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FILED PURSUANT TO
RULE NO. 424(b)(3)
REGISTRATION NO. 33-65479
PROSPECTUS
Tele-Communications, Inc.
Tele-Communications, Inc. Series A TCI Group Common Stock ($1.00 par value)
Tele-Communications, Inc. Series A Liberty Media Group Common Stock
($1.00 par value)
This Prospectus relates to (i) 193,937 shares (the "TCI Group Shares") of
the Tele-Communications, Inc. Series A TCI Group Common Stock, par value $1.00
per share (the "TCI Group Series A Common Stock"), of Tele-Communications, Inc.,
a Delaware corporation (the "Company" or "TCI"), and (ii) 101,398 shares (the
"Liberty Group Shares" and collectively with the TCI Group Shares, the "Shares")
of Tele-Communications, Inc. Series A Liberty Media Group Common Stock, par
value $1.00 per share (the "LMG Series A Common Stock"), of the Company, to be
offered and sold from time to time by the holders thereof (the "Selling
Stockholders"). See "Selling Stockholders."
On August 3, 1995, the Company's Restated Certificate of Incorporation was
amended to, among other things, (i) redesignate the Company's Class A Common
Stock, par value $1.00 per share ("Class A Common Stock"), as TCI Group Series A
Common Stock and the Company's Class B Common Stock, par value $1.00 per share,
as Tele-Communications, Inc. Series B TCI Group Common Stock, par value $1.00
per share (the "TCI Group Series B Common Stock" and, together with the TCI
Group Series A Common Stock, the "TCI Group Common Stock"), and (ii) authorize
two additional series of the Company's common stock, designated as LMG Series A
Common Stock and the Tele-Communications, Inc. Series B Liberty Media Group
Common Stock, par value $1.00 per share (the "LMG Series B Common Stock" and,
together with the LMG Series A Common Stock, the "Liberty Media Group Common
Stock"). Thereafter, the Company distributed to holders of TCI Group Common
Stock one-fourth of a share of the corresponding series of Liberty Media Group
Common Stock in respect of each share of TCI Group Common Stock held of record
as of August 4, 1995, the record date for the distribution.
Both series of TCI Group Common Stock are identical in all respects, except
(i) each share of TCI Group Series B Common Stock has ten votes and each share
of TCI Group Series A Common Stock has one vote and (ii) each share of TCI Group
Series B Common Stock is convertible, at the option of the holder, into one
share of TCI Group Series A Common Stock. Similarly, both series of Liberty
Media Group Common Stock are identical in all respects, except (i) each share of
LMG Series B Common Stock has ten votes and each share of LMG Series A Common
Stock has one vote and (ii) each share of LMG Series B Common Stock is
convertible, at the option of the holder, into one share of LMG Series A Common
Stock. The shares of TCI Group Series A Common Stock and LMG Series A Common
Stock are not convertible into shares of TCI Group Series B Common Stock and LMG
Series B Common Stock, respectively.
Shares of the TCI Group Series A Common Stock, the TCI Group Series B
Common Stock, the LMG Series A Common Stock, and the LMG Series B Common Stock
are traded on the Nasdaq National Market under the symbols "TCOMA", "TCOMB",
"LBTYA" and "LBTYB", respectively.
(Continued)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January 22, 1996.
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Each of the TCI Group Shares and the Liberty Group Shares may be offered
for sale and sold by the Selling Stockholders from time to time in varying
amounts, including in block transactions, on the Nasdaq National Market at then
prevailing prices or in private transactions at prices and on terms to be
determined at the time of sale. The Shares may be sold by the Selling
Stockholders directly, through an underwritten offering, through agents
designated from time to time or to or through broker-dealers designated from
time to time. To the extent required, the number and series of Shares to be
sold, the name of the Selling Stockholders, the purchase price, the public
offering price, if applicable, the name of any such agent or broker-dealer, and
any applicable commissions, discounts or other items constituting compensation
to such underwriters, agents or broker-dealers with respect to a particular
offering will be set forth in a supplement or supplements to this Prospectus
(each, a "Prospectus Supplement"). The aggregate proceeds to the Selling
Stockholders from the sale of the Shares so offered will be the purchase price
of the Shares sold less (i) the aggregate commissions, discounts and other
compensation, if any, paid by the Selling Stockholders to underwriters, agents
or broker-dealers and (ii) certain other expenses of the offering and sale of
the Shares that will be the responsibility of the Selling Stockholders. See
"Selling Stockholders". The Selling Stockholders may also sell all or a portion
of the Shares pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), to the extent that such sales may be made in
compliance with such Rule. See "Plan of Distribution". The Company will not
receive any proceeds from the sale of the Shares. The Company knows of no
selling arrangement between any underwriter, agent or broker-dealer and the
Selling Stockholders.
