<PAGE>
As filed with the Securities and Exchange Commission on July 3, 1996
REGISTRATION NO. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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TELE-COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
Delaware 5619 DTC Parkway 84-1260157
(State or other jurisdiction of Englewood, Colorado 80111-3000 (I.R.S. Employer
incorporation or organization) (303) 267-5500 Identification No.)
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
</TABLE>
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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)
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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
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PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED (1) PER SHARE (2) PRICE (2) FEE
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<S> <C> <C> <C> <C>
Tele-Communications, Inc. Series A TCI Group
Common Stock, par value $1.00 per share..... 7,529,016 shares $18.1875 $136,933,978.50 $47,219
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(1) Represents the maximum number of shares issuable pursuant to the terms of
the Asset Purchase Agreement described herein.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Act on the basis of the average of the high and
low sales prices reported on the Nasdaq National Market on July 2, 1996.
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.
<PAGE>
Subject to Completion, dated July 3, 1996
PROSPECTUS
7,529,016 SHARES
TELE-COMMUNICATIONS, INC.
SERIES A TCI GROUP COMMON STOCK
This Prospectus relates to 7,529,016 shares (the "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"), to be offered and sold from time
to time by Knight-Ridder Cablevision, Inc., a Florida corporation ("KRC" or the
"Selling Stockholder"). See "The Selling Stockholder and the Offered Shares."
The Company's common stock, par value $1.00 per share (the "TCI Common
Stock"), is comprised of four series: TCI Group Series A Common Stock, Tele-
Communications, Inc. Series B TCI Group Common Stock (the "TCI Group Series B
Common Stock" and, together with the TCI Group Series A Common Stock, the "TCI
Group Common Stock"), Tele-Communications, Inc. Series A Liberty Media Group
Common Stock (the "LMG Series A Common Stock") and Tele-Communications, Inc.
Series B Liberty Media Group Common Stock (the "LMG Series B Common Stock" and,
together with the LMG Series A Common Stock, the "Liberty Media Group Common
Stock").
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. See "Description of TCI Common Stock."
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.
SEE "RISK FACTOR" ON PAGE 3 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
RISKS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SHARES
OFFERED HEREBY.
The Shares may be offered for sale and sold by the Selling Stockholder from
time to time in varying amounts (subject to certain restrictions described under
the caption "The Selling Stockholder and the Offered Shares"), 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 or through agents designated from time to time
or to or through broker-dealers designated from time to time. See "Plan of
Distribution." To the extent required, the number of Shares to be sold, the
purchase price, the name of any agent or broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such 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 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 "The Selling Stockholder and the Offered Shares." The Company
will not receive any proceeds from the sale of the Shares. The Company knows of
no selling arrangement between any agent or broker-dealer and the Selling
Stockholder.
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 of 1933, as
amended (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.
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 July __, 1996.
<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.
The Registration Statement, including any amendments, schedules and
exhibits filed or incorporated by reference as a part thereof, is available
for inspection and copying as set forth below. 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, proxy statements, information
statements and other information with the Commission. Such reports, proxy
statements, information statements and other information (including the
Registration Statement) filed with the Commission 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, and at the following Regional Offices of the
Commission: Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-
2511; and at Suite 1300, 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants (including the Company) that file electronically with the
Commission. The address of the Commission's Web site is
http://www.sec.gov. Reports, proxy statements, information statements and
other information concerning the Company can also be inspected at the
Nasdaq Stock Market at 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the
Commission under the Exchange Act and are hereby incorporated into this
Prospectus by reference and made a part hereof (Commission File No. 0-
20421): (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, (ii) the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 (as amended by Form 10-Q/A (Amendment No. 1)),
(iii) the Company's Current Reports on Form 8-K, dated February 9, 1996,
June 19, 1996 and July 2, 1996, and (iv) the financial statements and notes
thereto of Cablevision (a combination of certain cable television assets of
Cablevision S.A., Televisora Belgrano S.A., Construred S.A. and Univent's
S.A.) as of December 31, 1994 and 1993, and 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 the Company, dated April 20, 1995 (as amended by Form
8-K/A (Amendment No. 1)).
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, including any
beneficial owner, to whom a Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the documents
incorporated by reference herein, other than certain exhibits to such
documents (unless such exhibits are specifically
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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.
RISK FACTOR
The Company incurred net losses of $171 million and $5 million for the
years ended December 31, 1995 and 1993, respectively, and a net loss of
$118 million for the three months ended March 31, 1996. The Company had net
earnings of $62 million for the year ended December 31, 1994, and a net
loss of $45 million for the three months ended March 31, 1995.
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) ($1,975 million, $1,798 million and $1,858 million for
the years ended December 31, 1995, 1994 and 1993, respectively, and $537
million and $464 million for the three months ended March 31, 1996 and
1995, respectively) has historically been sufficient to cover its interest
expense ($1,010 million, $785 million and $731 million for the years ended
December 31, 1995, 1994 and 1993, respectively, and $261 million and $240
million for the three months ended March 31, 1996 and 1995, respectively).
The Company's interest coverage ratios for the years ended December 31,
1995, 1994 and 1993 were 196%, 229% and 254%, respectively and for the
three months ended March 31, 1996 and 1995 were 206% and 193%,
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. Operating cash flow, as
defined, does not take into consideration substantial costs of doing
business, such as interest expense, and should not be considered in
isolation to other measures of performance.
Another measure of liquidity is net cash provided by operating
activities as reflected in the Company's consolidated statements of cash
flows. Net cash provided by operating activities ($957 million, $908
million and $1,247 million for the years ended December 31, 1995, 1994 and
1993, respectively, and $317 million and $151 million for the three months
ended March 31, 1996 and 1995, respectively) reflects net cash from the
operations of the Company available for the Company's liquidity needs after
taking into consideration the aforementioned substantial costs of doing
business not reflected in operating cash flow. Amounts expended by the
Company for its investing activities exceed net cash provided by operating
activities.
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 is one of the largest providers of cable television services in the
United States. The Company also has interests 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. The Company is primarily
organized into four principal business groups: Domestic Tele-communications
and Distribution; Programming; International Cable and Programming; and
Technology/Venture Capital. 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.
THE SELLING STOCKHOLDER AND THE OFFERED SHARES
Background. Pursuant to an Asset Purchase Agreement, dated as of
March 18, 1996 (the "Purchase Agreement"), by and between KRC, KRC-SNJ,
Inc., a Delaware corporation, KRC-NJFT, Inc., a Delaware corporation and
Knight-Ridder Investment Company, a Delaware corporation, and the Company,
the Company (i) acquired from the Selling Stockholder and its affiliates
certain assets consisting primarily of ownership interests in entities that
are
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directly or indirectly engaged in the business of providing cable
television service to subscribers in various areas of the United States and
a Subordinated Note, dated November 14, 1995, made by TKR Cable Company, a
Colorado general partnership, and payable to the order of Knight-Ridder
Investment Company (the "Acquired Assets") and (ii) assumed certain
liabilities relating to the Acquired Assets. Under the terms of the
Purchase Agreement, a portion of the purchase price for the Acquired Assets
was paid by the delivery to the Selling Stockholder of an aggregate of
15,058,032 shares of TCI Group Series A Common Stock (the "Transaction
Shares"). The number of Transaction Shares delivered by the Company was
calculated pursuant to the Purchase Agreement by dividing the portion of
the purchase price to be paid in shares of TCI Group Series A Common Stock
by the average of the closing market prices of a share of TCI Group Series
A Common Stock on the Nasdaq National Market on each trading day during the
period commencing on the thirtieth trading day prior to the closing of the
acquisition (the "Closing Date") and ending on the tenth trading day prior
to the Closing Date. In calculating the maximum number of Transaction
Shares which are issuable at the Closing Date, such average of closing
market prices was assumed, pursuant to the Purchase Agreement, to have a
minimum value of $18.50.
Shares Offered by the Selling Stockholder. The Transaction Shares
received by the Selling Stockholder, including the Shares, constitute
restricted securities and cannot be transferred unless they are registered
under the Securities Act or an exemption from registration is available.
