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Filed pursuant to Rule 424(b)(3)
Registration No. 33-57469
PROSPECTUS 3,403,405 SHARES
Tele-Communications, Inc.
Class A Common Stock
($1.00 Par Value)
This Prospectus relates to 3,403,405 shares (the "Shares") of the
Class A Common Stock, par value $1.00 per share (the "Class A Common Stock"),
of Tele-Communications, Inc., a Delaware corporation (the "Company"), to be
offered and sold from time to time by Acclaim Entertainment, Inc., a Delaware
corporation ("Acclaim" or the "Selling Stockholder"). All of the Shares were
originally issued by the Company to the Selling Stockholder in a
privately-negotiated transaction. See "Selling Stockholder."
Shares of the Class A Common Stock and the Company's Class B Common
Stock, par value $1.00 per share (the "Class B Common Stock"), are traded on
the Nasdaq National Market under the symbols "TCOMA" and "TCOMB," respectively.
The Class A Common Stock and the Class B Common Stock are identical in all
respects, except that (i) each share of Class B Common Stock has ten votes per
share and each share of Class A Common Stock has one vote per share and (ii)
each share of Class B Common Stock is convertible, at the option of the holder,
into one share of Class A Common Stock. The Class A Common Stock is not
convertible into Class B Common Stock. See "Description of Capital Stock."
The Shares may be offered for sale and sold by the Selling Stockholder
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 Stockholder 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 of Shares to
be sold, 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 Stockholder 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
Stockholder 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 Stockholder. See "Selling Stockholder". The Selling
Stockholder 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 Stockholder.
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 Selling Stockholder and any broker-dealers or agents that
participate with the Selling Stockholder 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
commissions or discounts under the Securities Act.
The date of this Prospectus is February 2, 1995.
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The Company was incorporated in 1994 under the name "TCI/Liberty
Holding Company" for the purpose of combining the Company's predecessor,
Tele-Communications, Inc. (renamed "TCI Communications, Inc." and referred to
herein as "TCIC"), and Liberty Media Corporation ("Liberty"). On August 4,
1994, the mergers of TCIC and Liberty with separate wholly-owned subsidiaries
of the Company were consummated and each of TCIC and Liberty became
wholly-owned subsidiaries of the Company. In connection with such mergers, the
Company changed its name to Tele-Communications, Inc. and TCIC changed its name
to TCI Communications, Inc. Unless the context indicates otherwise, as used in
this Prospectus the term "Company" means, on and after August 4, 1994,
Tele-Communications, Inc. (formerly named "TCI/Liberty Holding Company") and,
before August 4, 1994, TCIC (formerly named "Tele-Communications, Inc."), and
their respective consolidated subsidiaries.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., 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
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
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.
CERTAIN CONSIDERATIONS
The Company incurred a net loss in each of the three fiscal years in
the period ended December 31, 1993, and losses from continuing operations in
the fiscal years ended December 31, 1993 and December 31, 1991. The Company had
net earnings for the nine-month periods ended September 30, 1994 and 1993.
Notwithstanding the losses it has incurred, the Company has been able to, and
expects to continue to be able to, satisfy its debt service and other
obligations as and when they become due. The Company's Operating Cash Flow
(operating income before depreciation, amortization and other non-cash credits
or charges) ($1,858 million, $1,637 million and $1,430 million for the years
ended December 31, 1993, 1992 and 1991, respectively, and $1,339 million and
$1,409 million for the nine-month periods ended September 30, 1994 and 1993,
respectively) has historically been sufficient to cover its interest expense
($731 million, $718 million and $826 million for the years ended December 31,
1993, 1992 and 1991, respectively, and $568 million and $549 million for the
nine-month periods ended September 30, 1994 and 1993, respectively). The
Company's interest coverage ratio for the years ended December 31, 1993, 1992,
and 1991 was 254%, 228%, and 173%, respectively, and for the nine months ended
September 30, 1994 and 1993 was 236% and 257%, respectively. Operating Cash
Flow is a measure of value and borrowing capacity within the cable television
industry and is not intended to be a substitute for cash flows provided by
operating activities, a measure of performance prepared in accordance with
generally accepted accounting principles, and should not be relied upon as
such.
