<PAGE>
As filed with the Securities and Exchange Commission on January 18, 1996
REGISTRATION NO. 33 -
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
______________________
TELE-COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 84-1260157
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
(303) 267-5500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
______________________
Stephen M. Brett, Esq.
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
(303) 267-5500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
______________________
Copy to:
Jerome H. Kern, Esq.
Baker & Botts, L.L.P.
885 Third Avenue
New York, New York 10022-4834
______________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after the effective date of the registration
statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
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<CAPTION>
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED OFFERING PRICE PER SHARE AGGREGATE OFFERING PRICE REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tele-Communications, Inc., Series A
TCI Group Common Stock, par value (1) (2) (2) $100.00
$1.00 per share.....................
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</TABLE>
(1) Includes such presently indeterminate number of shares that may be (a)
deliverable from time to time upon exchange of shares of Class A Senior
Cumulative Exchangeable Preferred Stock, $100 par value per share (the
"Exchangeable Preferred Stock"), of Viacom International Inc. ("VII
Cable"), the offer and sale of which has been registered separately by VII
Cable under a Registration Statement on Form S-4 (Registration Statement
No. 33-64467), (b) necessary to adjust the number of shares from time to
time deliverable upon such exchange in accordance with the anti-dilution
provisions of the Exchangeable Preferred Stock as a result of a stock
split, stock dividend or other adjustment to or change in the outstanding
shares of Series A TCI Group Common Stock and (c) deliverable from time to
time in payment of dividend and/or redemption (whether mandatory or
optional) obligations in accordance with the terms of the Exchangeable
Preferred Stock.
(2) Such shares will be deliverable only upon exchange or redemption of, or as
a dividend on, the Exchangeable Preferred Stock and no separate
consideration will be received for such shares. Accordingly, pursuant to
Rule 457(i), no separate registration fee is required in connection with
the registration of such shares.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 18, 1996
PROSPECTUS
TELE-COMMUNICATIONS, INC.
SERIES A TCI GROUP COMMON STOCK
($1.00 Par Value)
This Prospectus relates to shares of Tele-Communications, Inc. Series A TCI
Group Common Stock, par value $1.00 per share (the "Series A TCI Group Common
Stock"), of Tele-Communications, Inc., a Delaware corporation (the "Company"),
which may be delivered by Viacom International Inc. ("VII Cable"), a Delaware
corporation, pursuant to the terms of the Class A Senior Cumulative Exchangeable
Preferred Stock, par value $100 per share, of VII Cable (the "VII Cable
Preferred Stock"). See "Plan of Distribution." Simultaneously with the issuance
of the VII Cable Preferred Stock, VII Cable will be renamed "TCI Pacific
Communications, Inc." The Company will not receive any proceeds from the
delivery by VII Cable of the shares of Series A TCI Group Common Stock covered
hereby.
The VII Cable Preferred Stock is being offered by a separate Offering
Circular-Prospectus of Viacom, Inc., a Delaware corporation ("Viacom") and VII
Cable (the "Viacom Prospectus"). This Prospectus relates only to the Series A
TCI Group Common Stock covered hereby and does not relate to the VII Cable
Preferred Stock or any other securities of VII Cable or Viacom. THE COMPANY HAS
NOT PARTICIPATED IN THE PREPARATION OF, AND TAKES NO RESPONSIBILITY FOR ANY
INFORMATION INCLUDED IN OR OMITTED FROM, THE VIACOM PROSPECTUS. THE VIACOM
PROSPECTUS DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED
BY REFERENCE HEREIN. THE COMPANY DISCLAIMS ANY AND ALL LIABILITY FOR ANY UNTRUE
STATEMENT OF A MATERIAL FACT IN THE VIACOM PROSPECTUS OR OMISSION TO STATE A
MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN NOT MISLEADING,
IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE. See "Viacom
Prospectus -- Explanatory Note." An investment in the VII Cable Preferred Stock
may have materially different characteristics from an investment in the Series A
TCI Group Common Stock.
The Series A TCI Group Common Stock is one of four series of common stock
of the Company. See "Description of Common Stock." The Series A TCI Group Common
Stock is traded on the Nasdaq National Market under the trading symbol "TCOMA."
On January 17, 1996, the last reported sale price of the Series A TCI Group
Common Stock on the Nasdaq National Market was $21 5/8 per share.
____________________
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 _____________, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the shares of Series A
TCI Group Common Stock offered hereby. 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 Series A TCI Group Common Stock and the
Company, reference is made to the Registration Statement. The Registration
Statement, including any amendments, schedules and exhibits filed or
incorporated by reference as a part thereof, is available for inspection and
copying as set forth below. Statements contained herein or in any document
incorporated herein by reference concerning the provisions of any document are
not necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission. Each such statement is qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information (including the
Registration Statement) filed with the Commission by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and at Seven World
Trade Center, Suite 1300, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy
statements and other information concerning the Company can also be inspected at
the Nasdaq Stock Market at 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
under the Exchange Act (Commission File No. 0-20421) and are hereby incorporated
into this Prospectus by reference and made a part hereof: (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 August 26, 1994, January 23, 1995, February 3, 1995
(as amended by Form 8-K/A (Amendment No. 1)), February 13, 1995, February 15,
1995, April 6, 1995, April 20, 1995 (as amended by Form 8-K/A (Amendment No.
1)), May 4, 1995 (as amended by Form 8-K/A (Amendment No. 1)), 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 years in the two-year period ended December 31, 1993, included in
the Current Report on Form 8-K of the Company 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 Series A TCI Group Common Stock 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 previous 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 information 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.
