion
of Liberty Media Group Common Stock" and which will not be more than 120
days after the Appraisal Date in the event of conversion pursuant to the
provisions described under "--Conversion at the Option of TCI"). Each
notice of a Dividend Election, a Full Redemption Election or a Partial
Redemption Election also will state, as applicable, (i) the kind of shares
of capital stock, cash and/or other securities or property to be
distributed in respect of shares of Liberty Media Group Common Stock (in
the case of a Dividend Election) or paid as the redemption price with
respect to shares of Liberty Media Group Common Stock outstanding on the
redemption date (in the case of a Full Redemption Election) or selected for
redemption (in the case of a Partial Redemption Election); (ii) the Net
Proceeds of such Disposition; (iii) in the case of a Dividend Election and
a Partial Redemption Election, the Outstanding Interest Fraction as of a
recent date preceding the date of such notice, and in the case of a Full
Redemption Election, the Adjusted Outstanding Interest Fraction as of a
recent date preceding the date of such notice; (iv) the number of
outstanding shares of LMG Series A Common Stock and LMG Series B Common
Stock and the number of shares of LMG Series A Common Stock and LMG Series
B Common Stock into or for which outstanding Convertible Securities are
then convertible, exercisable or exchangeable and the conversion, exercise
or exchange price thereof (and, in the case of a Full Redemption Election,
stating which, if any, of such Convertible Securities constitute Pre-
Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares and the number of Committed Acquisition Shares issuable); (v) in the
case of a Full Redemption Election, the place or places where certificates
for shares of Liberty Media Group Common Stock properly endorsed or
assigned for transfer (unless TCI waives such requirement), are to be
surrendered for delivery of certificates for shares of such capital stock,
cash and/or other securities or property; (vi) in the case of notice to
holders of Convertible Securities, a statement to the effect that holders
of such Convertible Securities will be entitled to receive such dividend
(in the case of a Dividend Election) or participate in such redemption (in
the case of a Full Redemption Election) or in the selection of shares for
redemption (in the case of a Partial Redemption Election) only if such
holders appropriately convert, exercise or
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exchange such Convertible Securities on or prior to the record date for
determining holders entitled to receive such dividend, the redemption date,
or the date fixed for the selection of shares to be redeemed, respectively,
and a statement as to what, if anything, such holder will be entitled to
receive pursuant to the terms of such Convertible Securities or, if
applicable, the provisions described under "--Certain Provisions Respecting
Convertible Securities" if such holder converts, exercises or exchanges
such Convertible Securities following such redemption date or date for
selection of shares to be redeemed, as applicable, and (vii) in the case of
a Partial Redemption Election, a statement that TCI will not be required to
register a transfer of any shares of Liberty Media Group Common Stock for a
period of 15 trading days next preceding the date fixed for selection of
shares to be redeemed. In the case of a Partial Redemption Election, TCI
also will cause to be given to each holder of shares of Liberty Media Group
Common Stock selected for redemption, a notice setting forth (i) the number
of shares of LMG Series A Common Stock and LMG Series B Common Stock held
by such holder to be redeemed, (ii) a statement that such shares of LMG
Series A Common Stock and LMG Series B Common Stock will be redeemed, (iii)
the redemption date (which will not be more than 85 trading days following
the consummation of such Disposition), (iv) the kind and per share amount
of shares of capital stock, cash and/or other securities or property to be
received by such holder with respect to each share of such Liberty Media
Group Common Stock to be redeemed, including details as to the calculation
thereof, and (v) the place or places where certificates for shares of such
Liberty Media Group Common Stock, properly endorsed or assigned for
transfer (unless TCI waives such requirement), are to be surrendered for
delivery of certificates for shares of such capital stock, cash and/or
other securities or property. The outstanding shares of Liberty Media
Group Common Stock to be redeemed will be redeemed by TCI pro rata among
the holders of Liberty Media Group Common Stock or by such other method as
may be determined by the TCI Board of Directors to be equitable.
In the case of a Conversion Election, TCI's notice also will state (i)
the per share number of shares of TCI Group Series A Common Stock or TCI
Group Series B Common Stock, as applicable, to be received with respect to
each share of LMG Series A Common Stock or LMG Series B Common Stock,
including details as to the calculation thereof, (ii) the place or places
where certificates for shares of Liberty Media Group Common Stock, properly
endorsed or assigned for transfer (unless TCI waives such requirement), are
to be surrendered, (iii) the number of outstanding shares of LMG Series A
Common Stock and LMG Series B Common Stock, the number of Committed
Acquisition Shares issuable and the number of shares of LMG Series A Common
Stock and LMG Series B Common Stock into or for which outstanding
Convertible Securities are then convertible, exercisable or exchangeable
and the conversion, exercise or exchange prices thereof and (iv) in the
case of a notice to holders of Convertible Securities, a statement to the
effect that holders of such Convertible Securities will be entitled to
participate in such conversion only if such holders appropriately convert,
exercise or exchange such Convertible Securities on or prior to the
conversion date and a statement as to what, if anything, such holders will
be entitled to receive pursuant to the terms of such Convertible Securities
or, if applicable, the provision described under "--Certain Provisions
Respecting Convertible Securities" if such holders convert, exercise or
exchange such Convertible Securities following such conversion date.