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THE COMPANY
The Company is a Delaware corporation with executive offices at Terrace
Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000; telephone (303)
267-5500.
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
has investments in cable and telecommunications operations and television
programming in certain international markets as well as investments in
companies and joint ventures involved in developing and providing programming
for new television and telecommunications technologies.
SELLING STOCKHOLDER
All of the Shares being offered hereby were acquired by the Selling
Stockholder in accordance with the terms of an Exchange Agreement, dated as of
October 19, 1994 (the "Exchange Agreement"), among the Company, TCI GameCo
Holdings, Inc., a Colorado corporation and an indirect wholly owned subsidiary
of the Company, and Acclaim. A copy of the Exchange Agreement is filed as an
exhibit to the Registration Statement.
The Shares received by the Selling Stockholder constitute restricted
securities and cannot be offered or sold except pursuant to an effective
registration statement covering such offer and sale or pursuant to an
applicable exception from the registration requirements of the Securities Act.
Pursuant to the Exchange Agreement, the Company has filed the Registration
Statement (of which this Prospectus forms a part) under the Securities Act for
the purpose of permitting the Selling Stockholder to offer and sell the Shares,
in whole or in part and from time to time, under this Prospectus. The Company
is obligated to keep the Registration Statement effective for a period of up to
two years (or until all of the Shares are disposed of by the Selling
Stockholder, if earlier).
The Shares may be offered and sold in an underwritten offering (see
"Plan of Distribution"), in which case the Selling Stockholder shall have the
right to select the lead managing underwriter, whose selection shall be subject
to approval by the Company (which approval shall not be unreasonably withheld).
The Company is required to pay all expenses in connection with the registration
of the offer and sale of the Shares (including, without limitation, all
registration and filing fees incurred in connection the filing of this
Registration Statement with the Commission and state securities commissioners),
other than (i) discounts and commissions and transfer taxes attributable to the
sale of any of the Shares; (ii) in the case of any underwritten offering, fees
and disbursements of underwriters and underwriters counsel (other than fees and
expenses of such counsel incurred in connection the "blue sky" qualification of
any of the Shares); and (iii) fees and disbursements of counsel or of any
experts retained by Acclaim in connection with the registration of the offer
and sale of the Shares.
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The Company has agreed to indemnify Acclaim against certain
liabilities that may arise in connection with any offer and sale of the Shares,
including liabilities under the Securities Act, and to contribute to payments
that Acclaim may be required to make in respect thereof.
Neither the Company nor any of its affiliates has had within the past
three years any material relationship with Acclaim or any of its affiliates.
Pursuant to the Exchange Agreement, the Company acquired 4,348,795 shares of
Acclaim's common stock, par value $.02 per share ("Acclaim Common Stock"),
which, as of the date of this Prospectus, represented 9.79% of the issued and
outstanding shares of Acclaim Common Stock. The Company also has entered into a
joint venture with Acclaim to develop, acquire (by purchase or license), and
merchandize, and to sell, license, distribute and transmit, interactive
entertainment programming for distribution by electronic means principally to
or through telecommunications networks, including cable television systems.
The joint venture will seek to promote a standard for broadband network
interactive games to be incorporated into the next generation of set-top boxes.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 1,100,000,000 shares of Class A
Common Stock and 150,000,000 shares of Class B Common Stock. In addition, it is
authorized to issue up to 12,375,096 shares of Preferred Stock, par value $.01
per share ("Preferred Stock"), divided into 700,000 shares of Class A Preferred
Stock, par value $.01 per share ("Class A Preferred Stock"), 1,675,096 shares
of Class B 6% Cumulative Redeemable Exchangeable Junior Preferred Stock, par
value $.01 per share ("Class B Preferred Stock"), and 10,000,000 shares of
Series Preferred Stock, par value $.01 per share (the "Series Preferred
Stock"). The following summary of certain provisions of the Company's Restated
Certificate of Incorporation and Bylaws does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all provisions of
such Restated Certificate of Incorporation and Bylaws, copies of which are
filed as exhibits to this Registration Statement.