____________________
2
<PAGE>
VIACOM PROSPECTUS - EXPLANATORY NOTE
VII Cable has filed with the Commission a Registration Statement on Form
S-4 (the "Viacom Registration Statement"), of which the Viacom Prospectus forms
a part, with respect to shares of Class A Common Stock, $100 par value per
share, of VII Cable (the "VII Cable Class A Common Stock") and with respect to
the VII Cable Preferred Stock into which the VII Cable Class A Common Stock will
automatically convert as described in the Viacom Prospectus. This Prospectus is
being mailed with the Viacom Prospectus because the Series A TCI Group Common
Stock offered hereby may be delivered by VII Cable as dividends on, upon
optional or mandatory redemption by VII Cable of, or upon exchange at the option
of the holder of, the VII Cable Preferred Stock.
THIS PROSPECTUS RELATES ONLY TO THE SERIES A TCI GROUP COMMON STOCK OFFERED
HEREBY AND DOES NOT RELATE TO THE VII CABLE CLASS A COMMON STOCK, THE VII CABLE
PREFERRED STOCK OR ANY OTHER SECURITIES OF VII CABLE OR VIACOM. VIACOM FILES
PERIODIC AND OTHER REPORTS AND PROXY STATEMENTS WITH THE COMMISSION. PROSPECTIVE
INVESTORS ARE DIRECTED TO SUCH PUBLICLY AVAILABLE DOCUMENTS AS WELL AS TO THE
VIACOM PROSPECTUS FOR INFORMATION CONCERNING VIACOM, VII CABLE, THE VII CABLE
CLASS A COMMON STOCK AND THE VII CABLE PREFERRED STOCK. THE COMPANY HAS NOT
PARTICIPATED IN THE PREPARATION OF THE VIACOM PROSPECTUS NOR MADE ANY DUE
DILIGENCE INQUIRY WITH RESPECT THERETO. THE COMPANY MAKES NO REPRESENTATION THAT
THE VIACOM PROSPECTUS IS ACCURATE OR COMPLETE. THE COMPANY DISCLAIMS ANY AND ALL
LIABILITY FOR ANY UNTRUE STATEMENT OF A MATERIAL FACT IN THE VIACOM PROSPECTUS
OR OMISSION TO STATE A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
THEREIN NOT MISLEADING, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE.
3
<PAGE>
THE COMPANY
The Company, through its subsidiaries and affiliates, is principally
engaged in the construction, acquisition, ownership and operation of cable
television systems and in the provision of satellite delivered programming
services to various distribution media, principally cable television systems.
The Company believes that, measured by the number of basic subscribers, it is
the largest provider of cable television services in the United States. The
Company also has interests in cable and telecommunications operations and
television programming in certain international markets, as well as investments
in companies and joint ventures involved in developing and providing programming
for new television and telecommunications technologies. The Company is organized
into four principal business groups: Domestic Cable and Communications; Domestic
Programming; International Cable and Programming; and Technology/Venture
Capital. The Company is a Delaware corporation and its executive offices are
located at Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000;
telephone (303) 267-5500.
PLAN OF DISTRIBUTION
The terms of the VII Cable Preferred Stock provide that each holder of VII
Cable Preferred Stock may, at its option, at any time after the fifth
anniversary of the date of issuance thereof (unless earlier redeemed), exchange
such holder's shares of VII Cable Preferred Stock, in whole or in part, for
shares of Series A TCI Group Common Stock at an exchange rate set forth in the
VII Cable Preferred Stock. The terms of the VII Cable Preferred Stock further
provide that VII Cable may, at its option, deliver to the holders of the VII
Cable Preferred Stock shares of Series A TCI Group Common Stock (i) in payment
of VII Cable's dividend obligations on the VII Cable Preferred Stock or (ii) in
payment, in whole or in part, of VII Cable's obligations to redeem shares of VII
Cable Preferred Stock pursuant to the optional or mandatory redemption
provisions of the VII Cable Preferred Stock.
The Company has no obligations with respect to the VII Cable Preferred
Stock, which are securities of VII Cable and are not securities of the Company,
other than its obligation to contribute to VII Cable or otherwise cause VII
Cable to have available sufficient shares of Series A TCI Group Common Stock to
enable VII Cable to deliver such shares to holders of VII Cable Preferred Stock
upon exercise by such holders of their exchange rights under the terms of the
VII Cable Preferred Stock. In addition, if the VII Cable Board of Directors
determines to pay a dividend and VII Cable is prohibited from paying cash
dividends under its existing loan agreements, a subsidiary of the Company has
agreed to make available to VII Cable shares of Series A TCI Group Common Stock
to pay such dividends.
DESCRIPTION OF COMMON STOCK
The Series A TCI Group Common Stock is one of four series of common stock,
par value $1.00 per share ("Company Common Stock"), of the Company. The other
three series of the Company Common Stock consist of the following: (i) the Tele-
Communications, Inc. Series B TCI Group Common Stock (the "Series B TCI Group
Common Stock, and together with the Series A TCI Group Common Stock, the "TCI
Group Common Stock"), (ii) the Tele-Communications, Inc. Series A Liberty Media
Group Common Stock (the "Series A LMG Common Stock") and (iii) the Tele-
Communications, Inc. Series B Liberty Media Group Common Stock (the "Series B
LMG Common Stock, and together with the Series A LMG Common Stock, the "Liberty
Media Group Common Stock"). Each series of Company Common Stock has powers and
rights that may affect the powers and rights of each other series of Company
Common Stock. Accordingly, a description of all four series of Company Common
Stock is set forth below. However, as of the date hereof, the Series A TCI Group
Common Stock is the only series of Company Common Stock for which the VII Cable
Preferred Stock is exchangeable, or which VII Cable may deliver upon optional or
mandatory redemption of, or as a dividend on, the VII Cable Preferred Stock. See
"Plan of Distribution."