Notice of a Dividend Election will be given not later than the 30th
trading day following the consummation of the Disposition; notice of a Full
Redemption Election will be given not less than 35 trading days nor more
than 45 trading days prior to the redemption date; notice of a Partial
Redemption Election will be given not later than the 30th trading day
following the consummation of the Disposition and the notice to holders of
shares selected for redemption will be given promptly following such
selection, but not earlier than the 40th trading day and not later than the
50th trading day following the consummation of the Disposition; and notice
of a Conversion Election will be given not less than 35
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trading days nor more than 45 trading days prior to the conversion date.
All such notices will be sent by first-class mail, postage prepaid, to a
holder at such holder's address as the same appears on the transfer books
of TCI.
If TCI determines to redeem shares of LMG Series A Common Stock and
LMG Series B Common Stock as described above under "--Redemption in
Exchange for Stock of Subsidiary," TCI will promptly cause to be given to
each holder of LMG Series A Common Stock and LMG Series B Common Stock and
to each holder of Convertible Securities convertible into or exercisable or
exchangeable for shares of either such series (unless provision for such
notice is otherwise made pursuant to the terms of such Convertible
Securities), a notice setting forth (i) a statement that all outstanding
shares of Liberty Media Group Common Stock will be redeemed in exchange for
shares of common stock of the Liberty Media Group Subsidiaries, (ii) the
redemption date, (iii) the Adjusted Outstanding Interest Fraction as of a
recent date preceding the date of such notice, (iv) the place or places
where certificates for shares of Liberty Media Group Common Stock, properly
endorsed or assigned for transfer (unless TCI waives such requirement), are
to be surrendered for delivery of certificates for shares of common stock
of the Liberty Media Group Subsidiaries, (v) the number of outstanding
shares of LMG Series A Common Stock and LMG Series B Common Stock and the
number of shares of LMG Series A Common Stock and LMG Series B Common Stock
into or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange prices
thereof (and stating which, if any, of such Convertible Securities
constitute Pre-Distribution Convertible Securities or Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares) and the number of Committed Acquisition
Shares issuable, and (vi) in the case of a notice to holders of Convertible
Securities, a statement to the effect that holders of such Convertible
Securities will be entitled to receive shares of common stock of the
Liberty Media Group Subsidiaries upon redemption only if such holders
appropriately convert, exercise or exchange such Convertible Securities on
or prior to the redemption date referred to in clause (ii) of this sentence
and a statement as to what, if anything, such holders will be entitled to
receive pursuant to the terms of such Convertible Securities or, if
applicable, the provisions described under "--Certain Provisions Respecting
Convertible Securities" if such holders convert, exercise or exchange such
Convertible Securities following the redemption date. Such notice will be
sent by first-class mail, postage prepaid, not less than 35 trading days
nor more than 45 trading days prior to the redemption date, at such
holder's address as the same appears on the transfer books of TCI.
Neither the failure to mail any notice to any particular holder of
Liberty Media Group Common Stock or of Convertible Securities nor any
defect therein will affect the sufficiency thereof with respect to any
other holder of outstanding shares of Liberty Media Group Common Stock or
of Convertible Securities, or the validity of any conversion or redemption.
TCI will not be required to issue or deliver fractional shares of any
class of capital stock or any fractional securities to any holder of
Liberty Media Group Common Stock upon any conversion, redemption, dividend
or other distribution described above. In connection with the
determination of the number of shares of any class of capital stock that is
issuable or the amount of securities that is deliverable to any holder of
record upon any such conversion, redemption, dividend or other distribution
(including any fractions of shares or securities), TCI may aggregate the
number of shares of Liberty Media Group Common Stock held at the relevant
time by such holder of record. If the number of shares of any class of
capital stock or the amount of securities remaining to be issued or
delivered to any holder of Liberty Media Group Common Stock is a fraction,
TCI will, if such fraction is not issued or delivered to such holder, pay a
cash adjustment in respect of such fraction in an amount equal to the fair
market
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value of such fraction on the fifth trading day prior to the date such
payment is to be made (without interest). For purposes of the preceding
sentence, "fair market value" of any fraction will be (i) in the case of
any fraction of a share of capital stock of TCI, the product of such
fraction and the Market Value of one share of such capital stock and (ii)
in the case of any other fractional security, such value as is determined
by the TCI Board of Directors.
No adjustments in respect of dividends will be made upon the
conversion or redemption of any shares of Liberty Media Group Common Stock;
provided, however, that if the conversion date or the redemption date with
respect to the Liberty Media Group Common Stock is subsequent to the record
date for the payment of a dividend or other distribution thereon or with
respect thereto, the holders of shares of Liberty Media Group Common Stock
at the close of business on such record date will be entitled to receive
the dividend or other distribution payable on or with respect to such
shares on the date set for payment of such dividend or other distribution,
notwithstanding the conversion or redemption of such shares or TCI's
default in payment of the dividend or distribution due on such date.
Before any holder of shares of Liberty Media Group Common Stock will
be entitled to receive certificates representing shares of any kind of
capital stock or cash and/or securities or other property to be received by
such holder with respect to any conversion or redemption of shares of
Liberty Media Group Common Stock, such holder is required to surrender at
such place as TCI will specify certificates for such shares, properly
endorsed or assigned for transfer (unless TCI waives such requirement).