In connection with the execution of the Purchase Agreement, the Company and
the Selling Stockholder entered into a Registration Rights Agreement, dated
as of March 18, 1996 (the "Registration Rights Agreement"), pursuant to
which the Company agreed, subject to certain limitations, to file the
Registration Statement of which this Prospectus forms a part in order to
permit the resale of the Shares from time to time by the Selling
Stockholder and to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration
Statement effective until the earlier of the third anniversary of the
Closing Date or such time as all of the Shares offered hereby have been
sold. Also, pursuant to the Registration Rights Agreement, the Company
agreed, subject to certain limitations, to prepare and file with the
Commission another registration statement (the "Additional Registration
Statement") in order to permit the resale by the Selling Stockholder of the
remaining 7,529,016 Transaction Shares not included in the Registration
Statement of which this Prospectus forms a part. The Company has agreed to
file the Additional Registration Statement with the Commission and to cause
it to be declared effective under the Securities Act not later than the
second anniversary of the Closing Date. Notwithstanding the foregoing, the
Company may, in lieu of filing the Additional Registration Statement,
purchase the remaining 7,529,016 Transaction Shares otherwise required to
be registered thereunder, at a price determined pursuant to the
Registration Rights Agreement.
Under certain circumstances set forth in the Registration Rights
Agreement, the Company may, upon notice to the Selling Stockholder, require
the suspension by the Selling Stockholder of the distribution of any Shares
for a reasonable period of time not to exceed 15 consecutive business days
(a "Blackout Period"). There may not be more than four Blackout Periods in
any period of twelve consecutive calendar months, and the number of days
the Selling Stockholder may be required to suspend distributions of Shares
may not exceed 45 business days in any period of twelve consecutive
calendar months.
Pursuant to the Registration Rights Agreement, the Company has agreed
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 with 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 and (ii) fees and disbursements of counsel or of
any advisors retained by the Selling Stockholder in connection with the
registration of the offer and sale of the Shares.
The Company has agreed to indemnify the Selling Stockholder 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 the Selling Stockholder may be required to make
in respect thereof.
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Neither the Company nor any of its affiliates has had within the past
three years any material relationship with the Selling Stockholder, except
that subsidiaries of each of the Company and the Selling Stockholder were
partners in various partnerships which directly or indirectly operated
cable television systems. All of the interests of the Selling Stockholder
in those partnerships were purchased by the Company pursuant to the
Purchase Agreement. Any additional material relationships between the
Company or any of its affiliates, on the one hand, and the Selling
Stockholder, on the other, within three years prior to the date of a sale
by the Selling Stockholder hereunder will be described in the Prospectus
Supplement.
As of the date hereof, KRC owns 15,058,032 shares of TCI Group Series
A Common Stock (which represents approximately 2.52% of the outstanding
shares of such stock based on the number of shares of TCI Group Series A
Common Stock outstanding on April 30, 1996). The number of Shares sold by
KRC and (if one percent or more) the percentage of the outstanding shares
of TCI Group Series A Common Stock owned by KRC after completion of any
offering hereunder will be specified in the Prospectus Supplement relating
to such sale.
A copy of the Registration Rights Agreement has been filed as exhibit
99.1, to the Registration Statement and can be obtained in the manner
described under "Available Information."
PLAN OF DISTRIBUTION
Subject to the restrictions described under the caption "The Selling
Stockholder and the Offered Shares," the Shares may be offered for sale and
sold by the Selling Stockholder from time to time in one or more public or
private 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 or through agents designated from time to time or to or through
broker-dealers designated from time to time. The 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 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 discounts or commissions under the Securities Act.
In connection with a sale of Shares, the following information will,
to the extent then required, be provided in the Prospectus Supplement
relating to such sale: the number of Shares to be sold, the purchase
price, the name of any agent or broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such
agents or broker-dealers with respect to the particular sale.
DESCRIPTION OF TCI COMMON STOCK
The following description of certain terms of the TCI Common Stock
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 is an exhibit to the Registration Statement.
GENERAL
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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,
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 April 30, 1996, 583,361,905 shares of TCI Group Series A Common
Stock, 84,682,729 shares of TCI Group Series B Common Stock, 145,815,385
shares of LMG Series A Common Stock and 21,192,387 shares of LMG Series B
Common Stock (in each case net of shares held by subsidiaries of TCI) had
been issued and were outstanding and 100,524,364 shares of TCI Group Series
A Common Stock were held by subsidiaries of TCI. As of that date,
90,809,696 shares of TCI Group Series A Common Stock and 20,880,824 shares
of LMG Series A Common Stock were reserved for issuance upon conversion,
exchange or exercise of outstanding convertible or exchangeable securities
and options. In addition, TCI has reserved a number of shares of TCI Group
Series A Common Stock equal to the number of shares of TCI Group Series B
Common Stock outstanding, and a number of shares of LMG Series A Common
Stock equal to the number of shares of LMG Series B Common Stock
outstanding, for issuance upon conversion, at the option of the holder, of
the TCI Group Series B Common Stock and LMG Series B Common Stock,
respectively. Additionally, subsidiaries of TCI own shares of the
Company's Convertible Redeemable Participating Preferred Stock, Series F
(the "Series F Preferred Stock") which is convertible into 357,565,989
shares of TCI Group Series A Common Stock.
The TCI Charter also authorizes 52,375,096 shares of preferred stock
(the "TCI Preferred Stock"), of which 700,000 shares are designated Class A
Preferred Stock, par value $0.01 per share (the "Class A Preferred Stock"),
1,675,096 shares are designated Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock, par value $.01 per share (the "Class B
Preferred Stock"), and 50,000,000 shares are designated Series Preferred
Stock, par value $.01 per share (the "Series Preferred Stock"), issuable in
series. All of the shares of Class A Preferred Stock have previously been
redeemed and retired and may not be reissued, thereby reducing the number
of authorized shares of TCI Preferred Stock. Of the Series Preferred
Stock, as of March 31, 1996, 80,000 shares are designated Convertible
Preferred Stock, Series C (the "Series C Preferred Stock"), 1,000,000
shares are designated Convertible Preferred Stock, Series D (the "Series D
Preferred Stock"), 400,000 shares are designated Redeemable Convertible
Preferred Stock, Series E (the "Series E Preferred Stock"), 500,000 shares
are designated Series F Preferred Stock, 7,259,380 shares are designated
Redeemable Convertible TCI Group Preferred Stock, Series G (the "Series G
Preferred Stock") and 7,259,380 shares are designated Redeemable
Convertible Liberty Media Group Preferred Stock, Series H (the "Series H
Preferred Stock"). As of March 31, 1996, 1,620,026 shares of Class B
Preferred Stock, 70,575 shares of Series C Preferred Stock, 999,569 shares
of Series D Preferred Stock, 277,719 shares of Series F Preferred Stock,
7,259,380 shares of Series G Preferred Stock and 7,259,380 shares of Series
H Preferred Stock had been issued and were outstanding. All of the shares
of Series E Preferred Stock have previously been redeemed and retired with
the effect that such shares have been restored to the status of authorized
and unissued shares of Series Preferred Stock and may be reissued as
shares of another series of Series Preferred Stock, but not as Series E
Preferred Stock. All of the outstanding shares of Series F Preferred Stock
are held by subsidiaries of TCI. Approximately 33,901,240 shares of Series
Preferred Stock remain available for designation pursuant to the TCI
Charter as of March 31, 1996. The rights evidenced by the TCI Common Stock
are subject to the prior preferences and rights of the TCI Preferred 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
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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.
"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 Common Stock and one-fourth of one
share of LMG Series B Common Stock on each outstanding share of TCI Group
Series B 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
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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 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 of Liberty Media
Group Common Stock at the Option of TCI" and "--Conversion and Redemption--
Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
Stock" and "--Liquidation Rights," (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
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(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,
(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).
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
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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.