The following description of the Company Common Stock does not purport to
be complete and is qualified in its entirety be reference to the Restated
Certificate of Incorporation, as amended, of the Company (the "Company
Charter"), which has been incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus forms a part.
4
<PAGE>
GENERAL
The Company Charter provides that the Company is authorized to issue
2,725,000,000 shares of Company 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 December
31, 1995, 571,576,645 shares of Series A TCI Group Common Stock, 84,801,554
shares of Series B TCI Group Common Stock, 142,892,796 shares of Series A LMG
Common Stock and 21,200,336 shares of Series B LMG Common Stock (in each case
net of shares held in treasury) had been issued and were outstanding.
The Company Charter also provides for the issuance of 52,375,096 shares of
preferred stock (the "Company Preferred Stock"), of which 700,000 shares are
designated Class A Preferred Stock, par value $0.01 per share (the "Class A
Preferred Stock"), 1,675,096 shares are designated Class B 6% Cumulative
Redeemable Exchangeable Junior Preferred Stock, par value $.01 per share (the
"Class B Preferred Stock"), and 50,000,000 shares are designated Series
Preferred Stock, par value $.01 per share (the "Series Preferred Stock"),
issuable in series. Of the Series Preferred Stock, 80,000 shares are designated
Convertible Preferred Stock, Series C (the "Series C Preferred Stock"),
1,000,000 shares are designated Convertible Preferred Stock, Series D (the
"Series D Preferred Stock"), 400,000 shares are designated Redeemable
Convertible Preferred Stock, Series E (the "Series E Preferred Stock"), and
500,000 shares are designated Convertible Redeemable Participating Preferred
Stock, Series F (the "Series F Preferred Stock"). As of December 31, 1995,
1,620,026 shares of Class B Preferred Stock, 70,575 shares of Series C Preferred
Stock, 999,569 shares of Series D Preferred Stock and 277,064 shares of Series F
Preferred Stock had been issued and outstanding. All of the shares of Class A
Preferred Stock have previously been redeemed and retired and may not be
reissued, thereby reducing the number of authorized shares of Company Preferred
Stock. All of the shares of Series E Preferred Stock have previously been
redeemed and retired with the effect that such shares have been restored to the
status of authorized and unissued shares of Series Preferred Stock, may be
reissued as shares of another series of Series Preferred Stock, but such shares
may not be reissued as Series E Preferred Stock. All of the outstanding shares
of Series F Preferred Stock are held by subsidiaries of the Company. The Company
has authorized, in connection with a pending transaction, the issuance of an
additional 18,350,918 shares of Company Preferred Stock in two series, of which
9,175,459 shares will be designated Redeemable Convertible TCI Group Preferred
Stock, Series G (the "Series G Preferred Stock") and 9,175,459 shares will be
designated Redeemable Convertible Liberty Media Group Preferred Stock, Series H
(the "Series H Preferred Stock"). After giving effect to the designations of the
Series G Preferred Stock and the Series H Preferred Stock, at least 30,069,082
shares of Series Preferred Stock shall remain available for designation pursuant
to the Company Charter.
The rights evidenced by the Company Common Stock (including the Series A
TCI Group Common Stock) are subject to the prior preferences and rights of the
Company Preferred Stock. In general, under the provisions of the Class B
Preferred Stock and each outstanding series of Series Preferred Stock, no
dividends may be paid on, and neither the Company nor any subsidiary of the
Company may purchase or otherwise acquire any shares of, the Company Common
Stock for so long as (i) dividends are in arrears on the Class B Preferred Stock
or on any such series of Series Preferred Stock or (ii) the Company is in
default of its obligation to redeem (or otherwise acquire or exchange in
accordance with the terms of the Company Charter or the instrument creating such
Company Preferred Stock) shares of the Class B Preferred Stock or any such
series of Series Preferred Stock on a date fixed for such redemption (or other
acquisition or exchange). The Series G Preferred Stock and the Series H
Preferred Stock will contain similar provisions that may restrict the payment of
dividends on, or the purchase or other acquisition by the Company or any of its
subsidiaries of, shares of Company Common Stock.
TCI GROUP COMMON STOCK AND LIBERTY MEDIA GROUP COMMON STOCK
CERTAIN DEFINITIONS
As used herein, the following terms have the meanings specified below:
5
<PAGE>
"Committed Acquisition Shares" means (a) the shares of Series A LMG Common
Stock that the Company 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 Series A LMG Common Stock that are issuable upon conversion, exercise or
exchange of Convertible Securities that the Company 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 the Company to issue shares of the
Company's Class A Common Stock, par value $1.00 per share (which has been
redesignated Series A TCI Group Common Stock), which as a result of the
Distribution constitute obligations to issue, among other securities, Series A
LMG Common Stock or Convertible Securities which are convertible into or
exercisable or exchangeable for Series A LMG 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 Series A LMG Common Stock and dividends or
distributions of shares of Series A LMG Common Stock or Series B LMG Common
Stock to holders of Series A LMG Common Stock and other reclassifications of the
Series A LMG Common Stock, in each case occurring (or the record date for which
occurs) after the Distribution.