TCI will as soon as practicable after such surrender of certificates
representing shares of Liberty Media Group Common Stock deliver to the
person for whose account such shares were so surrendered, or to the nominee
or nominees of such person, certificates representing the number of whole
shares of the kind of capital stock or cash and/or securities or other
property to which such person is entitled, together with any payment for
fractional securities referred to above. If less than all of the shares of
Liberty Media Group Common Stock represented by any one certificate are to
be redeemed, TCI will issue and deliver a new certificate for the shares of
Liberty Media Group Common Stock not redeemed. TCI will not be required to
register a transfer of (i) any shares of Liberty Media Group Common Stock
for a period of 15 trading days next preceding any selection of shares of
Liberty Media Group Common Stock to be redeemed or (ii) any shares of
Liberty Media Group Common Stock selected or called for redemption. Shares
selected for redemption may not thereafter be converted pursuant to the
provisions described under "-Conversion at the Option of the Holder."
From and after any applicable conversion date or redemption date, all
rights of a holder of shares of Liberty Media Group Common Stock that were
converted or redeemed will cease except for the right, upon surrender of
the certificates representing shares of Liberty Media Group Common Stock,
to receive certificates representing shares of the kind and amount of
capital stock or cash and/or securities or other property for which such
shares were converted or redeemed, together with any payment for fractional
securities and such holder will have no other or further rights in respect
of the shares of Liberty Media Group Common Stock so converted or redeemed,
including, but not limited to, any rights with respect to any cash,
securities or other property which are reserved or otherwise designated by
TCI as being held for the satisfaction of TCI's obligations to pay or
deliver any cash, securities or other property upon the conversion,
exercise or exchange of any Convertible Securities outstanding as of the
date of such conversion or redemption or any Committed Acquisition Shares
which may then be issuable. No holder of a certificate that, immediately
prior to the applicable conversion date or redemption date for the Liberty
Media Group Common Stock, represented shares of Liberty Media Group Common
Stock will be entitled to receive any dividend or other distribution with
respect to shares of any kind of capital stock into or in exchange for
which the Liberty Media Group Common Stock was converted or redeemed until
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surrender of such holder's certificate for a certificate or certificates
representing shares of such kind of capital stock. Upon such surrender,
there will be paid to the holder the amount of any dividends or other
distributions (without interest) which theretofore became payable with
respect to a record date after the conversion date or redemption date, as
the case may be, but that were not paid by reason of the foregoing, with
respect to the number of whole shares of the kind of capital stock
represented by the certificate or certificates issued upon such surrender.
From and after a conversion date or redemption date, as the case may be,
for any shares of Liberty Media Group Common Stock, TCI will, however, be
entitled to treat the certificates for shares of Liberty Media Group Common
Stock that have not yet been surrendered for conversion or redemption as
evidencing the ownership of the number of whole shares of the kind or kinds
of capital stock for which the shares of Liberty Media Group Common Stock
represented by such certificates have been converted or redeemed,
notwithstanding the failure to surrender such certificates.
TCI will pay any and all documentary, stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of
any shares of capital stock and/or other securities on conversion or
redemption of shares of Liberty Media Group Common Stock. TCI will not,
however, be required to pay any tax that may be payable in respect of any
transfer involved in the issue and delivery of any shares of capital stock
in a name other than that in which the shares of Liberty Media Group Common
Stock so converted or redeemed were registered and no such issue or
delivery will be made unless and until the person requesting such issue has
paid to TCI the amount of any such tax, or has established to the
satisfaction of TCI that such tax has been paid.
LIQUIDATION RIGHTS
In the event of a liquidation, dissolution or winding up of TCI,
whether voluntary or involuntary, after payment or provision for payment of
the debts and other liabilities of TCI and subject to the prior payment in
full of the preferential amounts to which any class or series of TCI's
preferred stock is entitled, (i) the holders of the shares of TCI Group
Common Stock will share equally, on a share for share basis, in a
percentage of the funds of TCI remaining for distribution to its common
stockholders equal to 100% multiplied by the average daily ratio (expressed
as a decimal) of X/Z for the 20-trading day period ending on the trading
day prior to the date of the public announcement of such liquidation,
dissolution or winding up, and (ii) the holders of the shares of Liberty
Media Group Common Stock will share equally, on a share for share basis, in
a percentage of the funds of TCI remaining for distribution to its common
stockholders equal to 100% multiplied by the average daily ratio (expressed
as a decimal) of Y/Z for such 20-trading day period, where X is the
aggregate Market Capitalization of the TCI Group Series A Common Stock and
the TCI Group Series B Common Stock, Y is the aggregate Market
Capitalization of the LMG Series A Common Stock and the LMG Series B Common
Stock, and Z is the aggregate Market Capitalization of the TCI Group Series
A Common Stock, the TCI Group Series B Common Stock, the LMG Series A
Common Stock and the LMG Series B Common Stock. Neither a consolidation,
merger nor sale of assets will be construed to be a "liquidation,"
"dissolution" or "winding up" of TCI. The "Market Capitalization" of any
class or series of capital stock of TCI on any trading day means the
product of (i) the Market Value of one share of such class or series on
such trading day and (ii) the number of shares of such class or series
outstanding on such trading day.
No holder of Liberty Media Group Common Stock will have any special
right to receive specific assets of the Liberty Media Group in the case of
any dissolution, liquidation or winding up of TCI.
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DETERMINATIONS BY THE TCI BOARD OF DIRECTORS
The TCI Charter provides that any determinations made by the TCI Board
of Directors under any provision described under "--TCI Group Common Stock
and Liberty Media Group Common Stock" above will be final and binding on
all stockholders of TCI, except as may otherwise be required by law. Such
a determination would not be binding if it were established that the
determination was made in breach of a fiduciary duty of the TCI Board of
Directors. TCI will prepare a statement of any such determination by the
TCI Board of Directors respecting the fair market value of any properties,
assets or securities and will file such statement with the Secretary of
TCI.