The Selling Stockholders and any broker-dealers or agents that participate
with the Selling Stockholders in the distribution of any of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
discount or commission received by them and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all
amendments and exhibits, referred to as the "Registration Statement") under
the Securities Act, with respect to the Shares. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the
Shares and the Company, reference is made to the Registration Statement.
Statements contained herein or in any document incorporated herein by
reference concerning the provisions of any contract or other document are not
necessarily complete and, in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or such other document. Each such statement is qualified in its
entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Commission.
Reports, proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; Suite 1400, 500 West Madison Street, Chicago, Illinois 60661;
and at Suite 1300, 7 World Trade Center, New York, New York 10048; and copies
of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company hereby incorporates in this Prospectus by reference the
following documents filed with the Commission (File No. 0-20421): (i) the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, as
amended by Form 10-K/A (Amendment No. 1), (ii) the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995, (as amended by Form 10-Q/A (Amendment No. 1)), (iii) the
Company's Current Reports on Form 8-K, dated January 23, 1995, February 3,
1995 (as amended by Form 8-K/A), February 13, 1995, February 15, 1995, April
6, 1995, April 20, 1995 (as amended by Form 8-K/A), May 4, 1995 (as amended
by Form 8-K/A), July 26, 1995, August 10, 1995 and December 18, 1995, and
(iv) the financial statements and notes thereto of TeleCable Corporation as
of December 31, 1993 and 1992 and for each of the two years in the period
ended December 31, 1993, included in the Company's Current Report on Form 8-
K, dated August 26, 1994.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof
and prior to the termination of the offering of the Shares described in this
Prospectus shall be deemed to be incorporated herein by reference and to be a
part hereof from the respective dates of the filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein, other
than certain exhibits to such documents (unless such exhibits are
specifically incorporated by reference into the documents that this
Prospectus incorporates). Such requests should be addressed to Stephen M.
Brett, Esq., Executive Vice President and General Counsel, Tele-
Communications, Inc., Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado
80111-3000; telephone (303) 267-5500.
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THE COMPANY
The Company, through its subsidiaries and affiliates, is principally
engaged in the construction, acquisition, ownership and operation of cable
television systems and the provision of satellite-delivered video
entertainment, information and home shopping programming services to various
video distribution media, principally cable television systems. The Company
believes that, measured by the number of basic subscribers, it is the largest
provider of cable television services in the United States. The Company also
(i) has investments in cable and telecommunications operations and television
programming in certain international markets and (ii) is involved, as an
investor and developer, in new television and telecommunications ventures and
technologies. The Company is a Delaware corporation and its principal
executive offices are located at Terrace Tower II, 5619 DTC Parkway,
Englewood, Colorado 80111-3000; telephone (303) 267-5500.
SELLING STOCKHOLDERS
The Selling Stockholders are JAKL, Inc., a District of Columbia
corporation wholly owned by James Lehrer, Neely Productions Limited, a New
York corporation wholly owned by Robert MacNeil, and the William Morris
Agency, Inc., a New York corporation. All of the TCI Group Shares being
offered hereby were initially acquired as shares of Class A Common Stock
(prior to the redesignation of such shares into shares of Series A TCI Group
Common Stock) by the Selling Stockholders on January 4, 1995 in connection
with the acquisition (the "Acquisition") by a wholly-owned subsidiary of the
Company of a 66-2/3% general partnership interest in MacNeil Lehrer
Productions ("MLP"), a general partnership principally engaged in the
development and production of the "MacNeil Lehrer News Hour." In the
Acquisition, JAKL, Inc. and Neely Productions Limited, the general partners
of MLP, each received 211,657 shares of Class A Common Stock in consideration
for the sale of a portion of their partnership interest in MLP and the
William Morris Agency, Inc. received 22,280 shares of Class A Common Stock in
consideration for its services rendered to MLP in connection with the
Acquisition.
All of the Liberty Group Shares were acquired by the Selling
Stockholders in connection with the Company's distribution to the holders of
record of TCI Group Common Stock on August 4, 1995 (the record date for such
distribution), of one-fourth of a share of the corresponding series of
Liberty Media Group Common Stock in respect of each share of TCI Group Common
Stock held as of such record date.
The Shares held by the Selling Stockholders constitute restricted
securities and cannot be transferred unless they are registered under the
Securities Act or an exemption from registration is available. The Selling
Stockholders were, however, given the right to require the Company, subject
to certain limitations, to register such shares for resale under the
Securities Act and to include such shares in certain types of registration
statements proposed to be filed by the Company. In response to a request by
the Selling Stockholders, the Company has filed 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 Stockholders and has agreed 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 such time as all of the Shares offered hereby have been
sold or the second anniversary of June 27, 1995. The Selling Stockholders
may also sell all or a portion of the Shares being offered hereby pursuant
to Rule 144 promulgated under the Securities Act ("Rule 144") to the extent
that such sales may be made in compliance with Rule 144.