"Convertible Securities" means any securities of the Company (other than
any series of Company Common Stock) that are convertible into, exchangeable for
or evidence the right to purchase any shares of any series of Company Common
Stock, whether upon conversion, exercise, exchange, pursuant to antidilution
provisions of such securities or otherwise.
The "Distribution" means the distribution paid by the Company on August 10,
1995 of one-fourth of one share of Series A LMG Common Stock on each outstanding
share of Series A TCI Group Common Stock and one-fourth of one share of Series B
LMG Common Stock on each outstanding share of Series B TCI Group Common Stock to
holders of record on August 4, 1995.
The "Inter-Group Interest" means any equity value of the Company
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 the Company 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 the Company 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 the Company or any of its subsidiaries in the
businesses, assets and liabilities acquired by the Company or any of its
subsidiaries for the Liberty Media Group, as determined by the Board of
Directors of the Company (the "Company Board of Directors");
6
<PAGE>
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 the Company 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
the Company pays a dividend or makes any other distribution with respect to
shares of Liberty Media Group Common Stock payable in securities of the Company
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. The Company may also, to
the extent any such other securities constitute Convertible Securities which are
at the time convertible, exercisable or exchangeable, cause such Convertible
Securities deemed to be held by the TCI Group to be deemed to be converted,
exercised or exchanged (and to the extent the terms of such Convertible
Securities require payment or delivery of consideration in order to effect such
conversion, exercise or exchange, the Liberty Media Group will in such case
include an amount of the kind of properties or assets required to be paid or
delivered as such consideration for the amount of the Convertible Securities
deemed converted, exercised or exchanged as if such Convertible Securities were
outstanding), in which case such Convertible Securities will no longer be deemed
to be held by the TCI Group or attributed to the Liberty Media Group.
"Market Value" of any class or series of capital stock of the Company 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 the Company, 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 Company Board of Directors; provided that for purposes of determining the
ratios described under "--Conversion and Redemption-Conversion at the Option of
the Company" and "--Mandatory Dividend, Redemption or Conversion of Liberty
Media Group Common Stock" and "--Liquidation," (a) the "Market Value" of any
share of any series of Company 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 the Company Common Stock will be reduced by the fair
market value of the per share amount of such dividend or distribution as
determined by the Company Board of Directors and (b) the "Market Value" of any
share of any series of Company 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
Company Common Stock or (ii) the "ex" date or any similar date for any dividend
or distribution with respect to any such series of Company Common Stock in
shares of such series of Company Common Stock will be appropriately adjusted to
reflect such subdivision, combination, dividend or distribution.
The "Number of Shares Issuable with Respect to the Inter-Group Interest" is
currently zero and will from time to time be
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(a) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of the
Series A LMG Common Stock and dividends or distributions of shares of
Series A LMG Common Stock or Series B LMG Common Stock to holders of Series
A LMG Common Stock and other reclassifications of Series A LMG Common
Stock,
(b) decreased (but not to less than zero) by (i) the aggregate number
of shares of Series A LMG Common Stock issued or sold by the Company 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 Series A LMG 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 Series A LMG Common Stock issued or delivered by the
Company as a dividend or distribution to holders of Series A TCI Group
Common Stock and Series B TCI Group Common Stock, (iv) the aggregate number
of shares of Series A LMG Common Stock issued or delivered upon the
conversion, exercise or exchange of any Convertible Securities (other than
Pre-Distribution Convertible Securities and Convertible Securities which
are convertible into or exercisable or exchangeable for Committed
Acquisition Shares) issued or delivered by the Company after the
Distribution as a dividend or distribution or by reclassification or
exchange to holders of Series A TCI Group Common Stock and Series B TCI
Group Common Stock and (v) the aggregate number of shares of Series A LMG
Common Stock (rounded, if necessary, to the nearest whole number), equal to
the aggregate fair value (as determined by the Company 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 Series A LMG
Common Stock as of the date of such transfer, and
(c) increased by (i) the aggregate number of any shares of Series A
LMG Common Stock and Series B LMG 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
Company 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
Series A LMG Common Stock as of the date of such contribution and (iii) the
aggregate number of shares of Series A LMG Common Stock and Series B LMG
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."
The Company will not issue or sell shares of Series B LMG 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, the Company will prepare and file a
statement of such change with the Secretary of the Company.
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 the
Company's Class A Common Stock, par value $1.00 per share (which has been
redesignated Series A TCI Group Common Stock).