COMMON STOCK
Each share of Class A Common Stock has one vote and each share of
Class B Common Stock has 10 votes per share. The Class A and Class B Common
Stock are otherwise identical in all respects, except that each share of Class
B Common Stock is convertible into one share of Class A Common Stock at the
option of the holder. A number of shares of Class A Common Stock equal to the
number of shares of Class B Common Stock outstanding from time to time are set
aside and reserved for issuance upon conversion of shares of Class B Common
Stock. The Class A Common Stock is not convertible into Class B Common Stock.
Subject to the preferential rights of holders of any then outstanding Preferred
Stock, the holders of the Class A and Class B Common Stock are entitled to
receive dividends when and as declared by the Board of Directors out of funds
legally available for such payment. Holders of Class A and Class B Common Stock
have no preemptive rights to purchase additional shares. Subject to the
preferential rights of holders of any then outstanding Preferred Stock, the
holders of Class A and Class B Common Stock are entitled to share ratably in
the assets of the Company available for distribution to stockholders in the
event of the Company's liquidation, dissolution or winding up.
The holders of the Class A and Class B Common Stock vote as one class
for the election of directors and have no cumulative voting rights in the
election of directors. The Company's Restated Certificate of Incorporation
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also provides that the Board of Directors be divided into three classes of
approximately equal size, with one class to be elected for a three-year term at
each annual meeting of stockholders.
The Restated Certificate of Incorporation may be amended or repealed
only upon a vote of the holders of 66 2/3% of the total voting power of the
outstanding Class A and Class B Common Stock and any then outstanding Preferred
Stock entitled to vote with the Class A and Class B Common Stock generally on
matters submitted to common stockholders for a vote (collectively "Voting
Stock"), voting as one class, and the Company's Bylaws may be amended only upon
the affirmative vote of at least 75% of the members of the Board of Directors,
or by a vote of holders of 66 2/3% of the total voting power of the outstanding
Voting Stock, voting as a single class. In addition, the Restated Certificate
of Incorporation provides that, subject to the rights of the holders of any
class or series of Preferred Stock, a vote of the holders of 66 2/3% of the
total voting power of the outstanding Voting Stock, voting as a single class,
is required to remove directors (who may be removed only for cause) and to
approve dissolution and certain mergers, consolidations, sales of assets and
similar transactions. As of the date of this Prospectus, the Class A and Class
B Common Stock and the Class C Preferred Stock (as defined below) constitute
the only "Voting Stock" of the Company.
CLASS PREFERRED STOCK
Class A Preferred Stock. The Company is authorized to issue 700,000
shares of Class A Preferred Stock, of which 592,798 were issued and outstanding
as of the date of this Prospectus and all of which were held by a wholly owned
subsidiary of the Company. The dividend, liquidation and redemption features of
the Class A Preferred Stock, each of which is discussed below, are determined
by reference to the liquidation value of the Class A Preferred Stock, which as
of any date of determination will be equal, on a per share basis, to the sum of
(i) $322.84, plus (ii) all dividends accrued on such share through the dividend
payment date on or immediately preceding such date of determination to the
extent not paid on or before such date, plus (iii), for purposes of determining
liquidation and redemption payments, all unpaid dividends accrued on the sum of
clauses (i) and (ii) above, to such date of determination.
The holders of Class A Preferred Stock are entitled to receive
preferential cumulative cash dividends when and as declared by the Board of
Directors out of unrestricted funds legally available therefor. Dividends
accrue cumulatively at an annual rate of 9 3/8% of the liquidation value per
share, whether or not such dividends are declared or funds are legally or
contractually available for payment of dividends. Dividends not paid on any
dividend payment date are added to the liquidation value on such date and
remain a part thereof until such dividends and all dividends accrued thereon
are paid in full.
Upon the dissolution, liquidation or winding up of the Company,
holders of Class A Preferred Stock will be entitled to receive from the assets
of the Company available for distribution to stockholders an amount in cash or
property or a combination thereof, per share, equal to the liquidation value,
and no more, in preference to any liquidating distribution to the holders of
Class A and Class B Common Stock.
The Class A Preferred Stock is subject to optional redemption at any
time by the Company, in whole or in part, and to mandatory redemption by the
Company on the twelfth anniversary of the issue date, in each case at a
redemption price per share equal to the liquidation value of the Class A
Preferred Stock.