The following table sets forth the name of each Selling Stockholder, the
number of Shares beneficially owned as of January 22, 1996 by each Selling
Stockholder (in each case, less than 1% of the class outstanding) and the
number of Shares which may be offered by each Selling Stockholder pursuant to
this Prospectus. Any or all of the Shares listed below may be offered for
sale by the Selling Stockholders from time to time and therefore no estimate
can be given as to the number of Shares that will be held by the Selling
Stockholders upon termination of this offering (except that in each case,
such number will represent less than 1% of the class outstanding). Except as
discussed above, neither the Company nor any of its affiliates has had within
the past three years any material relationship with any
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of the Selling Stockholders, except that JAKL, Inc. and Neely Productions
Limited are general partners with a subsidiary of the Company in MLP.
<TABLE>
<CAPTION>
SHARES OF TCI GROUP SHARES OF LMG SERIES A
SERIES A COMMON STOCK COMMON STOCK
NAME OF SELLING BENEFICIAL TO BE BENEFICIAL TO BE
STOCKHOLDER OWNERSHIP OFFERED OWNERSHIP OFFERED
- ---------------------------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C>
JAKL, Inc. 171,657 171,657 42,914 42,914
Neely Productions Limited 0 0 46,664 46,664
William Morris Agency, Inc. 22,280 22,280 5,570 5,570
</TABLE>
PLAN OF DISTRIBUTION
The Shares may be offered for sale and sold by the Selling Stockholders in
one or more transactions, including block transactions, at a fixed price or
prices (which may be changed), at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at prices
determined on a negotiated or competitive bid basis. The Shares may be sold
by the Selling Stockholders directly, through an underwritten offering,
through agents designated from time to time or to or through broker-dealers
designated from time to time.
If any Shares are sold in an underwritten offering, such Shares may be
acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale. Unless otherwise indicated in the applicable Prospectus Supplement,
the obligations of any underwriters to purchase Shares will be subject to
certain conditions precedent, and the underwriters will be obligated to
purchase all of the Shares specified in such Prospectus Supplement if any are
purchased.
Shares may be sold through a broker-dealer acting as agent or broker for
the Selling Stockholders, or to a broker-dealer acting as principal. In the
latter case, the broker-dealer may then resell such Shares to the public at
varying prices to be determined by such broker-dealer at the time of resale.
The Company has been advised by the Selling Stockholders that they have
not, as of the date of this Prospectus, entered into any arrangement with an
underwriter, agent or broker-dealer for the sale of the Shares.
The Selling Stockholders may also sell all or a portion of the Shares
pursuant to Rule 144 promulgated under the Securities Act, to the extent that
such sales may be made in compliance with such Rule.
The Selling Stockholders and any agents or broker-dealers that participate
with the Selling Stockholders in the distribution of any of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
discount or commission received by them and any profit on the resale of the
Shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
The Company has agreed to indemnify the Selling Stockholders 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 Stockholders may be required to make in respect
thereof.
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To the extent required, the number of Shares to be sold, the purchase
price, the public offering price, if applicable, the name of any underwriter,
agent or broker-dealer, and any applicable commissions, discounts or other
items constituting compensation to such underwriters, agents or broker-
dealers with respect to a particular offering will be set forth in an
accompanying Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The following description of certain terms of the common stock of TCI does
not purport to be complete and is qualified in its entirety by reference to
the Restated Certificate of Incorporation, as amended, of TCI (the "TCI
Charter") which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part.
GENERAL
The TCI Charter provides, among other things, that TCI is authorized to
issue 2,725,000,000 shares of common stock, par value $1.00 per share (the
"TCI Common Stock"), of which 1,750,000,000 shares are designated Tele-
Communications, Inc. Series A TCI Group Common Stock, 150,000,000 shares are
designated Tele-Communications, Inc. Series B TCI Group Common Stock,
750,000,000 shares are designated Tele-Communications, Inc. Series A Liberty
Media Group Common Stock, and 75,000,000 shares are designated Tele-
Communications, Inc. Series B Liberty Media Group Common Stock.
As of November 1, 1995, 571,576,645 shares of TCI Group Series A Common
Stock, 84,801,554 shares of TCI Group Series B Common Stock, 142,892,796
shares of LMG Series A Common Stock and 21,200,336 shares of LMG Series B
Common Stock (in each case net of shares held in treasury) have been issued
and are outstanding.