PREEMPTIVE RIGHTS
Holders of the TCI Group Common Stock and Liberty Media Group Common
Stock do not have any preemptive rights to subscribe for any additional
shares of capital stock or other obligations convertible into or
exercisable for shares of capital stock that may hereafter be issued by
TCI.
OTHER MATTERS
The DGCL, the TCI Charter and TCI's Bylaws contain provisions which may
serve to discourage or make more difficult a change in control of TCI
without the support of the TCI Board of Directors or without meeting
various other conditions. The principal provisions of the DGCL and the
aforementioned corporate governance documents are outlined below.
DGCL Section 203, in general, prohibits a "business combination" between
a corporation and an "interested stockholder" within three years of the
date such stockholder became an "interested stockholder," unless (i) prior
to such date the board of directors of the corporation approved either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced,
exclusive of shares owned by directors who are also officers and by certain
employee stock plans or (iii) on or after such date, the business
combination is approved by the board of directors and authorized by the
affirmative vote at a stockholders' meeting of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested stockholder.
The term "business combination" is defined to include, among other
transactions between the interested stockholder and the corporation or any
direct or indirect majority-owned subsidiary thereof, a merger or
consolidation; a sale, pledge, transfer or other disposition (including as
part of a dissolution) of assets having an aggregate market value equal to
10% or more of either the aggregate market value of all assets of the
corporation on a consolidated basis or the aggregate market value of all
the outstanding stock of the corporation; certain transactions that would
increase the interested stockholder's proportionate share ownership of the
stock of any class or series of the corporation or such subsidiary; and any
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation or any such subsidiary. In general, and subject to
certain exceptions, an "interested stockholder" is any person who is the
owner of 15% or more of the outstanding voting stock (or, in the case of a
corporation with classes of voting stock with disparate voting power, 15%
or more of the voting power of the outstanding voting stock) of the
corporation, and the affiliates and associates of such person. The term
"owner" is broadly defined to include any person that individually or with
or through his or its affiliates or associates, among other things,
beneficially owns such stock, or has the right to acquire such stock
(whether such right is
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exercisable immediately or only after the passage of time) pursuant to any
agreement or understanding or upon the exercise of warrants or options or
otherwise or has the right to vote such stock pursuant to any agreement or
understanding, or has an agreement or understanding with the beneficial
owner of such stock for the purpose of acquiring, holding, voting or
disposing of such stock. The restrictions of DGCL Section 203 do not apply
to corporations that have elected, in the manner provided therein, not to
be subject to such section or, with certain exceptions, which do not have a
class of voting stock that is listed on a national securities exchange or
authorized for quotation on an interdealer quotation system of a registered
national securities association or held of record by more than 2,000
stockholders. The TCI Charter does not contain any provision "opting out"
of the application of DGCL Section 203 and TCI has not taken any of the
actions necessary for it to "opt out" of such provision. As a result, the
provisions of Section 203 will remain applicable to transactions between
TCI and any of its "interested stockholders."
The TCI Charter also contains certain provisions which could make a
change in control of TCI more difficult. For example, the TCI Charter
requires, subject to the rights, if any, of any class or series of TCI
Preferred Stock, the affirmative vote of 66 2/3% of the total voting power
of the outstanding shares of Voting Securities, voting together as a single
class, to approve (i) a merger or consolidation of TCI with, or into,
another corporation, other than a merger or consolidation which does not
require the consent of stockholders under the DGCL or a merger or
consolidation which has been approved by 75% of the members of the TCI
Board of Directors (in which case, in accordance with the DGCL, the
affirmative vote of a majority of the total voting power of the outstanding
Voting Securities would, with certain exceptions, be required for
approval), (ii) the sale, lease or exchange of all or substantially all of
the property and assets of TCI or (iii) the dissolution of TCI. "Voting
Securities" is currently defined as the TCI Group Common Stock, the Liberty
Media Group Common Stock and any class or series of TCI preferred stock
entitled to vote generally with the holders of TCI Common Stock on matters
submitted to stockholders for a vote. The TCI Charter also provides for a
TCI Board of Directors of not less than three members, divided into three
classes of approximately equal size, with each class to be elected for a
three-year term at each annual meeting of stockholders. The exact number of
directors, currently nine, is fixed by the TCI Board of Directors. The
holders of TCI Group Common Stock, Liberty Media Group Common Stock, TCI's
Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock, par
value $.01 per share, and TCI's Convertible Preferred Stock, Series C,
voting together as a single class, vote in elections for directors. (TCI's
Convertible Redeemable Participating Preferred Stock, Series F has voting
rights, but outstanding shares are not entitled to vote because they are
held by subsidiaries of TCI.) Stockholders of TCI do not have cumulative
voting rights.
The TCI Charter authorizes the issuance of 50,000,000 shares of Series
Preferred Stock, par value $.01 per share ("Series Preferred Stock"), of
which 48,020,000 shares remain available for designation. Under the TCI
Charter, the TCI Board of Directors is authorized, without further action
by the stockholders of TCI, to establish the preferences, limitations and
relative rights of the Series Preferred Stock. In addition, 1,900,000,000
shares of the TCI Group Common Stock and 825,000,000 shares of Liberty
Media Group Common Stock are currently authorized by the TCI Charter, of
which 1,243,621,801 and 660,906,868, respectively, remain available for
issuance. The issue and sale of shares of TCI Group Common Stock, Liberty
Media Group Common Stock and/or Series Preferred Stock could occur in
connection with an attempt to acquire control of TCI, and the terms of such
shares of Series Preferred Stock could be designed in part to impede the
acquisition of such control.