Class B Preferred Stock. The Company is authorized to issue 1,675,096
shares of Class B Preferred Stock, all of which were issued and outstanding as
of the date of this Prospectus. The holders of Class B Preferred Stock are
entitled to receive preferential cumulative dividends, when and as declared by
the Board of Directors out of unrestricted funds legally available therefor.
Dividends accrue cumulatively (but without compounding) at an annual rate of 6%
of the stated liquidation value of $100 per share (the "Stated Liquidation
Value"), whether or not such dividends are declared or funds are legally
available for the payment of dividends. Accrued dividends are payable annually
and, in the sole discretion of the Board of Directors, may be declared and paid
in cash, in shares of Class
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A Common Stock or in any combination of the foregoing. Accrued dividends not
paid as provided above on any dividend payment date will accumulate and such
accumulated unpaid dividends may be declared and paid in cash, shares of Class
A Common Stock or any combination thereof at any time without reference to any
regular dividend payment date, to holders of record of Class B Preferred Stock
as of a special record date fixed by the Board of Directors.
Upon the liquidation, dissolution or winding up of the Company, the
holders of Class B Preferred Stock will be entitled to receive from the assets
of the Company available for distribution to stockholders an amount in cash or
property or a combination thereof, per share, equal to the Stated Liquidation
Value thereof, plus all accumulated and accrued but unpaid dividends thereon to
the date of payment, and no more, in preference to any liquidating distribution
to the holders of Class A and Class B Common Stock.
The Class B Preferred Stock is redeemable at any time at the option of
the Company, in whole or in part, for a redemption price per share payable in
cash equal to the Stated Liquidation Value thereof, plus all accumulated and
accrued but unpaid dividends thereon to and including the redemption date.
The Class B Preferred Stock is exchangeable at the option of the
Company in whole but not in part at any time for junior subordinated debt
securities of the Company ("Junior Exchange Notes"). If the Company exercises
its optional exchange right, each holder of outstanding shares of Class B
Preferred Stock will be entitled to receive in exchange therefor newly issued
Junior Exchange Notes of a series authorized and established for the purpose of
such exchange, the aggregate principal amount of which will be equal to the
aggregate Stated Liquidation Value of the shares of Class B Preferred Stock so
exchanged by such holder, plus all accumulated and accrued but unpaid dividends
thereon to and including the exchange date. The Junior Exchange Notes will
mature on the fifteenth anniversary of the date of issuance and will be subject
to earlier redemption at the option of the Company, in whole or in part, for a
redemption price equal to the principal amount thereof plus accrued but unpaid
interest. Interest will accrue, and be payable annually, on the principal
amount of the Junior Exchange Notes at a rate per annum to be determined prior
to issuance by adding a spread of 215 basis points to the "Fifteen Year
Treasury Rate" (as defined in the Indenture pursuant to which the Junior
Exchange Notes will be issued). Interest will accrue on overdue principal at
the same rate, but will not accrue on overdue interest.
SERIES PREFERRED STOCK
The Series Preferred Stock is issuable, from time to time, in one or
more series, with such designations, preferences and relative, participating,
optional or other special rights, qualifications, limitations or restrictions
thereof as shall be stated and expressed in a resolution or resolutions
providing for the issue of such series adopted by the Board of Directors. All
shares of any one series of the Series Preferred Stock are required to be alike
in every particular and all series are required to rank equally and be
identical in all respects, except insofar as they may vary with respect to
matters which the Board is expressly authorized by the Company's Restated
Certificate of Incorporation to determine in the resolution or resolutions
providing for the issue of any series of the Series Preferred Stock. No
assurance can be given that the terms of any future series of Series Preferred
Stock will not materially limit or qualify the rights of the holders of Class A
or Class B Common Stock in a manner that is different from or in addition to
the terms of any class or series of Preferred Stock that are outstanding on the
date of this Prospectus.