The "TCI Group" means as of any date of determination thereof:
(a) the interest of the Company or any of its subsidiaries in all of
the businesses in which the Company or any of its subsidiaries (or any of
their predecessors or successors) is or has been engaged, directly or
indirectly,
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and the respective assets and liabilities of the Company 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 the Company attributed to the Liberty
Media Group, for which provision will be made as described in the
penultimate sentence of this definition), an amount of assets or properties
theretofore included in the Liberty Media Group equal to the aggregate
amount of such kind of assets or properties so paid in respect of such
dividend or other distribution with respect to shares of Liberty Media
Group Common Stock multiplied by a fraction the numerator of which is equal
to the Inter-Group Interest Fraction in effect immediately prior to the
record date for such dividend or other distribution and the denominator of
which is equal to the Outstanding Interest Fraction in effect immediately
prior to the record date for such dividend or other distribution; and
(d) any assets or properties transferred from the Liberty Media Group
to the TCI Group;
provided that, from and after any contribution or transfer of any assets or
properties from the TCI Group to the Liberty Media Group, the TCI Group will no
longer include such assets or properties so contributed or transferred (other
than pursuant to its interest in the businesses, assets and liabilities of the
Liberty Media Group described in clause (b) above). If the Company pays a
dividend or makes any other distribution with respect to shares of Liberty Media
Group Common Stock payable in other securities of the Company 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. The Company 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 Series A TCI Group Common Stock are entitled to one vote for
each share of such stock held, holders of Series B TCI Group Common Stock are
entitled to ten votes for each share of such stock held, holders of Series A LMG
Common Stock are entitled to one vote for each share of such stock held and
holders of Series B LMG Common Stock are entitled to ten votes for each share of
such stock held, on all matters presented to such stockholders. Except as may
otherwise be required by the laws of the State of Delaware or, with respect to
any class or series of Company Preferred Stock, in the Company Charter
(including any resolution or resolutions providing for the establishment of any
such series pursuant to authority vested in the Company Board of Directors by
the Company 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
Company Preferred Stock, if any, entitled to vote thereon will vote as one class
for all purposes. See "--Other Matters."
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Neither the holders of Series A TCI Group Common Stock or Series B TCI
Group Common Stock, nor the holders of Series A LMG Common Stock or Series B LMG
Common Stock, have any rights to vote as a separate class or series on any
matter coming before the stockholders of the Company, except with respect to
certain limited class and series voting rights provided under the General
Corporation Law of the State of Delaware (the "DGCL").
DIVIDENDS
Subject to the prior payment of dividends on outstanding shares of Company
Preferred Stock, dividends may be paid as determined by the Company 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 the Company 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 the Company legally available therefor under the DGCL. Under the DGCL
the amount of the funds of the Company legally available for the payment of
dividends on any series of the Company Common Stock is determined on the basis
of the entire corporation and not just the TCI Group or the Liberty Media 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, Company Preferred Stock. Certain loan agreements to which certain
subsidiaries of the Company 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 Company 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 the Company 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 Company 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. The "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 the Company 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.
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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
Series A TCI Group Common Stock or the Series B TCI Group Common Stock will be
paid only on both series, in equal amounts per share, and any dividends paid on
the Series A LMG Common Stock or the Series B LMG Common Stock will be paid only
on both series, in equal amounts per share.
The Company 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 the Company 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 Series A TCI Group
Common Stock (or Convertible Securities convertible into or exercisable
or exchangeable for shares of Series A TCI Group Common Stock) to
holders of Series A TCI Group Common Stock and Series B TCI Group
Common Stock, on an equal per share basis; or consisting of shares of
Series B TCI Group Common Stock (or Convertible Securities convertible
into or exercisable or exchangeable for shares of Series B TCI Group
Common Stock) to holders of Series A TCI Group Common Stock and Series
B TCI Group Common Stock, on an equal per share basis; or consisting of
shares of Series A TCI Group Common Stock (or Convertible Securities
convertible into or exercisable or exchangeable for shares of Series A
TCI Group Common Stock) to holders of Series A TCI Group Common Stock
and, on an equal per share basis, shares of Series B TCI Group Common
Stock (or like Convertible Securities convertible into or exercisable
or exchangeable for shares of Series B TCI Group Common Stock) to
holders of Series B TCI Group Common Stock;
(ii) a share distribution consisting of shares of Series A LMG Common
Stock (or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series A LMG Common Stock) to holders of
Series A TCI Group Common Stock and Series B TCI Group Common Stock, on
an equal per share basis; provided that the sum of (a) the aggregate
number of shares of Series A LMG Common Stock to be so issued (or the
number of such shares which would be issuable upon conversion, exercise
or exchange of any Convertible Securities to be so issued) and (b) the
number of shares of such series that are subject to issuance upon
conversion, exercise or exchange of any Convertible Securities then
outstanding that are attributed to the TCI Group (other than Pre-
Distribution Convertible Securities and other than Convertible
Securities convertible into or exercisable or exchangeable for
Committed
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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 the Company 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 Series A TCI Group Common Stock and Series B
TCI Group Common Stock or on the basis of a distribution of one class
or series of securities to holders of Series A TCI Group Common Stock
and another class or series of securities to holders of Series B TCI
Group 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 Series B TCI Group 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
Series A TCI Group Common Stock and the Series B TCI Group Common
Stock), provided that if the securities so distributed constitute
capital stock of a subsidiary of the Company, 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 Series A TCI Group Common Stock and the Series B
TCI Group Common Stock, and provided in each case that such
distribution is otherwise made on an equal per share basis.