CERTAIN DEFINITIONS
As used herein, the following terms have the meanings specified below:
"Committed Acquisition Shares" means (a) the shares of LMG Series A
Common Stock that TCI had, prior to the record date for the Distribution,
agreed to issue, but as of such record date had not issued, and (b) the
shares of LMG Series A Common Stock that are issuable upon conversion,
exercise or exchange of Convertible Securities that TCI had, prior to the
record date for the Distribution, agreed to issue, but as of such record date
had not issued, in each case including obligations of TCI to issue shares of
TCI's Class A Common Stock, par value $1.00 per share (which has been
redesignated TCI Group Series A Common Stock), which as a result of the
Distribution, constitute obligations to issue, among other securities, LMG
Series A Common Stock or Convertible Securities which are convertible into or
exercisable or exchangeable for LMG Series A Common Stock; provided, however
that Committed Acquisition Shares will not include any shares of Liberty
Media Group Common Stock issuable upon conversion, exercise or exchange of
Pre-Distribution Convertible Securities. The type and amount of Committed
Acquisition Shares issuable will be appropriately adjusted to reflect
subdivisions and combinations of the LMG Series A Common Stock and dividends
or distributions of shares of LMG Series A Common Stock or LMG Series B
Common Stock to holders of LMG Series A Common Stock and other
reclassifications of the LMG Series A Common Stock, in each case occurring
(or the record date for which occurs) after the Distribution.
"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.
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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 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
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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
(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
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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 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
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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 of TCI's preferred stock or any series of such a
class, in the TCI Charter (including any resolution or resolutions providing
for the establishment of such class or series pursuant to authority vested in
the TCI Board of Directors by the TCI Charter), the holders of TCI Group
Common Stock and the holders of Liberty Media Group Common Stock and the
holders of each class or series of TCI's preferred stock, if any, entitled to
vote thereon will vote as one class for all purposes. See "--Other Matters."
Neither the holders of TCI Group Series A Common Stock or TCI Group
Series B Common Stock, nor the holders of LMG Series A Common Stock or LMG
Series B Common Stock, have any rights to vote as a separate class or series
on any matter coming before the stockholders of TCI, except with respect to
certain limited class and series voting rights provided under the DGCL.
Under the DGCL, the approval of the holders of a majority of the outstanding
shares of any class of capital stock of a corporation, voting separately as a
class, is required to approve any amendment to the charter that would alter
or change the powers, preferences or special rights of the shares of such
class so as to affect them adversely, provided that, if any amendment would
alter or change the powers, preferences or special rights of one or more
series of the class so as to affect them adversely, but would not so affect
the entire class, then only the shares of the series so affected by the
amendment would be entitled to vote thereon separately as a class.
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DIVIDENDS
Subject to the prior payment of dividends on outstanding shares of TCI's
preferred stock, dividends may be paid as determined by the TCI Board of
Directors (i) on the TCI Group Common Stock out of the lesser of (x) the TCI
Group Available Dividend Amount and (y) funds of TCI legally available
therefor under the DGCL and (ii) on the Liberty Media Group Common Stock out
of the lesser of (x) the Liberty Media Group Available Dividend Amount and
(y) funds of TCI legally available therefor under the DGCL. Under the DGCL
the amount of the funds of TCI legally available for the payment of dividends
on any series of TCI Common Stock is determined on the basis of the entire
corporation and not just the Liberty Media Group or the TCI Group.
Consequently, the amount of legally available funds will be reduced by the
amount of any net losses of the Liberty Media Group or the TCI Group and any
dividends or distributions on, or repurchases of, the TCI Group Common Stock
or the Liberty Media Group Common Stock and dividends on, or certain
repurchases of, TCI's preferred stock. Certain loan agreements to which
certain subsidiaries of TCI are parties or are subject contain restricted
payment provisions that limit the amount of dividends, other than stock
dividends, that those companies may pay. Future loan agreements may also
contain similar restrictions and limits.
The "TCI Group Available Dividend Amount," as of any date, means either
(a) the excess of (i) an amount equal to the total assets of the TCI Group
less the total liabilities (not including preferred stock) of the TCI Group
as of such date over (ii) the aggregate par value of, or any greater amount
determined to be capital in respect of, all outstanding shares of TCI Group
Common Stock and each class or series of TCI's preferred stock attributed to
the TCI Group or (b) in case there is no such excess, an amount equal to TCI
Earnings (Loss) Attributable to the TCI Group (if positive) for the fiscal
year in which such date occurs and/or the preceding fiscal year. "TCI
Earnings (Loss) Attributable to the TCI Group," for any period, means the net
earnings or loss of the TCI Group for such period determined on a basis
consistent with the determination of the net earnings or loss of the TCI
Group for such period as presented in the combined financial statements of
the TCI Group for such period, including income and expenses of TCI
attributed to the operations of the TCI Group on a substantially consistent
basis, including without limitation, corporate administrative costs, net
interest and income taxes. The TCI Group Available Dividend Amount is
intended to be similar to the amount that would be legally available for the
payment of dividends on the TCI Group Common Stock under the DGCL if the TCI
Group were a separate Delaware corporation. There can be no assurance that
there will be a TCI Group Available Dividend Amount.