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 or series of
TCI Preferred Stock, 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
Preferred Stock entitled to vote on a particular matter will vote as one
class for all purposes. See "--Other Matters."
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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, and other rights
of, any of the outstanding shares of TCI 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 Preferred Stock
attributed to the TCI Group or (b) in case there is no such excess, an
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 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
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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 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, or 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
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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 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
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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 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. The Liberty Media Group Common Stock Per Share Value will
equal the quotient obtained by dividing the Liberty Media Group Private
Market Value by the Adjusted Outstanding Shares of Liberty Media Group
Common Stock, which will be determined in the manner described below.
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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 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
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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;
(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
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(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.
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 acquiror 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, acquiror 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
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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 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 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.
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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 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
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"Dividend Election"), (x) the record date for 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 of
Liberty Media Group Common Stock 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 of Liberty Media Group Common Stock 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 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
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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 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
21
<PAGE>
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 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
22
<PAGE>
redemption. Shares selected for redemption may not thereafter be converted
pursuant to the provisions described under "--Conversion of TCI Group
Series B Common Stock and LMG Series B Common Stock 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
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
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.
23
<PAGE>
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.
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 this section 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,
24
<PAGE>
or has the right to acquire such stock (whether such right is 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, Class
B Preferred Stock and certain series of Series Preferred Stock, 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 of which 33,901,240 shares remain available for designation
as of March 31, 1996. 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 1,131,431,002 and 657,992,228
respectively, remained available for issuance as of April 30, 1996 (before
giving effect to reservations of shares for issuance upon conversion,
exchange or exercise of outstanding convertible or exchangeable securities
and options). 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, 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
25
<PAGE>
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, 1995 and 1994, 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, 1995, and all related
financial statement schedules, which appear in the December 31, 1995
Annual Report on Form 10-K of Tele-Communications, Inc., have been
incorporated by reference herein in reliance upon the reports, dated March
18, 1996, 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 combined balance sheets of TCI Group as of December 31, 1995 and
1994, and the related combined statements of operations, equity, and cash
flows for each of the years in the three-year period ended December 31,
1995, which appear in the December 31, 1995 Annual Report on Form 10-K of
Tele-Communications, Inc., have been incorporated by reference herein in
reliance upon the report, dated March 18, 1996, 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 combined financial
statements refers to the effects of not consolidating TCI Group's interest
in Liberty Media Group for the periods subsequent to the mergers of TCI
Communications, Inc. and Liberty Media Corporation on August 4, 1994.
The combined balance sheets of Liberty Media Group as of December 31,
1995 and 1994, and the related combined statements of operations, equity,
and cash flows for each of the years in the three-year period ended
December 31, 1995, which appear in the December 31, 1995 Annual Report on
Form 10-K of Tele-Communications, Inc., have been incorporated by reference
herein in reliance upon the report, dated March 18, 1996, 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 statements of operations, stockholders' equity, and cash flows of
Liberty Media Corporation and subsidiaries for the year ended December 31,
1993, which appear in the December 31, 1995 Annual Report on Form 10-K of
Tele-Communications, Inc., 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
26
<PAGE>
herein, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick LLP covering the December 31,
1993 financial statements refers to a change in method of accounting for
income taxes.
The consolidated balance sheet of TeleWest plc and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements of
operations and cash flows for each of the years in the three year period
ended December 31, 1995, which appear in the December 31, 1995 Annual
Report on Form 10-K of Tele-Communications, Inc., have been incorporated by
reference herein in reliance upon the report, dated March 6, 1996, of KPMG,
independent chartered 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.,
Construred 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, dated March 24, 1995, 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 combined financial statements of VII Cable which appear in TCI's
Current Report on Form 8-K dated June 19, 1996, have been incorporated by
reference herein in reliance on the report dated February 14, 1996 of Price
Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
27
<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 2
Incorporation of Documents by
Reference 2
Risk Factor 3
The Company 3
The Selling Stockholder and
the Offered Shares 3
Plan of Distribution 5
Description of TCI Common Stock 5
Legal Matters 26
Experts 26
</TABLE>
TELE-COMMUNICATIONS, INC.
Tele-Communications, Inc. Series A TCI Group
Common Stock ($1.00 par value)
-----------------------------------------
PROSPECTUS
-----------------------------------------
July ___, 1996
<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. Except for
the registration fee and additional listing fee, all expenses are
estimated.
<TABLE>
<CAPTION>
<S> <C>
Registration Fee...................................... $47,544.00
Blue Sky Fees and Expenses (including counsel fees)... 5,000.00
Legal Fees and Expenses............................... 15,000.00
Accounting Fees and Expenses.......................... 10,000.00
Additional Listing Fees............................... 17,500.00
Miscellaneous......................................... 1,000.00
----------
Total............................................ $96,044.00
----------
----------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
</TABLE>
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 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
II-1
<PAGE>
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 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."
II-2
<PAGE>
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 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 Stockholder has 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-3
<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, August 3,
1995, January 25, 1996 and January 25, 1996 (Incorporated herein by
reference to Exhibit 3.1 of Company's Annual Report on Form 10-K for
the year ended December 31, 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 (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 (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).
5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of KPMG.
23.6 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.7 Consent of Price Waterhouse LLP.
23.8 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
24 Powers of Attorney (included on Page II-7).
99.1 Registration Rights Agreement, dated as of March 18, 1996, by and
between Tele-Communications, Inc. and Knight-Ridder Cablevision, Inc.
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-4
<PAGE>
(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. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
the prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
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 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-5
<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 July 3, 1996.
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
--------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
II-6
<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
--------- ----- ----
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Bob Magness Chairman of the Board July 3, 1996
- -------------------------- and Director
(Bob Magness)
/s/ John C. Malone President and Director July 3, 1996
- -------------------------- (Principal Executive
(John C. Malone) Officer)
/s/ Donne F. Fisher Director July 3, 1996
- --------------------------
(Donne F. Fisher)
Director
- --------------------------
(John W. Gallivan)
/s/ Kim Magness Director July 3, 1996
- --------------------------
(Kim Magness)
Director
- --------------------------
(Robert A. Naify)
/s/ Jerome H. Kern Director July 3, 1996
- --------------------------
(Jerome H. Kern)
Director
- --------------------------
(Tony Coelho)
/s/ Bernard W. Schotters Senior Vice President of TCI July 3, 1996
- -------------------------- Communications, Inc.
(Bernard W. Schotters) (Principal Financial Officer)
/s/ Gary K. Bracken Senior Vice President of TCI July 3, 1996
- -------------------------- Communications, Inc.
(Gary K. Bracken) (Principal Accounting Officer)
</TABLE>
II-7
<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, August
3, 1995, January 25, 1996 and January 25, 1996 (Incorporated herein by
reference to Exhibit 3.1 of Company's Annual Report on Form 10-K for
the year ended December 31, 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 (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
(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).
5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of KPMG.
23.6 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.7 Consent of Price Waterhouse LLP.
23.8 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
24 Powers of Attorney (included on Page II-7).
99.1 Registration Rights Agreement, dated as of March 18, 1996, by and
between Tele-Communications, Inc. and Knight-Ridder Cablevision, Inc.
<PAGE>
TELE-COMMUNICATIONS, INC.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
EXHIBIT 5
---------
July 3, 1996
Board of Directors
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 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 TCI Group Common Stock, par value $1.00 per share
(the "Shares"), which Shares are (i) to be acquired by Knight-Ridder
Cablevision, Inc. ("KRC") pursuant to the Asset Purchase Agreement, dated as of
March 18, 1996 (the "Asset Purchase Agreement"), by and among KRC, KRC-SNJ,
Inc., KRC-NJFT, Inc., Knight-Ridder Investment Company and the Company and (ii)
to be offered and sold from time to time by KRC (the "Selling Stockholder").
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 Asset Purchase Agreement
and all exhibits thereto; 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 (i) 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, (ii) 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 Stockholder pursuant to the Registration Statement are actually
sold, (iii) that the representations and warranties of the parties other than
the Company contained in the Asset Purchase Agreement are true
<PAGE>
and complete and (iv) that the Shares will be issued in accordance with the
terms of the Asset Purchase Agreement.