The Company will not reclassify, subdivide or combine the Series A TCI
Group Common Stock without reclassifying, subdividing or combining the Series B
TCI Group Common Stock, on an equal per share basis, and the Company will not
reclassify, subdivide or combine the Series B TCI Group Common Stock without
reclassifying, subdividing or combining the Series A TCI Group 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 Series A LMG Common Stock
(or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series A LMG Common Stock) to holders of
Series A LMG Common Stock and Series B LMG Common Stock, on an equal
per share basis; or consisting of shares of Series B LMG Common Stock
(or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series B LMG Common Stock) to holders of
Series A LMG Common Stock and Series B LMG Common Stock, on an equal
per share basis; or consisting of shares of Series A LMG Common Stock
(or Convertible Securities convertible into or exercisable or
exchangeable for shares of Series A LMG Common Stock) to holders of
Series A LMG Common Stock and, on an equal per share basis, shares of
Series B LMG Common Stock (or like Convertible Securities convertible
into or exercisable or exchangeable for shares of Series B LMG Common
Stock) to holders of Series B LMG Common Stock; and
(ii) a share distribution consisting of any class or series of securities of
the Company 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 Series A TCI Group Common Stock or Series B
TCI Group Common Stock), either on the basis of a distribution of
identical securities, on an equal per share basis, to holders of Series
A LMG Common Stock and Series B LMG Common Stock or on the basis of a
distribution of one class or series of securities to holders of Series
A LMG Common Stock and another class or series of securities to
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holders of Series B LMG 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 Series B LMG 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 Series A LMG Common Stock and the Series B LMG Common
Stock), provided that if the securities so distributed constitute
capital stock of a subsidiary of the Company, 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 Series A LMG Common Stock and the Series B LMG
Common Stock, and provided in each case that such distribution is
otherwise made on an equal per share basis.
The Company will not reclassify, subdivide or combine the Series A LMG
Common Stock without reclassifying, subdividing or combining the Series B LMG
Common Stock, on an equal per share basis, and the Company will not reclassify,
subdivide or combine the Series B LMG Common Stock without reclassifying,
subdividing or combining the Series A LMG Common Stock, on an equal per share
basis.
CONVERSION AND REDEMPTION
Conversion of Series B TCI Group Common Stock and Series B LMG Common Stock
at the Option of the Holder. Each share of Series B TCI Group Common Stock is
convertible, at the option of the holder thereof, into one share of Series A TCI
Group Common Stock. Each share of Series B LMG Common Stock is convertible, at
the option of the holder thereof, into one share of Series A LMG Common Stock.
Shares of Series A TCI Group Common Stock are not convertible into shares of
Series B TCI Group Common Stock, and shares of Series A LMG Common Stock are not
convertible into shares of Series B LMG Common Stock.
Conversion of Liberty Media Group Common Stock at the Option of Company.
The Company Board of Directors may at any time declare that (i) all of the
outstanding shares of Series A LMG Common Stock will be converted into a number
(or fraction) of fully paid and nonassessable shares of Series A TCI Group
Common Stock equal to the Optional Conversion Ratio and (ii) all of the
outstanding shares of Series B LMG Common Stock will be converted into a number
(or fraction) of fully paid and nonassessable shares of Series B TCI Group
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 Series A TCI Group 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 the Company 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 the Company (the "First Appraiser") and one designated by a
committee of the Company Board of Directors all of whose members are independent
directors as determined under Nasdaq National Market rules (the "Second
Appraiser"). The date upon which the last of such appraisers is selected is
hereinafter referred to as the "Selection Date." Not later than 20 days after
the Selection Date, the First Appraiser and the Second Appraiser will each
determine its initial view as to the private market value of the Liberty Media
Group as of the Appraisal Date and will consult with one another with respect
thereto. Not later than the 30th day after the Selection Date, the First
Appraiser and the Second Appraiser will each have determined its final view as
to such private market value. If the higher of the respective final views of the
First Appraiser and the Second Appraiser as to such
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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 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 the Company determines to convert shares of Series A LMG Common Stock
into Series A TCI Group Common Stock and shares of Series B LMG Common Stock
into Series B TCI Group 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 the Company determines not to undertake such
conversion, the Company may at any time thereafter undertake to reestablish the
Liberty Media Group Common Stock Per Share Value as of a subsequent date.
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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 the
Company 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 the Company of all of the
Company's properties and assets in one transaction or a series of related
transactions in connection with the liquidation, dissolution or winding up of
the Company, (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 the Company, directly or indirectly, after
giving effect to the Disposition, controls or (d) in connection with a Related
Business Transaction), the Company 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 Company 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 the Company 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 Series A LMG Common Stock and Series B LMG
Common Stock in exchange for cash and/or securities or other property
(other than Company 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 Series A LMG Common Stock and Series B LMG
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 Series A LMG Common Stock and each share of
Series B LMG 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 Company 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 Series A LMG Common Stock and Series B LMG Common Stock, such
aggregate amount to be allocated (subject to the provisions described
in the last sentence of the paragraph herein which defines the term
"Net Proceeds") to shares of Series A LMG Common Stock and Series B LMG
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
Series A LMG 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 Series
A LMG Common Stock and each share of Series B LMG Common Stock is the
same); or
(iii) convert (a) each outstanding share of Series A LMG Common Stock into a
number (or fraction) of fully paid and nonassessable shares of Series A
TCI Group Common Stock and (b) each outstanding share
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of Series B LMG Common Stock into a number (or fraction) of fully paid
and nonassessable shares of Series B TCI Group 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 Series
A LMG Common Stock to the Market Value of one share of Series A TCI
Group 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 then-current market value (as determined
by the Company 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 the Company receives as proceeds of such Disposition primarily equity
securities (including, without limitation, capital stock, convertible
securities, partnership or limited partnership interests and other types of
equity securities, without regard to the voting power or contractual or other
management or governance rights related to such equity securities) of the
purchaser or acquirer of such assets and properties of the Liberty Media Group,
any entity which succeeds (by merger, formation of a joint venture enterprise or
otherwise) to such assets and properties of the Liberty Media Group or a third
party issuer, which purchaser, acquirer or other issuer is engaged or proposes
to engage primarily in one or more businesses similar or complementary to the
businesses conducted by the Liberty Media Group prior to such Disposition, as
determined in good faith by the Company 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 the Company 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 the Company's obligations with respect to Pre-
Distribution Convertible Securities and Committed Acquisition Shares issuable
which are included in the determination of the Adjusted Outstanding Interest
Fraction) in respect of Company Preferred Stock attributed to the Liberty Media
Group. The Company 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 Company Common Stock) that the Company 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 the
Company, the Company 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 Series A
LMG Common Stock and another class or series of securities to holders of Series
B LMG 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 Series B LMG 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 Series A LMG Common Stock and the
Series B LMG Common Stock), provided that if such securities constitute capital
stock of a subsidiary of the Company, such rights will not differ to a greater
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share
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distribution provisions between the Series A LMG Common Stock and Series B LMG
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 Series A LMG Common Stock and Series B LMG 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 the Company (the "Liberty Media Group Subsidiaries"), the
Company Board of Directors may, subject to there being funds of the Company
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 Company Board of Directors may
determine either to (i) redeem shares of Series A LMG Common Stock and Series B
LMG 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 Series A LMG Common Stock and Series B LMG Common Stock, with
holders of shares of Series B LMG Common Stock receiving the class or series
having the higher relative voting rights, or (ii) redeem shares of Series A LMG
Common Stock and Series B LMG 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 the Company determines to undertake a redemption as
described in clause (i) of the preceding sentence, the outstanding shares of
common stock of each Liberty Media Group Subsidiary not distributed to holders
of Liberty Media Group Common Stock would consist solely of the class or series
having the lower relative voting rights.