The "Liberty Media Group Available Dividend Amount," as of any date,
means the product of the Outstanding Interest Fraction and either (a) the
excess of (i) an amount equal to the total assets of the Liberty Media Group
less the total liabilities (not including preferred stock) of the Liberty
Media Group as of such date over (ii) the aggregate par value of, or any
greater amount determined to be capital in respect of, all outstanding shares
of Liberty Media Group Common Stock and each class or series of TCI's
preferred stock attributed to the Liberty Media Group or (b) in case there is
no such excess, an amount equal to TCI Earnings (Loss) Attributable to the
Liberty Media Group (if positive) for the fiscal year in which such date
occurs and/or the preceding fiscal year. "TCI Earnings (Loss) Attributable
to the Liberty Media Group," for any period, means the net earnings or loss
of the Liberty Media Group for such period determined on a basis consistent
with the determination of the net earnings or loss of the Liberty Media Group
for such period as presented in the combined financial statements of the
Liberty Media Group for such period, including income and expenses of TCI
attributed to the operations of the Liberty Media Group on a substantially
consistent basis, including, without limitation, corporate administrative
costs, net interest and income taxes. The Liberty Media Group Available
Dividend Amount is intended to be similar to the amount that would be legally
available for the payment of dividends on the Liberty Media Group Common
Stock under the DGCL if the Liberty Media Group were a separate Delaware
corporation. There can be no assurance that there will be a Liberty Media
Group Available Dividend Amount.
Except for dividends declared or paid as described below under "--Share
Distributions" and "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock," any dividends
paid on the TCI Group Series A Common Stock or the TCI Group Series
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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, any other securities of TCI or any other person (a "share
distribution") is to be made with respect to the TCI Group Common Stock, such
share distribution will be declared and paid only as follows:
(i) a share distribution consisting of shares of TCI Group Series A
Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of TCI Group Series A Common
Stock) to holders of TCI Group Series A Common Stock and TCI Group
Series B Common Stock, on an equal per share basis; or consisting
of shares of TCI Group Series B Common Stock (or Convertible
Securities convertible into or exercisable or exchangeable for
shares of TCI Group Series B Common Stock) to holders of TCI Group
Series A Common Stock and TCI Group Series B Common Stock, on an
equal per share basis; or consisting of shares of TCI Group Series
A Common Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of TCI Group Series A Common
Stock) to holders of TCI Group Series A Common Stock and, on an
equal per share basis, shares of TCI Group Series B Common Stock
(or like Convertible Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series B Common Stock) to
holders of TCI Group Series B Common Stock;
(ii) a share distribution consisting of shares of LMG Series A Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of LMG Series A Common Stock) to holders of
TCI Group Series A Common Stock and TCI Group Series B Common
Stock, on an equal per share basis; provided that the sum of (a)
the aggregate number of shares of LMG Series A Common Stock to be
so issued (or the number of such shares which would be issuable
upon conversion, exercise or exchange of any Convertible Securities
to be so issued) and (b) the number of shares of such series that
are subject to issuance upon conversion, exercise or exchange of
any Convertible Securities then outstanding that are attributed to
the TCI Group (other than Pre-Distribution Convertible Securities
and other than Convertible Securities convertible
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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
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
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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 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
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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 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
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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
(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
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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 to Pre-Distribution Convertible Securities and
Committed Acquisition Shares issuable which are included in the determination
of the Adjusted Outstanding Interest Fraction)
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in respect of TCI's preferred stock attributed to the Liberty Media Group.