Based upon the foregoing, I am of the opinion that the Shares proposed to
be sold by the Selling Stockholder have been duly authorized and, when the
Shares have been issued and delivered to the Selling Stockholder pursuant to the
terms of the Asset Purchase Agreement, the Shares 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 the registration statement
on Form S-3 of Tele-Communications, Inc. of our reports, dated March 18,
1996, relating to the consolidated balance sheets of Tele-Communications,
Inc. and subsidiaries as of December 31, 1995 and 1994, 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, 1995, and
all related financial statement schedules, which reports appear in the
December 31, 1995 Annual Report on Form 10-K of Tele-Communications, Inc.
and to the reference to our firm under the heading "Experts" in the
registration statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
July 3, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Stockholders
Tele-Communications, 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 18,
1996, relating to the combined balance sheets of TCI Group as of December
31, 1995 and 1994, and the related combined statements of operations,
equity, and cash flows for each of the years in the three-year period ended
December 31, 1995, which report appears in the December 31, 1995 Annual
Report on Form 10-K of Tele-Communications, Inc. and to the reference to
our firm under the heading "Experts" in the registration statement. Our
report covering the combined financial statements refers to the effects of
not consolidating TCI Group's interest in Liberty Media Group for the
periods subsequent to the mergers of TCI Communications, Inc. and Liberty
Media Corporation on August 4, 1994.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
July 3, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Stockholders
Tele-Communications, 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 18,
1996, relating to the combined balance sheets of Liberty Media Group as
of December 31, 1995 and 1994, and the related combined statements of
operations, equity, and cash flows for each of the years in the three-year
period ended December 31, 1995, which report appears in the December 31,
1995 Annual Report on Form 10-K of Tele-Communications, Inc. and to the
reference to our firm under the heading "Experts" in the registration
statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
July 3, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Stockholders
Liberty Media Corporation:
We consent to the incorporation by reference in the Registration Statement
on Form S-3 of Tele-Communications, Inc. of our report, dated March 18,
1994, relating to the consolidated statement of operations, stockholders'
equity, and cash flows of Liberty Media Corporation and subsidiaries for
the year ended December 31, 1993, which report appears in the December 31,
1995 Annual Report on Form 10-K of Tele-Communications, Inc. 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
Denver, Colorado
July 3, 1996
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Shareholders of
TeleWest plc:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Tele-Communications, Inc. of our report, dated March 6,
1996, relating to the consolidated balance sheet of TeleWest plc and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations and cash flows for each of the years in the three
year period ended December 31, 1995, which report appears in the December
31, 1995 Annual Report on Form 10-K of Tele-Communications, Inc. and to the
reference to our firm under the heading "Experts" in the registration
statement.
/s/ KPMG
KPMG
London, England
June 28, 1996
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors and Shareholders
of Tele-Communications International, 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 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., Construred 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 report appears 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
June 28, 1996
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Tele-
Communications, Inc. of our report dated February 14, 1996 relating to the
financial statements of VII Cable, which appears in Current Report
on Form 8-K dated June 19, 1996. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
------------------------
PRICE WATERHOUSE LLP
150 Almaden Boulevard
San Jose, California
July 1, 1996
<PAGE>
EXHIBIT 99.1
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement"), dated as of
March 18, 1996, is by and between Tele-Communications, Inc., a Delaware
corporation ("TCI") and Knight-Ridder Cablevision, Inc., a Florida corporation
("Seller").
WHEREAS, TCI and Seller are parties to an Asset Purchase Agreement
dated as of the date of this Agreement (the "Purchase Agreement") providing for
the acquisition by Buyer of certain assets of Seller;
WHEREAS, in connection with the transactions contemplated by the
Purchase Agreement, Seller is to receive, among other things, shares of Series A
TCI Group Common Stock, $1.00 par value per share, of TCI ("Series A Common
Stock"), which shares, when issued, will be "restricted securities" (as defined
in Rule 144 under the Securities Act of 1933, as amended), and TCI has agreed to
provide Seller with the registration rights set forth herein.
NOW THEREFORE, in consideration of the mutual agreements and covenants
set forth in the Purchase Agreement and in this Agreement, the parties agree as
follows:
1. Definitions. All terms with initial capital letters that are not
-----------
defined in this Agreement but that are defined in the Purchase Agreement will
have the meaning ascribed to them in the Purchase Agreement. In addition, each
of the following terms will have the meaning set forth below.
Advice: As defined in the last paragraph of Section 4(a).
------
Blackout Period: As defined in Section 4(b).
---------------
Exchange Act: The Securities and Exchange Act of 1934, as
------------
amended, or any successor federal statute, and the rules and regulations of the
SEC promulgated thereunder, as they each may from time to time be in effect.
Initial Registration Statement: As defined in Section 2(a).
------------------------------
Losses: As defined in Section 6(a).
------
Market Value: As to each Registrable Share at any date, the
------------
average of the reported closing market prices for shares of the Series A Common
Stock for the 20 consecutive trading days (or, if the market for such stock
first comes into being during such 20-day period, those
<PAGE>
trading days during such period for which reported market prices for such stock
are available) ending on the tenth trading day prior to the day in question
(e.g., if the day in question were Thursday, August 1, 1996, then the last
- -----
trading date to be counted in the 20-day trading period would be Thursday, July
18, 1996). The closing market price for each day in question will be the last
sale price, regular way or, if no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system of the principal
national securities exchange on which such stock is listed or admitted to
trading or, if such stock is not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if no such sale price is
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the Nasdaq National Market System ("Nasdaq") or such
other system then in use or, if on any such trading day such capital stock is
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by the professional market maker who has been most active in
making a market in such capital stock during the preceding 12 months. The Market
Value of such stock will be appropriately adjusted to reflect the effects of any
stock dividend, stock split, reclassification, recapitalization or combination
affecting such stock, the record date, ex-dividend date or similar date of which
occurs during the period in which the Market Value is to be determined or
thereafter prior to the date such stock is to be acquired by TCI pursuant to
this Agreement.
Prospectus: The prospectus included in the Registration
----------
Statement as of the date it becomes effective under the Securities Act and, in
the case of references to the Prospectus as of a date subsequent to the
effective date of the Registration Statement, as amended or supplemented as of
such date, including all documents incorporated by reference therein, as
amended, and each prospectus supplement relating to the offering and sale of any
of the Registrable Shares.
Registrable Shares: Shares of Series A Common Stock issued to
------------------
Seller pursuant to the Purchase Agreement and any other shares of capital stock
of TCI or any other Person issued in respect of such shares as a result of stock
splits, stock dividends, reclassifications, recapitalizations, mergers,
consolidations or similar events. References in this Agreement to amounts or
percentages of Registrable Shares as of or on any particular date will be deemed
to refer to amounts or percentages after giving effect to any applicable events
contemplated by the preceding sentence. Any Registrable Share will cease to be a
Registrable Share when (i) a Registration Statement covering such Registrable
Share has been declared effective under the Securities Act by the SEC and such
Registrable Share has been disposed of pursuant to such effective Registration
Statement, (ii) such Registrable Share may be resold, without any limitation as
to volume, pursuant to Rule 144 under the Securities Act (or a comparable
successor rule or regulation), or otherwise may be publicly resold without
registration under the Securities Act and without any limitation as to volume or
other material restriction, or (iii) such Registrable Share is no longer held by
Seller or an Affiliate of Seller.
Registration Statement: A registration statement of TCI on any
----------------------
form selected by TCI for which TCI then qualifies, which form is reasonably
satisfactory to Seller and permits the secondary resale thereunder of the number
of Registrable Shares required pursuant to this Agreement
-2-
<PAGE>
to be included therein. The term "Registration Statement" will also include all
exhibits, financial statements, schedules and other documents incorporated by
reference in such Registration Statement when it becomes effective under the
Securities Act and, in the case of the references to the Registration Statement
as of a date subsequent to its effective date, as amended or supplemented as of
such date.