Certain Provisions Respecting Convertible Securities. Unless the provisions
of any class or series of Pre-Distribution Convertible Securities or Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares provide specifically to the contrary, after any
conversion date or redemption date on which all outstanding shares of Liberty
Media Group Common Stock were converted or redeemed, any share of Liberty Media
Group Common Stock that is issued on conversion, exercise or exchange of any
Pre-Distribution Convertible Securities or any Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition Shares
will, immediately upon issuance pursuant to such conversion, exercise or
exchange and without any notice or any other action on the part of the Company
or the Company 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
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<PAGE>
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 the Company or the Company
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 the Company 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," the Company will announce publicly by press release (i) the Net Proceeds
of such Disposition, (ii) the number of outstanding shares of Series A LMG
Common Stock and Series B LMG Common Stock, (iii) the number of shares of Series
A LMG Common Stock and Series B LMG 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, the Company 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.
The Company also will cause to be given to each holder of outstanding
shares of Series A LMG Common Stock and Series B LMG 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 the Company has determined to pay a dividend described in clause (i) of the
first paragraph under "--Mandatory Dividend, Redemption or Conversion of Liberty
Media Group Common Stock" (a "Dividend Election"), (x) the record date for
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 the Company 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 the Company has determined to redeem
shares of Liberty Media Group Common Stock following a Disposition of
substantially all (but not all) of the properties and assets of the Liberty
Media Group as described in clause (ii)(b) of the first paragraph under "--
Mandatory Dividend, Redemption or Conversion of Liberty Media Group Common
Stock" (a "Partial Redemption Election"), (x) a date not earlier than the 40th
trading day and not later than the 50th trading day following the consummation
of such Disposition on which shares of Liberty Media Group Common Stock then
outstanding will be selected for redemption and (y) the anticipated redemption
date (which will not be more than 85 trading days following the consummation of
such Disposition) and (iv) in the event of any conversion as described above
under "--Conversion at the Option of the Company" or as described in clause
(iii) of the first paragraph under "--Mandatory Dividend, Redemption or
Conversion of Liberty Media Group Common Stock" (a "Conversion Election"), (x) a
statement that all outstanding shares of Liberty Media Group Common Stock will
be converted and (y) the conversion date (which will not be more than 85 trading
days following the consummation of the Disposition in the event of conversion
pursuant to the provisions described under "--Mandatory Dividend, Redemption or
Conversion of Liberty Media Group Common Stock" and which will not be more than
120 days after the Appraisal Date in the event of conversion pursuant to the
provisions described under "--Conversion at the Option of the Company"). Each
notice of a Dividend Election, a Full Redemption Election or a Partial
Redemption
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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 Series A LMG Common Stock and Series B LMG Common Stock
and the number of shares of Series A LMG Common Stock and Series B LMG 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 the Company waives such
requirement), are to be surrendered for delivery of certificates for shares of
such capital stock, cash and/or other securities or property; (vi) in the case
of notice to holders of Convertible Securities, a statement to the effect that
holders of such Convertible Securities will be entitled to receive such dividend
(in the case of a Dividend Election) or participate in such redemption (in the
case of a Full Redemption Election) or in the selection of shares for redemption
(in the case of a Partial Redemption Election) only if such holders
appropriately convert, exercise or exchange such Convertible Securities on or
prior to the record date for determining holders entitled to receive such
dividend, the redemption date, or the date fixed for the selection of shares to
be redeemed, respectively, and a statement as to what, if anything, such holder
will be entitled to receive pursuant to the terms of such Convertible Securities
or, if applicable, the provisions described under "--Certain Provisions
Respecting Convertible Securities" if such holder converts, exercises or
exchanges such Convertible Securities following such redemption date or date for
selection of shares to be redeemed, as applicable, and (vii) in the case of a
Partial Redemption Election, a statement that the Company 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, the Company 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 Series A LMG Common Stock and Series B LMG Common Stock held by such holder
to be redeemed, (ii) a statement that such shares of Series A LMG Common Stock
and Series B LMG 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 the Company 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 the Company
pro rata among the holders of Liberty Media Group Common Stock or by such other
method as may be determined by the Company Board of Directors to be equitable.