The TCI Charter requires the affirmative vote of 66 2/3% of the total
voting power of the outstanding shares of Voting Securities, voting
together as a single class, to approve any amendment,
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alteration or repeal of any provision of the TCI Charter or the addition or
insertion of other provisions therein.
The TCI Charter and TCI's Bylaws provide that a special meeting of
stockholders will be held at any time, subject to the rights of the holders
of any class or series of TCI Preferred Stock, upon the call of the
Secretary of TCI upon (i) the written request of the holders of not less
than 66 2/3% of the total voting power of the outstanding shares of Voting
Securities or (ii) at the request of not less than 75% of the members of
the TCI Board of Directors. Subject to the rights of any class or series
of TCI Preferred Stock, TCI's Bylaws require that written notice of the
intent to make a nomination at a meeting of stockholders must be received
by the Secretary of TCI, at TCI's principal executive offices, not later
than (a) with respect to an election of directors to be held at an annual
meeting of stockholders, 90 days in advance of such meeting, and (b) with
respect to an election of directors to be held at a special meeting of
stockholders, the close of business on the seventh day following the day on
which notice of such meeting is first given to stockholders. The notice
must contain: (1) the name and address of the stockholder who intends to
make the nomination and of the person or persons to be nominated; (2) a
representation that the stockholder is a holder of record of TCI's Voting
Securities entitled to vote at the meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in
the notice; (3) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are
to be made by the stockholder; (4) such other information regarding each
nominee proposed by such stockholder as would have been required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had each proposed nominee been
nominated, or intended to be nominated, by the TCI Board of Directors; and
(5) the consent of each nominee to serve as a director of TCI if so
elected. Any actions to remove directors is required to be for "cause" (as
defined in the TCI Charter) and be approved by the holders of 66 2/3% of
the total voting power of the outstanding shares entitled to vote in the
election of directors.
LEGAL MATTERS
Certain legal matters with respect to the Shares will be passed upon for
the Company by Stephen M. Brett, Esq., Executive Vice President and General
Counsel of the Company.
EXPERTS
The consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended December 31, 1994, and all related
schedules which appear in Tele-Communications, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1994, as amended, have been
incorporated by reference herein in reliance upon the reports, dated March
27, 1995, of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing. The reports of KPMG Peat
Marwick LLP covering the December 31, 1994 consolidated financial
statements refer to the adoption of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," in 1994.
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The consolidated balance sheets of TeleWest Communications plc and
subsidiaries as of 31 December 1994 and 1993, and the related consolidated
statements of operations and cash flows for each of the years in the three
year period ended 31 December 1994, which appear in the 31 December 1994
Annual Report on Form 10-K of Tele-Communications, Inc., as amended, have
been incorporated by reference herein in reliance upon the report of KPMG,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The combined balance sheets of Cablevision (a combination of certain
cable television assets of Cablevision S.A., Televisora Belgrano S.A.,
Construed S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and
the related combined statements of operations and deficit and cash flows
for each of the years in the three-year period ended December 31, 1994,
which appear in the Current Report on Form 8-K of Tele-Communications,
Inc., dated April 20, 1995, as amended, have been incorporated by reference
herein in reliance upon the report of KPMG Finsterbusch Pickenhayn Sibille,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The consolidated balance sheets of QVC, Inc. and subsidiaries as of
January 31, 1994 and 1993, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the years in
the three-year period ended January 31, 1994, which appear in the Current
Report on Form 8-K of Tele-Communications, Inc. dated February 3, 1995, as
amended, have been incorporated by reference herein in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing. The report of KPMG Peat Marwick LLP
covering the January 31, 1994 consolidated financial statements refers to a
change in the method of accounting for income taxes.
The financial statements of TeleCable Corporation as of December 31, 1993
and 1992 and for each of the two years in the period ended December 31,
1993, incorporated in this Prospectus by reference to the Company's Current
Report on Form 8-K dated August 26, 1994, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
33
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH
DATE. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE
SPECIFICALLY OFFERED HEREBY OR OF ANY SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION.......... 3
INCORPORATION OF DOCUMENTS BY
REFERENCE................... 3
THE COMPANY.................... 4
SHARES BEING OFFERED........... 4
SELLING STOCKHOLDERS........... 5
PLAN OF DISTRIBUTION........... 8
DESCRIPTION OF COMMON STOCK.... 8
LEGAL MATTERS.................. 32
EXPERTS........................ 32
</TABLE>
TELE-COMMUNICATIONS, INC.
Tele-Communications, Inc. Series A
TCI Group
Common Stock ($1.00 par value)
Tele-Communications, Inc. Series A
Liberty Media Group
Common Stock ($1.00 par value)
-----------------------------------------
PROSPECTUS
-----------------------------------------
, 1995
-------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses in connection with the distribution of the Shares
are set forth below and will be borne by the Registrant.