SEC: The Securities and Exchange Commission or any other federal
---
agency at the time administering the Securities Act or the Exchange Act.
Securities Act: The Securities Act of 1933, as amended, or any
--------------
similar successor statute, and the rules and regulations of the SEC promulgated
thereunder, as they each may from time to time be in effect.
Seller Indemnified Parties: As defined in Section 6(a).
--------------------------
Subsequent Registration Statement: As defined in Section 2(b).
---------------------------------
TCI Indemnified Parties: As defined in Section 6(b).
-----------------------
2. Registration Rights.
-------------------
(a) Subject to compliance by Seller with the provisions of
Section 4(c), TCI will file with the SEC, as promptly as practicable
following the date of this Agreement but no later than 45 days after
the date of this Agreement, a registration statement (the "Initial
Registration Statement") covering all the Registrable Shares delivered
pursuant to Section 2.2.1(a) or Section 2.2.2(b) of the Purchase
Agreement, whichever is applicable. TCI will use its reasonable best
efforts to cause the Initial Registration Statement to become
effective before the Closing.
(b) Subject to compliance by Seller with the provisions of
Section 4(c), TCI will file with the SEC, at least 100 days before the
second anniversary of the Closing, a Registration Statement (the
"Subsequent Registration Statement") covering all the Series A Common
Stock delivered to Seller pursuant to Section 2.2.1(b) of the Purchase
Agreement and any other Registrable Shares that were not covered by
the Initial Registration Statement and that, as of the second
anniversary of the Closing, will be Registrable Shares; provided that
for purposes of Section 8 and Section 16, such shares will be deemed
Registrable Shares without regard to the limitation set forth in this
Section 2(b). TCI will cause the Subsequent Registration Statement to
become effective not later than the second anniversary of the Closing.
(c) Before filing a Registration Statement or Prospectus under
(a) or (b) above, TCI will furnish to one counsel selected by Seller
copies of all such documents proposed to be filed at least five
Business Days prior to the proposed date
-3-
<PAGE>
of filing, which documents will be subject to the reasonable review of
such counsel, and TCI will not file any Registration Statement or any
Prospectus (excluding any documents incorporated therein by reference)
to which such counsel reasonably objects. TCI will not be deemed to be
in default of its obligations timely to file a Registration Statement
or Prospectus as a result of a delay caused by an objection made by
Seller's counsel pursuant to this Section 2(c).
(d) Each Registration Statement covering Registrable Shares will
be for the offering and sale of such Registrable Shares on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act or
any similar successor statute. The section of the Registration
Statement entitled "Plan of Distribution" will be prepared in
accordance with the requirements of Item 508 of Regulation S-K
promulgated by the SEC under the Securities Act ("Regulation S-K")
and, notwithstanding anything to the contrary in this Agreement, will
provide that Seller may distribute the Registrable Shares pursuant to
such Registration Statement only in the manner set forth on Exhibit A
to this Agreement.
(e) TCI will be entitled to postpone, for a reasonable period of
time not in excess of 30 days, the filing of a Registration Statement
required to be filed by it pursuant to this Agreement, if (i) at any
time prior to the filing of such Registration Statement TCI
determines, in its reasonable good faith business judgment, that such
registration and offering would interfere with or otherwise adversely
affect any financing, acquisition, corporate reorganization, or other
material transaction involving TCI or any of its Affiliates or require
TCI to disclose matters that otherwise would not be required to be
disclosed at such time and (ii) TCI gives Seller written notice of
such postponement. Any such notice need not specify the reasons for
such postponement if TCI determines, in its reasonable good faith
business judgment, that doing so would interfere with or adversely
affect such transaction or development or would result in the
disclosure of material non-public information. In the event of such
postponement, TCI will file such Registration Statement as soon as
practicable after it determines, in its reasonable good faith business
judgment, that such registration and offering will not interfere with
the matters described in the first sentence of this Section 2(e) but
in no event more than 30 days.
3. Limitations on Registration Rights.
----------------------------------
(a) Notwithstanding the provisions of Section 2, TCI will not be
required to effect or maintain any registration if (i) TCI has
previously filed with the SEC both the Initial Registration Statement
and the Subsequent Registration Statement pursuant to Section 2 of
this Agreement, and each such Registration Statement has become and
has remained effective for the period referred to in Section 4(a)(i),
or (ii) TCI would be required to undergo a special interim audit or to
prepare and file with
-4-
<PAGE>
the SEC sooner than would otherwise be required pro forma or other
financial statements relating to any proposed or probable transaction.
(b) Notwithstanding anything to the contrary in this Agreement,
if at any time TCI is required to file or keep effective a
Registration Statement, TCI will have the option, in lieu of effecting
or maintaining any registration, of purchasing or causing one or more
of its designees to purchase all of the Registrable Shares otherwise
required to be included in such Registration Statement, or in lieu of
including any portion of such Registrable Shares in a Registration
Statement, of purchasing or causing the purchase of such portion of
Registrable Shares, in each case at a price equal to the Market Value
thereof (reduced by an amount per share equal to 50% of brokerage
discounts and commissions (or other items constituting compensation to
the anticipated agent or broker-dealer and 50% of any stock transfer
fees (including the cost of all transfer tax stamps)), if any, upon
such registered offering (i) in the case of Registrable Shares
required to be included in any Registration Statement, on the Closing
Date, or (ii) in the case of Registrable Shares required to be
included in the Subsequent Registration Statement, on the date (which
must be before the second anniversary of the Closing Date) on which
TCI gives Seller notice of the exercise by TCI of its option to
purchase such Registrable Shares. Notice of TCI's election to exercise
its option hereunder will be furnished in writing by TCI to Seller (i)
before the Closing Date, in the case of any Registrable Shares, or
(ii) no later than 10 days prior to the second anniversary of the
Closing Date, in the case of Registrable Shares required to be
included in the Subsequent Registration Statement. Payment for any
Registrable Shares purchased by TCI will be made to Seller in
immediately available funds (i) in the case of Registrable Shares as
to which TCI shall have elected to exercise its option to purchase
before the Closing Date, on the Closing Date or (ii) in the case of
Registrable Shares required to be included in the Subsequent
Registration Statement, on the earlier of the fifth Business Day after
TCI has given notice of its election to exercise its purchase option
or the second anniversary of the Closing Date. Upon any such sale,
Seller will be deemed to have made the same representations and
warranties concerning its title to and ownership of its Registrable
Shares that are being so purchased and such Seller's power and
authority to effect such sale as would customarily be made by a
selling stockholder to an underwriter in an underwriting agreement
with respect to a secondary distribution. Notwithstanding the
foregoing, nothing set forth in this Section 3(b) will prevent Seller
from entering into a so-called "costless collar" transaction (as
described in materials provided by Goldman Sachs to TCI and Seller
entitled "Private Market Hedging/Monetization Strategies") with
respect to the Registrable Shares required to be included in the
Subsequent Registration Statement (including the pledge of such
Registrable Shares as collateral thereunder); provided that such
transaction will in no wat prevent, inhibit or impair TCI's right to
purchase such Registrable Shares pursuant to this Section.