TCI may elect to pay the dividend or redemption price referred to in clause
(i) or (ii) above either in the same form as the proceeds of the Disposition
were received or in any other combination of cash or securities or other
property (other than TCI Common Stock) that the TCI Board of Directors
determines will have an aggregate market value on a fully distributed basis,
of not less than the amount of the Net Proceeds. If the dividend or
redemption price is paid in the form of securities of an issuer other than
TCI, the TCI Board of Directors may determine either to (i) pay the dividend
or redemption price in the form of separate classes or series of securities,
with one class or series of such securities to holders of LMG Series A Common
Stock and another class or series of securities to holders of LMG Series B
Common Stock, provided that such securities (and, if such securities are
convertible into or exercisable or exchangeable for shares of another class
or series of securities, the securities so issuable upon such conversion,
exercise or exchange) do not differ in any respect other than their relative
voting rights and related differences in designation, conversion, redemption
and share distribution provisions with holders of shares of LMG Series B
Common Stock receiving the class or series having the higher relative voting
rights (without regard to whether such rights differ to a greater or lesser
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the LMG
Series A Common Stock and the LMG Series B Common Stock), provided that if
such securities constitute capital 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
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to pay a dividend described in clause (i) of the first paragraph under "--
Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
Stock" (a "Dividend Election"), (x) the record date for 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
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Convertible Securities following such redemption date or date for selection
of shares to be redeemed, as applicable, and (vii) in the case of a Partial
Redemption Election, a statement that TCI will not be required to register a
transfer of any shares of Liberty Media Group Common Stock for a period of 15
trading days next preceding the date fixed for selection of shares to be
redeemed. In the case of a Partial Redemption Election, TCI also will cause
to be given to each holder of shares of Liberty Media Group Common Stock
selected for redemption, a notice setting forth (i) the number of shares of
LMG Series A Common Stock and LMG Series B Common Stock held by such holder
to be redeemed, (ii) a statement that such shares of LMG Series A Common
Stock and LMG Series B Common Stock will be redeemed, (iii) the redemption
date (which will not be more than 85 trading days following the consummation
of such Disposition), (iv) the kind and per share amount of shares of capital
stock, cash and/or other securities or property to be received by such holder
with respect to each share of such Liberty Media Group Common Stock to be
redeemed, including details as to the calculation thereof, and (v) the place
or places where certificates for shares of such Liberty Media Group Common
Stock, properly endorsed or assigned for transfer (unless TCI waives such
requirement), are to be surrendered for delivery of certificates for shares
of such capital stock, cash and/or other securities or property. The
outstanding shares of Liberty Media Group Common Stock to be redeemed will be
redeemed by TCI pro rata among the holders of Liberty Media Group Common
Stock or by such other method as may be determined by the TCI Board of
Directors to be equitable.
In the case of a Conversion Election, TCI's notice also will state (i)
the per share number of shares of TCI Group Series A Common Stock or TCI
Group Series B Common Stock, as applicable, to be received with respect to
each share of LMG Series A Common Stock or LMG Series B Common Stock,
including details as to the calculation thereof, (ii) the place or places
where certificates for shares of Liberty Media Group Common Stock, properly
endorsed or assigned for transfer (unless TCI waives such requirement), are
to be surrendered, (iii) the number of outstanding shares of LMG Series A
Common Stock and LMG Series B Common Stock, the number of Committed
Acquisition Shares issuable and the number of shares of LMG Series A Common
Stock and LMG Series B Common Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange prices thereof and (iv) in the case of a
notice to holders of Convertible Securities, a statement to the effect that
holders of such Convertible Securities will be entitled to participate in
such conversion only if such holders appropriately convert, exercise or
exchange such Convertible Securities on or prior to the conversion date and a
statement as to what, if anything, such holders will be entitled to receive
pursuant to the terms of such Convertible Securities or, if applicable, the
provision described under "--Certain Provisions Respecting Convertible
Securities" if such holders convert, exercise or exchange such Convertible
Securities following such conversion date.
Notice of a Dividend Election will be given not later than the 30th
trading day following the consummation of the Disposition; notice of a Full
Redemption Election will be given not less than 35 trading days nor more than
45 trading days prior to the redemption date; notice of a Partial Redemption
Election will be given not later than the 30th trading day following the
consummation of the Disposition and the notice to holders of shares selected
for redemption will be given promptly following such selection, but not
earlier than the 40th trading day and not later than the 50th trading day
following the consummation of the Disposition; and notice of a Conversion
Election will be given not less than 35 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
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of Liberty Media Group Common Stock, properly endorsed or assigned for
transfer (unless TCI waives such requirement), are to be surrendered for
delivery of certificates for shares of common stock of the Liberty Media
Group Subsidiaries, (v) the number of outstanding shares of LMG Series A
Common Stock and LMG Series B Common Stock and the number of shares of LMG
Series A Common Stock and LMG Series B Common Stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof (and
stating which, if any, of such Convertible Securities constitute Pre-
Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) and the number of Committed Acquisition Shares issuable, and (vi) in
the case of a notice to holders of Convertible Securities, a statement to the
effect that holders of such Convertible Securities will be entitled to
receive shares of common stock of the Liberty Media Group Subsidiaries upon
redemption only if such holders appropriately convert, exercise or exchange
such Convertible Securities on or prior to the redemption date referred to in
clause (ii) of this sentence and a statement as to what, if anything, such
holders will be entitled to receive pursuant to the terms of such Convertible
Securities or, if applicable, the provisions described under "--Certain
Provisions Respecting Convertible Securities" if such holders convert,
exercise or exchange such Convertible Securities following the redemption
date. Such notice will be sent by first-class mail, postage prepaid, not
less than 35 trading days nor more than 45 trading days prior to the
redemption date, at such holder's address as the same appears on the transfer
books of TCI.