<TABLE>
<S> <C>
Registration Fee.............................................. $11,320.56
*Blue Sky Fees and Expenses (including counsel fees).......... 1,000.00
*Legal Fees and Expenses...................................... 2,000.00
*Accounting Fees and Expenses................................. 2,000.00
*Miscellaneous................................................ 1,000.00
----------
*Total................................................... $17,320.56
</TABLE>
--------------------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides,
generally, that a corporation shall have the power to indemnify any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (except actions
by or in the right of the corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation
against all expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such
action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was
unlawful. A corporation may similarly indemnify such person for expenses
actually and reasonably incurred by such person in connection with the
defense or settlement of any action or suit by or in the right of the
corporation, provided such person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of
the corporation, and, in the case of claims, issues and matters as to which
such person shall have been adjudged liable to the corporation, provided
that a court shall have determined, upon application, that, despite the
adjudication of liability but in view of all of the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the
corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that such provision may not
eliminate or limit the liability of a
II-1
<PAGE>
director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) under section 174 of Title 8 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an
improper personal benefit. No such provision may eliminate or limit the
liability of a director for any act or omission occurring prior to the date
when such provision became effective.
Article V, Section E of the Company's Restated Certificate of
Incorporation provides as follows:
"1. Limitation On Liability.
-----------------------
To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, a
director of the Corporation shall not be liable to the
Corporation or any of its stockholders for monetary damages for
breach of fiduciary duty as a director. Any repeal or
modification of this paragraph 1 shall be prospective only and
shall not adversely affect any limitation, right or protection of
a director of the Corporation existing at the time of such repeal
or modification.
2. Indemnification.
---------------
(a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable
law as it presently exists or may hereafter be amended, any
person who was or is made or is threatened to be made a party or
is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise
or nonprofit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and
expenses (including attorneys' fees) reasonably incurred by such
person. Such right of indemnification shall inure whether or not
the claim asserted is based on matters which antedate the
adoption of this Section E. The Corporation shall be required to
indemnify a person in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.
(b) PREPAYMENT OF EXPENSES. The Corporation shall pay the
expenses (including attorneys' fees) incurred in defending any
proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a director or
officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the director
or officer to repay all
II-2
<PAGE>
amounts advanced if it should be ultimately determined that the
director or officer is not entitled to be indemnified under this
paragraph or otherwise.
(c) CLAIMS. If a claim for indemnification or payment of
expenses under this paragraph is not paid in full within 60 days
after a written claim therefor has been received by the
Corporation, the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden
of proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law.
(d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this paragraph shall not be exclusive of any other
rights which such person may have or hereafter acquire under any
statute, provision of this Certificate, the Bylaws, agreement,
vote of stockholders or disinterested directors or otherwise.
(e) OTHER INDEMNIFICATION. The Corporation's obligation, if any,
to indemnify any person who was or is serving at its request as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity
shall be reduced by any amount such person may collect as
indemnification from such other corporation, partnership, joint
venture, trust, enterprise or nonprofit entity.
3. Amendment or Repeal.
-------------------
Any repeal or modification of the foregoing provisions of this
Section E shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification."
Article II, Section 2.9 of the Company's Bylaws also contains an
indemnity provision, requiring the Company to indemnify members of the
Board of Directors and officers of the Company and their respective heirs,
personal representatives and successors in interest for or on account of
any action performed on behalf of the Company, to the fullest extent
provided by the laws of the State of Delaware and the Company's Restated
Certificate of Incorporation, as then or thereafter in effect.
The Company has also entered into indemnification agreements with each
of its directors (each director, an "indemnitee"). The indemnification
agreements provide (i) for the prompt indemnification to the fullest extent
permitted by law against any and all expenses, including attorneys' fees
and all other costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness or participating
in (including on appeal), or in preparing for ("Expenses"), any threatened,
pending or completed action, suit or proceeding, or any inquiry or
investigation ("Claim"), related to the fact that such indemnitee is or was
a director, officer, employee, agent or fiduciary of the Company or is or
was serving at the Company's request as
II-3
<PAGE>
a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or
other enterprise, or by reason of anything done or not done by a director
or officer in any such capacity, and against any and all judgments, fines,
penalties and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection therewith) of
any Claim, unless the Reviewing Party (one or more members of the Board of
Directors or other person appointed by the Board of Directors, who is not a
party to the particular claim, or independent legal counsel) determines
that such indemnification is not permitted under applicable law and (ii)
for the prompt advancement of Expenses, and for reimbursement to the
Company if the Reviewing Party determines that such indemnitee is not
entitled to such indemnification under applicable law. In addition, the
indemnification agreements provide (i) a mechanism through which an
indemnitee may seek court relief in the event the Reviewing Party
determines that the indemnitee would not be permitted to be indemnified
under applicable law (and therefore is not entitled to indemnification or
expense advancement under the indemnification agreement) and (ii)
indemnification against all expenses (including attorneys' fees), and
advancement thereof if requested, incurred by the indemnitee in seeking to
collect an indemnity claim or advancement of expenses from the Company or
incurred in seeking to recover under a directors' and officers' liability
insurance policy, regardless of whether successful or not. Furthermore,
the indemnification agreements provide that after there has been a "change
in control" in the Company (as defined in the indemnification agreements),
other than a change in control approved by a majority of directors who were
directors prior to such change, then, with respect to all determinations
regarding a right to indemnity and the right to advancement of Expenses,
the Company will seek legal advice only from independent legal counsel
selected by the indemnitee and approved by the Company.
The indemnification agreements impose upon the Company the burden of
proving that an indemnitee is not entitled to indemnification in any
particular case and negate certain presumptions that may otherwise be drawn
against an indemnitee seeking indemnification in connection with the
termination of actions in certain circumstances. Indemnitees' rights under
the indemnification agreements are not exclusive of any other rights they
may have under Delaware law, the Company's Bylaws or otherwise. Although
not requiring the maintenance of directors' and officers' liability
insurance, the indemnification agreements require that an indemnitee be
provided with the maximum coverage available for any director or officer of
the Company if there is such a policy.