-5-
<PAGE>
4. Obligations with Respect to Registration.
----------------------------------------
(a) If and whenever TCI is obligated by the provisions of this
Agreement to effect the registration of any Registrable Shares under
the Securities Act, TCI will:
(i) subject to Section 4(b), cause the Registration
Statement to remain effective and to prepare and file with the
SEC any amendments and supplements to the Registration Statement
and to the Prospectus as may be necessary to keep the Prospectus
current and in compliance in all material respects with the
provisions of the Securities Act, until (A) in the case of the
Initial Registration Statement, the first to occur of the third
anniversary of the Closing Date and the sale of all the
Registrable Shares covered by such Initial Registration Statement
to a Person other than an Affiliate of Seller and (B) in the case
of the Subsequent Registration Statement, the first to occur of
the first anniversary of the date the Subsequent Registration
Statement becomes effective and the sale of all the Registrable
Shares covered by the Subsequent Registration Statement to a
Person other than an Affiliate of Seller;
(ii) notify Seller (A) when a Registration Statement
becomes effective, (B) when the filing of a post-effective
amendment to a Registration Statement or supplement to the
Prospectus is required, when the same is filed, and in the case
of a post-effective amendment, when the same becomes effective,
(C) of any request by the SEC for any amendment of or supplement
to a Registration Statement or any Prospectus relating thereto or
for additional information and (D) of the entry of any stop order
suspending the effectiveness of such Registration Statement or of
the initiation of any proceedings for that purpose;
(iii) use its reasonable best efforts (A) to prevent the
entry of any stop order affecting the Registration Statement and
(B) to remove any such stop order if entered;
(iv) furnish to Seller conformed copies of the
Registration Statement as declared effective by the SEC and of
each post-effective amendment thereto (in each case including at
least one copy of all exhibits thereto and all documents
incorporated therein), and such number of copies of the final
Prospectus and of each supplement thereto as Seller reasonably
may request to facilitate the distribution of the Registrable
Shares of Seller included in such Registration Statement;
-6-
<PAGE>
(v) register or qualify the Registrable Shares covered
by a Registration Statement under the securities or blue sky laws
of such jurisdictions in the United States as Seller reasonably
requests, and do any and all other acts and things which may be
necessary to enable Seller to consummate the disposition in such
jurisdictions of such Registrable Shares in accordance with a
method of distribution described in such Registration Statement;
provided that TCI will in no event be required to qualify
generally to do business as a foreign corporation or as a dealer
in any jurisdiction where it is not so qualified, to conform its
capitalization or the composition of its assets at the time to
the securities or blue sky laws of such jurisdiction, to execute
or file any general consent to service of process under the laws
of any jurisdiction, to take any action that would subject it to
service of process in suits other than those arising out of the
offer and sale of the Registrable Shares covered by such
Registration Statement or to subject itself to taxation in any
jurisdiction where it has not theretofore done so;
(vi) cause Registrable Shares covered by a Registration
Statement to be listed on the principal exchange or exchanges or
qualified for trading in the principal over-the-counter market on
which the Series A Common Stock is then listed or traded at the
time of the sale of such Registrable Shares pursuant to such
Registration Statement;
(vii) notify Seller, at any time when a Prospectus is
required to be delivered under the Securities Act, when TCI
becomes aware of the happening of any event as a result of which
the Prospectus (as then in effect) contains any untrue statement
of a material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading and, as promptly as
practicable thereafter, prepare and file with the SEC and furnish
a supplement or amendment to such Prospectus so that, as
thereafter delivered to the purchasers of such Registrable
Shares, such Prospectus will not contain any untrue statement of
a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading;
(viii) enter into such agreements with Seller and any
broker-dealer or similar securities industry professional
containing representations, warranties, indemnities and
agreements as are customarily entered into and made by issuers
with respect to secondary distributions under similar
circumstances;
(ix) furnish to the Seller an opinion or opinions of
counsel to TCI and a comfort letter or comfort letters from TCI's
independent public
-7-
<PAGE>
accountants, each in customary form and covering such matters of
the type customarily covered by opinions or comfort letters
delivered by an issuer with respect to secondary distributions;
and
(x) make available to the Seller a consolidated earnings
statement (which need not be audited) satisfying the provisions
of Section 11(a) of the Securities Act beginning within six
months after the effective date of each of the Initial
Registration Statement and the Subsequent Registration Statement,
which statements shall cover said 12-month period, provided
however that TCI shall be deemed to have complied with this
clause (x) if it has complied with Rule 158 promulgated under the
Securities Act.
Seller, upon receipt of any notice from TCI of the happening of
any event of the kind described in Section 4(a)(vii), will forthwith
discontinue disposition of the Registrable Shares until Seller's
receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(a)(vii) or until it is advised in writing
(the "Advice") by TCI that the use of the Prospectus may be resumed
and has received copies of any additional or supplemental filings
which are incorporated by reference in the Prospectus. If so directed
by TCI, Seller will deliver to TCI (at TCI's expense) all copies,
other than permanent file copies then in Seller's possession, of the
Prospectus required to be supplemented or amended. If TCI gives any
such notice, the time periods mentioned in Section 4(a)(i) will be
extended by the number of days during the period from and including
the date of the giving of such notice to and including the date when
Seller received the copies of the supplemented or amended Prospectus
contemplated by Section 4(a)(vii) hereof or the Advice, but such
extension shall not be deemed to relieve TCI from any of its
obligations under Section 4(a)(i) other than as expressly stated
above.
(b) Notwithstanding anything to the contrary in this Agreement,
if at any time after the filing of a Registration Statement or after
it is declared effective by the SEC, TCI determines, in its reasonable
business judgment, that such registration and the offering of
Registrable Shares covered by such registration would interfere with
or otherwise adversely affect any financing, acquisition, corporate
reorganization or other material transaction or development involving
TCI or any of its Affiliates or require TCI to disclose material
matters that otherwise would not be required to be disclosed at such
time, then TCI may require the suspension by Seller of the
distribution of any Registrable Shares for a reasonable period of
time, but not in excess of 15 consecutive Business Days (a "Blackout
Period"), by giving notice to Seller. Any such notice need not specify
the reasons for such suspension if TCI determines, in its reasonable
business judgment, that doing so would interfere with or adversely
affect such transaction or development or would result in the
disclosure of material nonpublic information. In the event that such
notice is given, then until TCI has determined, in its reasonable
business judgment, that such registration and
-8-
<PAGE>
distribution would no longer materially interfere with the matters
described in the preceding sentence and has given notice thereof to
Seller, TCI's obligations under this Section 4 will be suspended, but
in no event longer than 15 Business Days per Blackout Period. No more
than four Blackout Periods may occur, and the number of days included
in all Blackout Periods may not exceed 45 Business Days, in any period
of 12 consecutive calendar months. In the event of a suspension
pursuant to this Section 4(b), then upon notice from TCI that such
suspension is no longer in effect, Seller may recommence distribution
of Registrable Shares. TCI will give notice to Seller of the
commencement and the termination of any Blackout Period. Each Blackout
Period will begin and end when the applicable notice is given (unless
it earlier terminates pursuant to the terms hereof). The time periods
mentioned in Section 4(a)(i) will be extended by the number of days
included in all Blackout Periods during which the distribution by
Seller under an applicable Registration Statement has been suspended,
but such extension shall not be deemed to relieve TCI from any of its
obligations under Section 4(a)(i) other than as expressly stated in
this clause (b) and clause (a) above.
(c) TCI's obligations under this Agreement to Seller will be
conditioned on Seller's compliance with the following:
(i) Seller will cooperate with TCI in connection with the
preparation of the Registration Statement, and for so long as TCI
is obligated to keep the Registration Statement effective, Seller
will provide to TCI, in writing, for use in the Registration
Statement, all information regarding Seller and such other
information as may be necessary to enable TCI to prepare the
Registration and Prospectus covering the Registrable Shares and
to maintain the currency and effectiveness thereof;
(ii) Seller will permit TCI, its representatives and
agents to examine such documents and records and will supply any
information as they may reasonably request in connection with the
offering or other distribution in which Seller proposes to
participate;
(iii) Seller will enter into such agreements with TCI and
any broker-dealer or similar securities industry professional
containing representations, warranties, indemnities and
agreements as are customarily entered into and made by a seller
of securities with respect to secondary distributions under
similar circumstances, and Seller will use its reasonable best
efforts to cause its counsel to give any legal opinions
customarily given, in connection with secondary distributions
under similar circumstances;
(iv) during such time as Seller may be engaged in a
distribution of the Registrable Shares, Seller will comply with
all applicable laws, including
-9-
<PAGE>
Rules l0b-6 and l0b-7 promulgated under the Exchange Act, and, to
the extent required by such laws, will, among other things: (A)
not engage in any stabilization activity in connection with the
securities of TCI in contravention of such rules; (B) distribute
the Registrable Shares owned by Seller solely in the manner
described in the Registration Statement or as otherwise permitted
by law; (C) cause to be furnished to each agent or broker-dealer
to or through whom the Registrable Shares owned by Seller may be
offered, or to the offeree if an offer is made directly by
Seller, such copies of the Prospectus (as amended and
supplemented to such date) and documents incorporated by
reference therein as may be required by such agent, broker-dealer
or offeree, provided that TCI shall have provided Seller with an
adequate number of copies thereof; and (D) not bid for or
purchase any securities of TCI or attempt to induce any Person to
purchase any securities of TCI;
(v) at least five days prior to any distribution of
Registrable Shares, Seller is expected to advise TCI in writing
of the dates on which the distribution is expected to commence
and terminate, the number of Registrable Shares expected to be
sold and the number of shares of Series A Common Stock that it
expects will be owned beneficially by Seller after giving effect
to such sale; and
(vi) on notice from TCI of the happening of any of the
events specified in clauses (B), (C) or (D) of Section 4(a)(ii),
or that, as set forth in Section 4(b), it requires the suspension
by Seller of the distribution of any of the Registrable Shares,
then Seller will cease offering or distributing the Registrable
Shares until TCI notifies Seller that offering and distribution
of the Registrable Shares may recommence.