Neither the failure to mail any notice to any particular holder of
Liberty Media Group Common Stock or of Convertible Securities nor any defect
therein will affect the sufficiency thereof with respect to any other holder
of outstanding shares of Liberty Media Group Common Stock or of Convertible
Securities, or the validity of any conversion or redemption.
TCI will not be required to issue or deliver fractional shares of any
class of capital stock or any fractional securities to any holder of Liberty
Media Group Common Stock upon any conversion, redemption, dividend or other
distribution described above. In connection with the determination of the
number of shares of any class of capital stock that is issuable or the amount
of securities that is deliverable to any holder of record upon any such
conversion, redemption, dividend or other distribution (including any
fractions of shares or securities), TCI may aggregate the number of shares of
Liberty Media Group Common Stock held at the relevant time by such holder of
record. If the number of shares of any class of capital stock or the amount
of securities remaining to be issued or delivered to any holder of Liberty
Media Group Common Stock is a fraction, TCI will, if such fraction is not
issued or delivered to such holder, pay a cash adjustment in respect of such
fraction in an amount equal to the fair market 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
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Common Stock deliver to the person for whose account such shares were so
surrendered, or to the nominee or nominees of such person, certificates
representing the number of whole shares of the kind of capital stock or cash
and/or securities or other property to which such person is entitled,
together with any payment for fractional securities referred to above. If
less than all of the shares of Liberty Media Group Common Stock represented
by any one certificate are to be redeemed, TCI will issue and deliver a new
certificate for the shares of Liberty Media Group Common Stock not redeemed.
TCI will not be required to register a transfer of (i) any shares of Liberty
Media Group Common Stock for a period of 15 trading days next preceding any
selection of shares of Liberty Media Group Common Stock to be redeemed or
(ii) any shares of Liberty Media Group Common Stock selected or called for
redemption. Shares selected for redemption may not thereafter be converted
pursuant to the provisions described under "--Conversion 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's preferred stock is
entitled, (i) the holders of the shares of TCI Group Common Stock will share
equally, on a share for
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share basis, in a percentage of the funds of TCI remaining for distribution
to its common stockholders equal to 100% multiplied by the average daily
ratio (expressed as a decimal) of X/Z for the 20-trading day period ending on
the trading day prior to the date of the public announcement of such
liquidation, dissolution or winding up, and (ii) the holders of the shares of
Liberty Media Group Common Stock will share equally, on a share for share
basis, in a percentage of the funds of TCI remaining for distribution to its
common stockholders equal to 100% multiplied by the average daily ratio
(expressed as a decimal) of Y/Z for such 20-trading day period, where X is
the aggregate Market Capitalization of the TCI Group Series A Common Stock
and the TCI Group Series B Common Stock, Y is the aggregate Market
Capitalization of the LMG Series A Common Stock and the LMG Series B Common
Stock, and Z is the aggregate Market Capitalization of the TCI Group Series A
Common Stock, the TCI Group Series B Common Stock, the LMG Series A Common
Stock and the LMG Series B Common Stock. Neither a consolidation, merger nor
sale of assets will be construed to be a "liquidation," "dissolution" or
"winding up" of TCI. The "Market Capitalization" of any class or series of
capital stock of TCI on any trading day means the product of (i) the Market
Value of one share of such class or series on such trading day and (ii) the
number of shares of such class or series outstanding on such trading day.
No holder of Liberty Media Group Common Stock will have any special
right to receive specific assets of the Liberty Media Group in the case of
any dissolution, liquidation or winding up of TCI.
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 "Description of Common
Stock" 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
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market value of all assets of the corporation on a consolidated basis or the
aggregate market value of all the outstanding stock of the corporation;
certain transactions that would increase the interested stockholder's
proportionate share ownership of the stock of any class or series of the
corporation or such subsidiary; and any receipt by the interested stockholder
of the benefit of any loans, advances, guarantees, pledges or other financial
benefits provided by or through the corporation or any such subsidiary. In
general, and subject to certain exceptions, an "interested stockholder" is
any person who is the owner of 15% or more of the outstanding voting stock
(or, in the case of a corporation with classes of voting stock with disparate
voting power, 15% or more of the voting power of the outstanding voting
stock) of the corporation, and the affiliates and associates of such person.