The Company may purchase liability insurance policies covering its
directors and officers.
In addition, the Selling Stockholders, severally and not jointly, have
agreed to indemnify the Company, its directors and officers and each
person, if any, who controls the Company within the meaning of either the
Securities Act or the Securities Exchange Act of 1934, as amended, against
certain liabilities, including civil liabilities under the Securities Act
in connection with certain actions arising out of the sale of the Shares
registered hereby.
II-4
<PAGE>
ITEM 16. EXHIBITS
Exhibits Description
-------- -----------
4.1 Restated Certificate of Incorporation of the Company, dated
August 4, 1994, as amended on August 4, 1994, August 16, 1994,
October 11, 1994, October 21, 1994, January 26, 1995, August 3,
1995 and August 3, 1995 (Incorporated herein by reference to
Exhibit 99.1 of Company's Current Report on Form 8-K, dated
August 10, 1995 (Commission File No. 0-20421)).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated
herein by reference to Exhibit 3.2 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1994, as amended by
Form 10-K/A (Amendment No. 1) (Commission File No. 0-20421)).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc.
Series A TCI Group Common Stock, par value $1.00 per Share, of
the Company (Incorporated herein by reference to Exhibit 4.3 of
Company's registration statement on Form 8-A, as amended by Form
8-A/A (Amendments No. 1 and 2) Commission File No. 0-20421).
4.4 Specimen Stock Certificate for the Tele-Communications, Inc.
Series A Liberty Media Group Common Stock, par value $1.00 per
Share, of the Company (Incorporated herein by reference to
Exhibit 4.5 of Company's registration statement on Form 8-A, as
amended by Form 8-A/A (Amendments No. 1 and 2) Commission File
No. 0-20421).
5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG.
23.3 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Price Waterhouse LLP.
23.6 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
24 Powers of Attorney (included on page II-9).
99.1 Letter agreement, dated January 10, 1995, between the Company and
the Selling Stockholders (Incorporated herein by reference to
Exhibit 99.1 of Company's Registration Statement on Form S-3
(Registration No. 33-57399) filed January 23, 1995).
II-5
<PAGE>
99.2 Stock Purchase Agreement, dated as of July 9, 1986, among Tele-
Communications, Inc. and certain shareholders of United Artists
Communications, Inc. (Incorporated herein by reference to
Exhibit 99.2 of Company's Registration Statement on Form S-3
(Registration No. 33-57399) filed January 23, 1995).
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
-------- -------
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
under Item 15 above, or otherwise, the Registrant has been advised that in
the opinion
II-6
<PAGE>
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Greenwood Village,
State of Colorado, on December 29, 1995.
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
-------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
II-8
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen M. Brett, Esq., and
Elizabeth M. Markowski, Esq., and each of them, his true and lawful
attorneys-in-fact and agents with full power of substitution and re-
substitution for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents and each of them full power and authority, to do and perform
each and every act and thing requisite or necessary to be done in and about
the premises, to all intents and purposes and as fully as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitutes may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons (which persons constitute a majority of the Board of Directors) in
the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Bob Magness Chairman of the Board December 29, 1995
------------------------- and Director
(Bob Magness)
/s/ John C. Malone President and Director December 29, 1995
------------------------- (Principal Executive
(John C. Malone) Officer)
/s/ Donne F. Fisher Executive Vice President December 29, 1995
------------------------- and Director (Principal
(Donne F. Fisher) Financial and Accounting
Officer)
Director
-------------------------
(John W. Gallivan)
/s/ Kim Magness Director December 29, 1995
-------------------------
(Kim Magness)
Director
-------------------------
(Robert A. Naify)
/s/ Jerome H. Kern Director December 29, 1995
-------------------------
(Jerome H. Kern)
Director
-------------------------
(Tony Coelho)
II-9
<PAGE>
EXHIBIT INDEX
4.1 Restated Certificate of Incorporation of the Company, dated
August 4, 1994, as amended on August 4, 1994, August 16, 1994,
October 11, 1994, October 21, 1994, January 26, 1995, August 3,
1995 and August 3, 1995 (Incorporated herein by reference to
Exhibit 99.1 of Company's Current Report on Form 8-K, dated
August 10, 1995 (Commission File No. 0-20421)).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated
herein by reference to Exhibit 3.2 of the Company's Annual Report
on Form 10-K for the year ended December 31, 1994, as amended by
Form 10-K/A (Amendment No. 1) (Commission File No. 0-20421)).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc.
Series A TCI Group Common Stock, par value $1.00 per Share, of
the Company (Incorporated herein by reference to Exhibit 4.3 of
Company's registration statement on Form 8-A, as amended by Form
8-A/A (Amendments No. 1 and 2) Commission File No. 0-20421).
4.4 Specimen Stock Certificate for the Tele-Communications, Inc.
Series A Liberty Media Group Common Stock, par value $1.00 per
Share, of the Company (Incorporated herein by reference to
Exhibit 4.5 of Company's registration statement on Form 8-A, as
amended by Form 8-A/A (Amendments No. 1 and 2) Commission File
No. 0-20421).
5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG.
23.3 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Price Waterhouse LLP.