Convertible Preferred Stock, Series C. The Company is authorized to
issue 80,000 shares of Convertible Preferred Stock, Series C ("Series C
Preferred Stock"), of which 70,559 were issued and outstanding as of the date
of this Prospectus. Each share of Series C Preferred Stock is convertible, at
the option of the holder, into 100 shares of Class A Common Stock, subject to
anti-dilution adjustments. The dividend, liquidation and redemption features of
the Series C Preferred Stock, each of which is discussed below, are determined
by reference to the liquidation value of the Series C Preferred Stock, which as
of any date of determination is equal, on a per share basis, to the sum of (i)
$2,375, plus (ii) all dividends accrued on such share through the dividend
payment date on or
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immediately preceding such date of determination to the extent not paid on or
before such date, plus (iii), for purposes of determining liquidation and
redemption payments, all unpaid dividends accrued on the sums of clauses (i)
and (ii) above, to such date of determination. The holders of Series C
Preferred Stock are entitled to receive preferential cumulative cash dividends
out of funds legally available therefor. Dividends accrue cumulatively at an
annual rate of 5 1/2% of the liquidation value per share, whether or not such
dividends are declared or funds are legally or contractually available for
payment of dividends, except that if the Company fails to redeem shares of
Series C Preferred Stock required to be redeemed on a redemption date,
dividends will thereafter accrue cumulatively at an annual rate of 15% of the
liquidation value per share. Dividends not paid on any dividend payment date
will be added to the liquidation value on such date and remain a part thereof
until such dividends and all dividends accrued thereon are paid in full.
Dividends will accrue on unpaid dividends at the rate of 5 1/2% (15% under the
circumstances described above) per annum, unless such dividends remain unpaid
for two consecutive quarters in which event such rate will increase to 15% per
annum.
Upon the dissolution, liquidation or winding up of the Company,
holders of the Series C Preferred Stock will be entitled to receive from the
assets of the Company available for distribution to stockholders an amount in
cash, per share, equal to the liquidation value of the Series C Preferred
Stock, and no more, in preference to any liquidating distribution to the
holders of Class A and Class B Common Stock.
The Series C Preferred Stock is subject to optional redemption at any
time after the seventh anniversary of its issuance, in whole or in part, by the
Company at a redemption price per share equal to the then liquidation value of
the Series C Preferred Stock. Subject to the prior preferences and other rights
of any other class or series of Preferred Stock ranking senior to or on a
parity with the Series C Preferred Stock, the Series C Preferred Stock is
required to be redeemed by the Company at any time after such seventh
anniversary at the option of the holder, in whole or in part (provided that the
aggregate liquidation value of the shares to be redeemed is in excess of $1
million), in each case at a redemption price per share equal to the liquidation
value.
Convertible Preferred Stock, Series D. The Company is authorized
to issue 1,000,000 shares of Convertible Preferred Stock, Series D (the "Series
D Preferred Stock"), which are to be originally issued to former stockholders
of TeleCable Corporation ("TeleCable") in connection with the merger, effected
on January 26, 1995, or TeleCable with a wholly owned subsidiary of the
Company.
Each share of Series D Preferred Stock is be convertible, at the
option of the holder, into 10 shares of Class A Common Stock, subject to
anti-dilution adjustments. The dividend, liquidation and redemption features of
the Series D Preferred Stock, each of which is discussed below, are
determined by reference to the liquidation value of the Series D Preferred
Stock, which as of any date of determination is equal, on a per share basis, to
the sum of (i) $300, plus (ii) all dividends accrued on such share through the
dividend payment date on or immediately preceding such date of determination to
the extent not paid on or before such date, plus (iii) for purposes of
determining liquidation and redemption payments, all unpaid dividends accrued
on the sum of clauses (i) and (ii) above, to such date of determination.
The holders of Series D Preferred Stock are entitled to receive
preferential cumulative cash dividends out of funds legally available therefor.
Dividends accrue cumulatively at an annual rate of 5 1/2% of the liquidation
value per share, whether or not such dividends are declared or funds are
legally or contractually available for payment of dividends, except that if the
Company fails to redeem shares of Series D Preferred Stock required to be
redeemed on a redemption date, dividends thereafter will accrue cumulatively at
an annual rate of 10% of the liquidation value per share. Dividends not paid on
any dividend payment date will be added to the liquidation value on such date
and remain a part thereof until such dividends and all dividends accrued
thereon are paid in full. Dividends will accrue on unpaid dividends at the rate
of 5 1/2% per annum, unless such dividends remain unpaid for two consecutive
quarters (or, as described above, if the Company fails to redeem shares of
Series D Preferred Stock on a redemption date) in which event such rate shall
increase to 10% per annum. To the extent any cash dividends are not paid on any
dividend payment date, the amount of such dividends will be converted, to the
extent permissible under the Delaware General Corporation Law, into shares of
Class A Common Stock at a conversion rate equal to the quotient obtained by
dividing the missed dividend amount by 95% of the then current market price per
share (as defined in the certificate of designations establishing the Series D
Preferred Stock) of Class A Common Stock, and upon issuance of Class A Common
Stock to holders of Series D Preferred Stock in respect of such conversion such
dividend will be deemed paid for all purposes.