The term "owner" is broadly defined to include any person that individually
or with or through his or its affiliates or associates, among other things,
beneficially owns such stock, or has the right to acquire such stock (whether
such right is 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's
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's preferred stock entitled to vote generally with the holders
of TCI Common Stock on matters submitted to stockholders for a vote. The TCI
Charter also provides for a TCI Board of Directors of not less than three
members, divided into three classes of approximately equal size, with each
class to be elected for a three-year term at each annual meeting of
stockholders. The exact number of directors, currently nine, is fixed by the
TCI Board of Directors. The holders of TCI Group Common Stock, Liberty Media
Group Common Stock, TCI's Class B 6% Cumulative Redeemable Exchangeable
Junior Preferred Stock, par value $.01 per share, and certain series of TCI's
Series Preferred Stock, par value $.01 per share ("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 48,429,425 shares remain available for designation
as of January 2, 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 1,175,326,387 and 643,826,638,
respectively, remain available for issuance as of November 1, 1995 (not
including shares held by TCI in treasury). 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
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<PAGE>
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's 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's
preferred stock, TCI's Bylaws require that written notice of the intent to
make a nomination at a meeting of stockholders must be received by the
Secretary of TCI, at TCI's principal executive offices, not later than (a)
with respect to an election of directors to be held at an annual meeting of
stockholders, 90 days in advance of such meeting, and (b) with respect to an
election of directors to be held at a special meeting of stockholders, the
close of business on the seventh day following the day on which notice of
such meeting is first given to stockholders. The notice must contain: (1) the
name and address of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (2) a representation that the
stockholder is a holder of record of TCI's Voting Securities entitled to vote
at the meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (3) a description of
all arrangements or understandings between the stockholder and each nominee
and any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the stockholder; (4)
such other information regarding each nominee proposed by such stockholder as
would have been required to be included in a proxy statement filed pursuant
to the proxy rules of the Securities and Exchange Commission had each
proposed nominee been nominated, or intended to be nominated, by the TCI
Board of Directors; and (5) the consent of each nominee to serve as a
director of TCI if so elected. Any actions to remove directors is required to
be for "cause" (as defined in the TCI Charter) and be approved by the holders
of 66-2/3% of the total voting power of the outstanding shares entitled to
vote in the election of directors.
LEGAL MATTERS
Certain legal matters with respect to the Shares will be passed upon for
the Company by Stephen M. Brett, Esq., Executive Vice President and General
Counsel of the Company.
EXPERTS
The consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended December 31, 1994, and all related
schedules, which appear in Tele-Communications, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1994, as amended, have been incorporated
by reference herein in reliance upon the reports, dated March 27, 1995, of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. The reports of KPMG Peat Marwick LLP covering the
December 31, 1994 consolidated financial statements refer to the adoption of
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," in 1994.
The consolidated balance sheets of TeleWest Communications plc and
subsidiaries as of 31 December 1994 and 1993, and the related consolidated
statements of operations and cash flows for each of the years in the three
year period ended 31 December 1994, which appear in the 31 December 1994
Annual Report on Form 10-K of Tele-Communications, Inc., as amended, have
been incorporated by reference herein in reliance upon the report of KPMG,
independent certified public accountants,
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<PAGE>
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 of KPMG Finsterbusch Pickenhayn Sibille, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated balance sheets of QVC, Inc. and subsidiaries as of
January 31, 1994 and 1993, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the years in the
three-year period ended January 31, 1994, which appear in the Current Report
on Form 8-K of Tele-Communications, Inc. dated February 3, 1995, as amended,
have been incorporated by reference herein in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. The report of KPMG Peat Marwick LLP covering the
January 31, 1994 consolidated financial statements refers to a change in the
method of accounting for income taxes.
The financial statements of TeleCable Corporation as of December 31,
1993 and 1992 and for each of the two years in the period ended December 31,
1993, incorporated in this Prospectus by reference to the Company's Current
Report on Form 8-K dated August 26, 1994, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
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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
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<S> <C>
AVAILABLE INFORMATION.......... 3
INCORPORATION OF DOCUMENTS BY
REFERENCE................... 3
THE COMPANY.................... 4
SELLING STOCKHOLDERS........... 4
PLAN OF DISTRIBUTION........... 5
DESCRIPTION OF COMMON STOCK.... 6
LEGAL MATTERS.................. 26
EXPERTS........................ 26
</TABLE>
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TELE-COMMUNICATIONS, INC.
Tele-Communications, Inc. Series A
TCI Group
Common Stock ($1.00 par value)
Tele-Communications, Inc. Series A
Liberty Media Group
Common Stock ($1.00 par value)
-----------------------------------------
PROSPECTUS
-----------------------------------------
January 22, 1996
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