23.6 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
24 Powers of Attorney (included on page II-9).
99.1 Letter agreement, dated January 10, 1995, between the Company and
the Selling Stockholders (Incorporated herein by reference to
Exhibit 99.1 of Company's Registration Statement on Form S-3
(Registration No. 33-57399) filed January 23, 1995).
99.2 Stock Purchase Agreement, dated as of July 9, 1986, among Tele-
Communications, Inc. and certain shareholders of United Artists
Communications, Inc. (Incorporated herein by reference to
Exhibit 99.2 of Company's Registration Statement on Form S-3
(Registration No. 33-57399) filed January 23, 1995).
II-10
<PAGE>
EXHIBIT 5
TELE-COMMUNICATIONS, INC.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
December 29, 1995
Board of Directors
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, CO 80111-3000
Dear Sirs:
I am Executive Vice President and General Counsel of Tele-
Communications, Inc., a Delaware corporation (the "Company"), and this
opinion is being delivered in connection with the filing of the Company's
Registration Statement on Form S-3 (the "Registration Statement"), with
respect to the registration under the Securities Act of 1933, as amended,
of shares of the Company's Tele-Communications, Inc. Series A Liberty Media
Group Common Stock, par value $1.00 per share (the "Shares"), each issuable
upon the conversion of certain convertible notes (the "Notes") and each to
be offered and sold from time to time by the holders thereof named in the
Registration Statement (the "Selling Stockholders").
In connection therewith, I have examined, among other things, the
originals, certified copies or copies otherwise identified to my
satisfaction as being copies of originals, of the Restated Certificate of
Incorporation and By-Laws of the Company, as amended; minutes of the
proceedings of the Company's Board of Directors, including committees
thereof; the Company's Proxy Statement/Prospectus, dated June 29, 1995,
relating to the annual meeting of the Company's stockholders held on August
3, 1995; and such other documents, records, certificates of public
officials and questions of law as I deemed necessary or appropriate for the
purpose of this opinion. In rendering this opinion, I have relied, to the
extent I deemed such reliance appropriate, on certificates of officers of
the Company as to factual matters. I have assumed the authenticity of all
documents submitted to me as originals and the conformity to authentic
original documents of all documents submitted to me as certified, conformed
or reproduction copies. I have further assumed that there will be no
changes in applicable law between the date of this opinion and the date the
Shares proposed to be sold by the Selling Stockholders pursuant to the
Registration Statement are actually sold.
Based upon the foregoing, I am of the opinion that each of the Shares
to be issued upon conversion of the Notes have been duly authorized and,
when issued and delivered upon conversion of the Notes will be validly
issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to me contained therein under
the heading "Legal Matters." In giving the foregoing consent, I do not
admit that I am in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ Stephen M. Brett
Stephen M. Brett
Executive Vice President and
General Counsel
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in this registration statement
on Form S-3 of Tele-Communications, Inc. of our reports dated March 27,
1995, relating to the consolidated balance sheets of Tele-Communications,
Inc. and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 1994, and
all related financial statement schedules, which reports appear in the
December 31, 1994 Annual Report on Form 10-K, as amended, of Tele-
Communications, Inc. and to the reference to our firm under the heading
"Experts" in the registration statement. Our reports covering the December
31, 1994 consolidated financial statements refer to the adoption of
Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," in 1994.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
December 21, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Shareholders
TeleWest Communications plc:
We consent to incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report dated 21 March 1995,
relating to the consolidated balance sheet of TeleWest Communications plc
and subsidiaries as of 31 December 1994 and 1993, and the related
consolidated statements of operations and cash flows for each of the years
in the three-year period ended 31 December 1994, which report appears in
the 31 December 1994 annual report on Form 10-K of Tele-Communications,
Inc., as amended, and to the reference to our firm under the heading
"Experts" in the registration statement.
/s/ KPMG
KPMG
London, England
December 21, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Shareholders
of Cablevision:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Tele-Communications, Inc. of our report, dated March 24,
1995, relating to the combined balance sheets of Cablevision (A combination
of certain cable television assets of Cablevision S.A., Televisora Belgrano
S.A., Construed S.A. and Univent's S.A.) as of December 31, 1994 and 1993,
and the related combined statements of operations and deficit and cash
flows for each of the years in the three-year period ended December 31,
1994, which appear in the Current Report on Form 8-K of Tele-
Communications, Inc., dated April 20, 1995, as amended, and to the
reference to our firm under the heading "Experts" in the registration
statement.
KPMG FINSTERBUSCH PICKENHAYN SIBILLE
/s/ Juan Carlos Pickenhayn
Juan Carlos Pickenhayn
Partner
Buenos Aires, Argentina
December 21, 1995
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EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
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The Board of Directors and Stockholders
QVC Inc.:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Tele-Communications, Inc. of our report, dated March 4,
1994, relating to the consolidated balance sheets of QVC, Inc. and
subsidiaries as of January 31, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended January 31, 1994, which report
appears in the Current Report on Form 8-K of Tele-Communications, Inc.
dated February 3, 1995, as amended and to the reference to our firm under
the heading "Experts" in the registration statement. Our report refers to
a change in the method of accounting for income taxes.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
December 21, 1995
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EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3, of Tele-Communications, Inc. of our report dated
February 4, 1994, relating to the consolidated financial statements of
TeleCable Corporation which appears on page 12 of the TCI Communications,
Inc. and Tele-Communications, Inc. Current Report on Form 8-K dated August
26, 1994. We also consent to the reference to us under the heading
"Experts" in the registration statement.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Norfolk, Virginia
December 21, 1995