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Upon the dissolution, liquidation or winding up of the Company,
holders of the Series D Preferred Stock will be entitled to receive from the
assets of the Company available for distribution to stockholders an amount in
cash, per share, equal to the liquidation value of the Series D Preferred
Stock, and no more, in preference to any liquidating distribution to the
holders of Class A and Class B Common Stock.
The Series D Preferred Stock is subject to optional redemption
by the Company at any time after the fifth anniversary of its issuance, in
whole or from time to time in part, at a redemption price per share equal to the
liquidation value of the Series D Preferred Stock. Shares of Series D Preferred
Stock will also be subject to optional redemption by the Company after the
third anniversary of the issue date if the market value per share of Class A
Common Stock shall have exceeded $37.50 for the period specified in the
certificate of designations establishing the Series D Preferred Stock. Subject
to the prior preferences and other rights of any other class or series of
Preferred Stock ranking senior to or on a parity basis with, and subject to any
prohibition or restriction contained in any instrument evidencing indebtedness
of the Company, any holder of Series D Preferred Stock, at such holder's
option, may require the Company, at any time after the tenth anniversary of the
issuance of such Series D Preferred Stock, to redeem all or a portion of such
holder's shares of Series D Preferred Stock, provided that the aggregate
liquidation value of the shares to be redeemed is in excess of $50,000 (or, if
all of the shares of Series D Preferred Stock held by such holder has an
aggregate liquidation value of less than $50,000, all but not less than all of
such shares of Series D Preferred Stock), in each case at a redemption price
per share equal to the then liquidation value of the Series D Preferred Stock.
If the Company fails to effect any redemption of Series D Preferred Stock, the
holders thereof will have the option to convert their shares of Series D
Preferred Stock into Class A Common Stock at a conversion rate equal to the
quotient obtained by dividing the redemption price by 95% of the current market
value per share of the Class A Common Stock over a period specified in the
certificate of designations establishing the Series D Preferred Stock, provided
that in the case of a failure by the Company to redeem shares at the option of
the holder such option may not be exercised until the first anniversary of such
failure.
Redeemable Convertible Preferred Stock, Series E. The Company is
authorized to issue 400,000 shares of Redeemable Convertible Preferred Stock,
Series E ("Series E Preferred Stock") of which 246,402 were issued and
outstanding as of the date of this Prospectus and all of which were held by
wholly owned subsidiaries of the Company. At any time after the Company amends
its Restated Certificate of Incorporation to increase the number of authorized
shares of Class A Common Stock to a number that would permit the conversion of
all of the shares of Series E Preferred Stock then outstanding, the shares of
Series E Preferred Stock shall be convertible, at the option of the holder,
into Class A Common Stock at the rate of 1,000 shares of Class A Common Stock
for each share of Series E Preferred Stock, subject to anti-dilution
adjustments. The dividend, liquidation and redemption features of the Series E
Preferred Stock, each of which is discussed below, are determined by reference
to the liquidation value of the Series E Preferred Stock, which as of any date
of determination is equal, on a per share basis, to the sum of (i) $22,303,
plus (ii) all dividends accrued on such share through the dividend payment date
on or immediately preceding such date of determination to the extent not paid
on or before such date, plus (iii) for purposes of determining liquidation and
redemption payments, all unpaid dividends accrued on the sum of clauses (i) and
(ii) above, to such date of determination.
The holders of Series E Preferred Stock are entitled to receive
preferential cumulative cash dividends out of funds legally available therefor.
Dividends accrue cumulatively at an annual rate of 5% of the stated liquidation
value per share, whether or not such dividends are declared or funds are
legally available for payment of dividends. Dividends not paid on any dividend
payment date are added to the liquidation value on such date and remain a part
thereof until such dividends are paid.