5. Expenses of Registration.
------------------------
All expenses in connection with any Registration Statement, any
qualification or compliance with federal or state laws required in connection
therewith, and the distribution of the Registrable Shares will, as between
Seller and TCI, be borne as follows:
(a) Except as provided in Section 5(b), TCI will pay all
expenses incident to its performance of or compliance with this
Agreement, including, without limitation, all SEC and National
Association of Securities Dealers, Inc. registration and filing fees,
all Nasdaq national market registration and filing fees, fees and
expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Shares), printing expenses,
messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and
-10-
<PAGE>
employees performing legal or accounting duties), and fees and
disbursements of counsel for TCI and its independent certified public
accountants (including the expenses of any special audit or "cold
comfort" letters required by or incident to such performance),
securities acts liability insurance (if TCI elects to obtain such
insurance), the fees and expenses of any special experts retained by
TCI in connection with such registration and fees and expenses of
other Persons retained by TCI.
(b) Seller will pay all fees and disbursements of its counsel
and advisers, all stock transfer fees (including the cost of all
transfer tax stamps) or expenses, if any, and all other expenses
(including brokerage discounts, commissions and fees) related to the
distribution of the Shares.
6. Indemnification.
---------------
(a) TCI will indemnify and hold harmless Seller, its directors
and officers, and each Person (if any) who controls Seller within the
meaning of either the Securities Act or the Exchange Act and any agent
or investment advisor thereof (collectively, the "Seller Indemnified
Parties") from and against all losses, claims, damages or liabilities
(collectively "Losses"), joint or several, to which the Seller
Indemnified Parties become subject, insofar as such Losses (or actions
in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus, or any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and,
subject to Section 6(c), TCI will reimburse the Seller Indemnified
Parties for any reasonable legal or other expenses reasonably incurred
by them in connection with investigating or defending any such Losses;
provided that TCI will not indemnify or hold harmless any Seller
Indemnified Party from or against any such Losses to the extent that
such Losses (i) arise out of or are based on any violation of any
federal or state securities laws, rules or regulations committed by
any of the Seller Indemnified Parties (or any Person who controls any
of them or any agent or broker-dealer engaged by them) or any failure
by Seller to give any purchaser of Registrable Shares, at or prior to
the written confirmation of such sale, a copy of the most recent
Prospectus, provided that TCI has provided Seller with an adequate
number of copies thereof or (ii) occur as a result of a material
untrue statement or omission, provided that the untrue statement or
omission or allegation thereof upon which such Losses are based (x)
was made in reliance on and in conformity with written information
provided by or on behalf of any Seller Indemnified Party specifically
for use or inclusion in the Registration Statement or any Prospectus,
(y) was made in any Prospectus used by Seller after such time as TCI
advised Seller that the filing of a post effective amendment or
supplement thereto was required or (z) was made in any Prospectus used
by Seller
-11-
<PAGE>
after such time as the obligation of TCI hereunder to keep the
Registration Statement effective and current has expired or been
suspended hereunder.
(b) Seller will indemnify and hold harmless TCI, its directors
and officers and each Person, if any, who controls TCI within the
meaning of either the Securities Act or the Exchange Act (the "TCI
Indemnified Parties"), from and against any Losses, joint or several,
to which TCI Indemnified Parties may become subject, insofar as such
Losses (or actions in respect thereof) arise out of or are based on
(i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus, or any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
if the statement or omission was made in reliance on and in conformity
with the written information provided by or on behalf of Seller or any
Person who controls Seller specifically for use or inclusion in the
Registration Statement or any Prospectus, (ii) the use by Seller of
any Prospectus after such time as TCI has notified Seller in writing
that the filing of a post-effective amendment or supplement thereto is
required, except the Prospectus as so amended or supplemented, (iii)
the use by Seller of any Prospectus after such time as the obligation
of TCI hereunder to keep the Registration Statement effective and
current has expired or been suspended hereunder or (iv) any violation
by Seller or any Person who controls Seller within the meaning of
either the Securities Act or the Exchange Act (or any agent or broker-
dealer engaged by Seller or any such controlling Person) of any
federal or state securities law or rule or regulation thereunder or
any failure by Seller to give any purchaser of Registrable Shares at
or prior to the written confirmation of such sale, a copy of the
Prospectus as then in effect, provided that TCI has provided Seller
with an adequate number of copies thereof. For purposes of clause (i)
of the preceding sentence and clause (ii) of the last sentence of
Section 6(a), but without limiting the generality thereof, any
information concerning any Seller Indemnified Party or plan of
distribution included in any Registration Statement or Prospectus
which is provided to Seller for review by Seller (or its counsel) at
least five Business Days before filing or use thereof and to which
Seller has not promptly provided written notice of objection to TCI
will be deemed to be written information provided by Seller
specifically for use in such Registration Statement or Prospectus. In
no event will the liability of Seller hereunder be greater in amount
than the dollar amount of the proceeds received by Seller upon the
sale of the Registrable Shares giving rise to such indemnification
obligation.
(c) The party seeking indemnification pursuant to this Section 6
is referred to as the "Indemnified Party" and the party from whom
indemnification is sought under this Section 6 is referred to as the
"Indemnifying Party." The Indemnified Party will give prompt written
notice to the Indemnifying Party of any claim for indemnification
under Section 6(a) and 6(b) relating to a claim or demand
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of a third party (an "Action") with respect to which it is seeking
indemnification hereunder. The failure to give such prompt notice will
not relieve the Indemnifying Party of its indemnity obligations
hereunder with respect thereto, except to the extent that the
Indemnifying Party is materially prejudiced by such failure. The
Indemnifying Party will have the right to defend and to direct the
defense against such Action, in its name or in the name of the
Indemnified Party, as the case may be, at the expense of the
Indemnifying Party, and with the counsel selected by the Indemnifying
Party and reasonably satisfactory to the Indemnified Party, provided
that (i) the Indemnifying Party, within a reasonable period of time
after the giving of notice of such indemnification claim by the
Indemnified Party, notifies the Indemnified Party of its intention to
assume that defense, which notice acknowledges the Indemnifying
Party's obligation to initially pay any loss, cost or expense of the
Indemnified Party incurred in connection therewith, as provided
hereunder (but which shall not be deemed an admission of liability to
indemnify the Indemnified Party under Section 6(a) or 6(b) hereof, as
applicable), and (ii) the Indemnifying Party may not settle or
compromise any such Action without the consent of the Indemnified
Party (which consent may not be unreasonably withheld) if (A) such
settlement or compromise does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the Indemnified
Party of a release from all liability with respect to such Action or
(B) injunctive or other equitable relief would be imposed against the
Indemnified Party as a result thereof. If the Indemnifying Party so
assumes the defense of any such Action (i) the Indemnifying Party will
pay all costs associated with, any damages awarded in, and expenses
arising from the settlement of such Action but, to the extent the
Indemnifying Party believes that the Indemnified Party was not
entitled to indemnification of such costs, expenses and damages
pursuant to Section 6(a) or 6(b), as applicable, notwithstanding its
having assumed the defense of such Action, the Indemnifying Party will
be entitled to bring suit against the Indemnified Party to recover
such costs and damages after final determination thereof, and (ii) the
Indemnified Party will have the right to employ separate counsel and
to participate in (but not control) the defense, compromise or
settlement of the Action, but the fees and expenses of such counsel
will be at the expense of the Indemnified Party unless (A) the
Indemnifying Party has agreed to pay such fees and expenses or (B) the
Indemnified Party has been advised by its counsel that there are
likely to be one or more defenses available to it which are different
from or additional to those available to the Indemnifying Party, and
in any such case that portion of the reasonable fees and expenses of
such separate counsel that are reasonably related to matters covered
by the indemnity provided in this Section 6 will be paid by the
Indemnifying Party. If the Indemnifying Party does not so assume the
defense of any Action, the Indemnified Party will be entitled to
exercise control of the defense, compromise or settlement of the
Action. No Indemnified Party will settle or compromise any such Action
for which it is entitled to indemnification under this Agreement
without the prior written consent of the Indemnifying Party (which
consent may not be unreasonably withheld). The other
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party will cooperate with the party assuming the defense, compromise
or settlement of any Action in accordance with this Agreement in any
manner that such party reasonably may request and the party assuming
the defense, compromise or settlement of any Action will keep the
other party fully informed in the defense of such Action.