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<PAGE> 9
Upon the dissolution, liquidation or winding up of the Company,
holders of the Series E Preferred Stock will be entitled to receive from the
assets of the Company available for distribution to stockholders an amount in
cash or property or a combination thereof, per share, equal to the liquidation
value of the Series E Preferred Stock, and no more, in preference to any
liquidating distribution to the holders of Class A and Class B Common Stock.
The Series E Preferred Stock is subject to optional redemption by the
Company at any time, in whole or in part, at a redemption price, per share,
equal to the then liquidation value of the Series E Preferred Stock. The
Company may elect to pay the redemption price (or designated portion thereof)
of the shares of Series E Preferred Stock called for redemption by issuing to
the holder thereof, in respect of his shares to be redeemed, a number of shares
of Class A Common Stock equal to the aggregate redemption price (or designated
portion thereof) of such shares divided by the average of the last daily sales
prices of the Class A Common Stock for a specified period, subject to
adjustments described in the certificate of designations establishing the
Series E Preferred Stock.
RANKING; LIMITATIONS ON RIGHTS OF HOLDERS OF COMMON STOCK
All classes and series of Preferred Stock outstanding on the date of
this Prospectus rank senior to the Class A and Class B Common Stock as to
dividend rights, rights to redemption and rights on liquidation.
For so long as any dividends are in arrears on any outstanding class
or series of Preferred Stock, and until all dividends accrued up to the
immediately preceding dividend payment date on such Preferred Stock and on any
class or series of Preferred Stock ranking on a parity with such Preferred
Stock ("Parity Stock") shall have been paid or declared and set apart so as to
be available for payment in full thereof and for no other purpose, neither the
Company nor any subsidiary thereof may purchase or otherwise acquire any shares
of Class A or Class B Common Stock, or set aside any money or assets for any
such purpose, unless all of the outstanding shares of such Preferred Stock and
Parity Stock are redeemed. For so long as any dividends are in arrears on any
outstanding class or series of Preferred Stock and until all dividends accrued
up to the immediately preceding dividend payment date on such Preferred Stock
shall have been paid or declared and set apart so as to be available for
payment in full thereof and for no other purpose, the Company may not declare
or pay any dividend on or make any distribution with respect to the Class A or
Class B Common Stock or set aside any money or assets for any such purpose. If
the Company fails to redeem shares of Class A, Class B or Series E Preferred
Stock required to be redeemed on a redemption date, the Company may not declare
or pay any dividend on or make any distribution with respect to the Class A or
Class B Common Stock or set aside money or assets for any such purpose, and
neither the Company nor any subsidiary thereof may purchase or otherwise
acquire any shares of Class A or Class B Common Stock or set aside any money or
assets for any such purpose, until all shares of such class or series of
Preferred Stock are redeemed in full. If the Company fails to redeem shares of
Series C or Series D Preferred Stock required to be redeemed on a redemption
date, neither the Company nor any subsidiary thereof may purchase or otherwise
acquire any shares of Class A or Class B Common Stock or set aside any money or
assets for any such purpose, until all shares of such series of Preferred Stock
are redeemed in full. Neither the Company nor any subsidiary thereof may
purchase or otherwise acquire any shares of Class A or Class B Common Stock, or
set aside any money or assets for such purpose, if after giving effect to such
purchase or acquisition the amount that would be available for distribution to
the holders of Class A, Class B and Series E Preferred Stock upon liquidation,
dissolution or winding up of the Company, if such liquidation, dissolution or
winding up were to occur on the date fixed for such purchase or acquisition of
shares of Class A or Class B Common Stock, would be less than the aggregate
liquidation preference of all then outstanding shares of such classes and
series of Preferred Stock. The failure of the Company (i) to redeem on any
date fixed for redemption any outstanding shares of Class A, Class B or Series
E Preferred Stock or (ii) to pay dividends on the Series C or Series D
Preferred Stock, shall not prevent the Company from paying any dividends on
Class A or Class B Common Stock solely in shares of capital stock ranking
junior to such class or series of Preferred Stock or (with respect to (i) above
only) the purchase or other acquisition of Class A or Class
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<PAGE> 10
B Common Stock solely in exchange for (together with a cash adjustment for
fractional shares, if any) shares of such junior capital stock.
Upon the dissolution, liquidation or winding up of the Company, the
holders of each class or series of Preferred Stock then outstanding will be
entitled to receive from the assets of the Company available for distribution
to stockholders an amount in cash or property or a combination thereof equal to
the aggregate liquidation value of such Preferred Stock in preference to any
liquidating distribution to the holders of Class A or Class B Common Stock.
PLAN OF DISTRIBUTION
The Shares may be offered for sale and sold by the Selling Stockholder
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
Stockholder 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 Stockholder, 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 Stockholder that it has
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 Stockholder 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 Stockholder and any agents or broker-dealers that
participate with the Selling Stockholder 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
commissions or discounts 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.
LEGAL MATTERS
Certain legal matters with respect to the Shares will be passed upon
for the Company by Baker & Botts, L.L.P. Jerome H. Kern, a partner at Baker &
Botts, L.L.P., is a director of the Company. Mr. Kern holds options to
purchase shares of Class A Common Stock.
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<PAGE> 11
EXPERTS
The consolidated balance sheets of TCI Communications, Inc. (formerly
Tele-Communications, Inc.) and subsidiaries as of December 31, 1993 and 1992,
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, 1993, and the related financial statement schedules, which appear in the
Annual Report on Form 10-K, as amended, of TCI Communications, Inc. for the
year ended December 31, 1993, have been incorporated by reference herein in
reliance upon the reports, dated March 21, 1994, 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 refer to a change in the method of accounting
for income taxes in 1993.
The consolidated balance sheets of Liberty Media Corporation and
subsidiaries (Successor) as of December 31, 1993 and 1992, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years ended December 31, 1993 and 1992 and the period from April 1, 1991 to
December 31, 1991 (Successor Periods) and the consolidated statements of
operations, stockholders' equity, and cash flows of Liberty Media (a
combination of certain programming interests and cable television assets of TCI
Communications, Inc. (formerly Tele-Communications, Inc.)) (Predecessor) for
the period from January 1, 1991 to March 31, 1991 (Predecessor Period),
included in the Form 8-K of TCI Communications, Inc. dated April 6, 1994, have
been incorporated by reference herein in reliance upon the report, dated March
18, 1994, 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 refers
to a change in the method of accounting for income taxes in 1993.
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 herein by reference to TCI Communications, Inc.'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 accounting and auditing.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents filed with the Commission under the Exchange Act: (i) the
Company's Annual Report on Form 10-K for the year ended December 31, 1993, as
amended by Form 10-K/A (Amendment 1) (Commission File No. 0-5550), (ii) the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994,
as amended by Form 10-Q/A (Amendment 1) (Commission File No. 0-5550), (iii) the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994
(Commission File No. 0-5550), (iv) the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1994, as amended by Form 10-Q/A (Amendment
1) and Form 10-Q/A (Amendment No. 2) (Commission File No. 0-20421), (v) the
Company's Current Reports on Form 8-K dated February 15, 1994, February 25,
1994, April 6, 1994 and May 27, 1994, as amended by Form 8-K/A (Amendment 1)
(Commission File No. 0-5550), and (vi) the Company's Current Reports on Form
8-K dated August 5, 1994, August 18, 1994, August 26, 1994, October 27, 1994,
December 2, 1994, as amended by Form 8K/A (Amendment No. 1), and January 23,
1995 (Commission File No. 0-20421).
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
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<PAGE> 12
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 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.
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<PAGE> 13
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.
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TABLE OF CONTENTS
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PAGE
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AVAILABLE INFORMATION . . . . . . . . . . . . . . . 2 3,403,405 SHARES
CERTAIN CONSIDERATIONS . . . . . . . . . . . . . . 2
THE COMPANY . . . . . . . . . . . . . . . . . . . . 3
SELLING STOCKHOLDER . . . . . . . . . . . . . . . . 3
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . 4 TELE-COMMUNICATIONS, INC.
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . 10
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . 10
EXPERTS . . . . . . . . . . . . . . . . . . . . . . 11 CLASS A COMMON STOCK
INCORPORATION OF DOCUMENTS BY ($1.00 PAR VALUE)
REFERENCE . . . . . . . . . . . . . . . . . . . 11
PROSPECTUS
FEBRUARY 2, 1995
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