(d) If the indemnification provided for in this Section 6 is
unavailable or is insufficient to hold the Indemnified Party harmless
under subparagraphs (a) or (b) above with respect to any Losses
referred to therein for any reason other than as specified therein,
then the Indemnifying Party will contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and such Indemnified Party on the
other in connection with the actions, statements or omissions which
resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party will be determined by reference to, among other
things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact has been made or relates to
information supplied by (or omitted to be supplied by), TCI or Seller,
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission.
The amount paid or payable by an Indemnified Party as a result of the
Losses referred to above in this subsection (d) will be deemed to
include any reasonable legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending
any such action or claim.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section
6(d), Seller will not be required to contribute any amount in excess
of the amount by which the net proceeds received by Seller from the
Registrable Shares of Seller that were offered to the public exceed
the amount of any damages which Seller has otherwise been required to
pay by reason of such untrue statement or omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 6, the
Indemnifying Party will indemnify the Indemnified Party to the full
extent provided in Section 6(a) and Section 6(b) without regard to the
relative fault of the Indemnifying Party or Indemnified Party or any
other equitable consideration provided for in this Section 6(d).
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(e) The provisions of this Section 6 will be in addition to any
other rights to indemnification or contribution which an Indemnified
Party may have pursuant to law, equity, contract or otherwise.
(f) The payments required by this Section 6 will be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
7. Remedies. In addition to being entitled to exercise all rights
--------
granted by law, including recovery of damages, Seller will be entitled to
specific performance of its rights under this Agreement. TCI agrees that
monetary damages will not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
8. Attorneys' Fees. If any action or suit based upon or arising out
---------------
of any alleged breach by any party of any covenant or agreement contained in
this Agreement, the prevailing party will be entitled to recover reasonable
attorneys' fees and other costs of such action or suit from the other party.
9. Rule 144. TCI will use its reasonable best efforts to file the
--------
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder (or, if TCI is not
required to file such reports, TCI will, upon the request of Seller, use its
reasonable best efforts to make publicly available other information) and will
take such further action as Seller may reasonably request, in each case to the
extent required from time to time to enable Seller to sell Registrable Shares
without registration under the Securities Act within the limitations of the
exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon request of any Holder of Registrable Securities, TCI
will deliver a written statement as to whether it has complied with such
requirements and will, at its expense, promptly after receipt of a written
request of the Seller, deliver to the Seller a certificate, signed by a duly
authorized management employee of TCI, stating (a) TCI's name, address and
telephone number (including area code), (b) TCI's Internal Revenue Service
identification number, (c) TCI's SEC file number, (d) the number of shares of
each class of capital stock outstanding as shown by the most recent report or
statement published by TCI, and (e) whether TCI has filed the reports required
to be filed under the Exchange Act for a period of at least ninety (90) days
prior to the date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.
10. Severability. If any one or more of the provisions of this
------------
Agreement are held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions of this Agreement will
not be affected thereby. To the extent permitted by applicable law, each party
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
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11. Further Assurances. Subject to the specific terms of this
------------------
Agreement, Seller and TCI will make, execute, acknowledge and deliver such other
instruments and documents, and take all other actions, as reasonably may be
required to effectuate the purposes of this Agreement and to consummate the
transactions contemplated hereby.
12. Notices. All notices, requests, consents, demands, waivers,
-------
instructions and other communications hereunder will be in writing and will be
deemed to have been duly given if delivered personally or mailed, certified or
registered mail with postage prepaid, or sent by telex, telegram or telecopier,
as follows:
(a) if to TCI:
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
Attention: Stephen M. Brett, Esq.
Facsimile: (303) 488-3245
(b) if to Seller:
Knight-Ridder Cablevision, Inc.
One Herald Plaza
Miami, Florida 33101
Attention:
Facsimile:
or to such other Person or address as any party may specify by notice in writing
to the other party. All notices and other communications given to a party in
accordance with the provisions of this Agreement will be deemed to have been
given (i) three Business Days after the same are sent by certified or registered
mail, postage prepaid, return receipt requested, (ii) when delivered by hand or
transmitted by telecopy (answer back received) or (iii) one Business Day after
the same are sent by a reliable overnight courier service, with acknowledgment
of receipt requested. Notwithstanding the preceding sentence, notice of change
of address will be effective only upon actual receipt thereof.
13. Amendment. Any provision of this Agreement may be amended or
---------
modified in whole or in part at any time by an agreement in writing between TCI
and Seller, executed in the same manner as this Agreement. No consent, waiver or
similar act will be effective unless in writing.
14. Entire Agreement. This Agreement and the Purchase Agreement
----------------
constitute the entire agreement among the parties hereto and supersedes all
prior agreements and understandings, oral and written, among the parties hereto
with respect to the subject matter hereof.
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15. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same agreement.
16. Governing Law. This Agreement will be governed by and
-------------
interpreted in accordance with the internal laws of the State of Delaware,
without giving effect to principles of conflicts of laws.
17. Assignment. Seller may assign any of its rights under this
----------
Agreement in whole or in part to any of its Affiliates to which Seller transfers
any of the Registrable Shares, without the prior written consent of TCI. Subject
to the foregoing, (i) neither party may assign its rights under this Agreement
without the prior written consent of the other party and (ii) this Agreement
will be binding on and inure to the benefit of, the parties and their respective
successors and assigns.
TELE-COMMUNICATIONS, INC.
By: /s/ John C. Malone
----------------------------------------------
Its: Chief Executive Officer and President
---------------------------------------------
KNIGHT-RIDDER CABLEVISION, INC.
By: /s/ Ross Jones
----------------------------------------------
Name: Ross Jones
--------------------------------------------
Title: President
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EXHIBIT A
The Registrable Shares may be sold by Seller directly or through
agents designated from time to time or to or through broker-dealers designated
from time to time. To the extent required, any such agent or broker-dealer
involved in the offer and sale of the Registrable Shares and any applicable
commissions, discounts or other items constituting compensation to such agents
or broker-dealers will be set forth in a Prospectus Supplement.
The distribution of the Registrable Shares may be effected from time
to time in one or more 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. Registrable Shares may be sold through a broker-dealer
acting as agent or broker for Seller, or to a broker-dealer acting as principal.
In the latter case, the broker-dealer may then resell such Registrable Shares to
the public at varying prices to be determined by such broker-dealer at the time
of resale.
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