In the case of a Conversion Election, the Company's notice also will state
(i) the per share number of shares of Series A TCI Group Common Stock or Series
B TCI Group Common Stock, as applicable, to be received with respect to each
share of Series A LMG Common Stock or Series B LMG 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 the Company waives such requirement), are to be
surrendered, (iii) the number of outstanding shares of Series A LMG Common Stock
and Series B LMG Common Stock, the number of Committed Acquisition Shares
issuable and the number of shares of Series A LMG Common Stock and Series B LMG
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
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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 the Company.
If the Company determines to redeem shares of Series A LMG Common Stock and
Series B LMG Common Stock as described above under "--Redemption in Exchange for
Stock of Subsidiary," the Company will promptly cause to be given to each holder
of Series A LMG Common Stock and Series B LMG Common Stock and to each holder of
Convertible Securities convertible into or exercisable or exchangeable for
shares of either such series (unless provision for such notice is otherwise made
pursuant to the terms of such Convertible Securities), a notice setting forth
(i) a statement that all outstanding shares of Liberty Media Group Common Stock
will be redeemed in exchange for shares of common stock of the Liberty Media
Group Subsidiaries, (ii) the redemption date, (iii) the Adjusted Outstanding
Interest Fraction as of a recent date preceding the date of such notice, (iv)
the place or places where certificates for shares of Liberty Media Group Common
Stock, properly endorsed or assigned for transfer (unless the Company 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 Series A LMG Common Stock and Series B LMG Common Stock
and the number of shares of Series A LMG Common Stock and Series B LMG 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 the Company.
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.
The Company 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), the Company 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, the Company 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 the
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Company, 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 Company 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 the Company'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 the Company
will specify certificates for such shares, properly endorsed or assigned for
transfer (unless the Company waives such requirement). The Company will as soon
as practicable after such surrender of certificates representing shares of
Liberty Media Group Common Stock deliver to the person for whose account such
shares were so surrendered, or to the nominee or nominees of such person,
certificates representing the number of whole shares of the kind of capital
stock or cash and/or securities or other property to which such person is
entitled, together with any payment for fractional securities referred to above.
If less than all of the shares of Liberty Media Group Common Stock represented
by any one certificate are to be redeemed, the Company will issue and deliver a
new certificate for the shares of Liberty Media Group Common Stock not redeemed.
The Company will not be required to register a transfer of (i) any shares of
Liberty Media Group Common Stock for a period of 15 trading days next preceding
any selection of shares of Liberty Media Group Common Stock to be redeemed or
(ii) any shares of Liberty Media Group Common Stock selected or called for
redemption. Shares selected for redemption may not thereafter be converted
pursuant to the provisions described under "-Conversion at the Option of the
Holder."
From and after any applicable conversion date or redemption date, all
rights of a holder of shares of Liberty Media Group Common Stock that were
converted or redeemed will cease except for the right, upon surrender of the
certificates representing shares of Liberty Media Group Common Stock, to receive
certificates representing shares of the kind and amount of capital stock or cash
and/or securities or other property for which such shares were converted or
redeemed, together with any payment for fractional securities and such holder
will have no other or further rights in respect of the shares of Liberty Media
Group Common Stock so converted or redeemed, including, but not limited to, any
rights with respect to any cash, securities or other property which are reserved
or otherwise designated by the Company as being held for the satisfaction of the
Company'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, the Company 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.
The Company 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
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shares of Liberty Media Group Common Stock. The Company 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 the Company the amount of any
such tax, or has established to the satisfaction of the Company that such tax
has been paid.
LIQUIDATION RIGHTS
In the event of a liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, after payment or provision for payment of the
debts and other liabilities of the Company and subject to the prior payment in
full of the preferential amounts to which any class or series of Company
Preferred Stock is entitled, (i) the holders of the shares of TCI Group Common
Stock will share equally, on a share for share basis, in a percentage of the
funds of the Company 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 the Company 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 Series A TCI Group
Common Stock and the Series B TCI Group Common Stock, y is the aggregate Market
Capitalization of the Series A LMG Common Stock and the Series B LMG Common
Stock, and z is the aggregate Market Capitalization of the Series A TCI Group
Common Stock, the Series B TCI Group Common Stock, the Series A LMG Common Stock
and the Series B LMG Common Stock. Neither a consolidation, merger nor sale of
assets will be construed to be a "liquidation," "dissolution" or "winding up" of
the Company. The "Market Capitalization" of any class or series of capital stock
of the Company 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 the Company.
DETERMINATIONS BY THE COMPANY BOARD OF DIRECTORS
The Company Charter provides that any determinations made by the Company
Board of Directors under any provision described under "--TCI Group Common Stock
and Liberty Media Group Common Stock" above will be final and binding on all
stockholders of the Company, 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 Company Board of Directors. The
Company will prepare a statement of any such determination by the Company Board
of Directors respecting the fair market value of any properties, assets or
securities and will file such statement with the Secretary of the Company.
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 the Company.
OTHER MATTERS
The DGCL, the Company Charter and the Company's Bylaws contain provisions
which may serve to discourage or make more difficult a change in control of
Company without the support of the Company Board of Directors or without meeting
various other conditions. The principal provisions of the DGCL and the
aforementioned corporate governance documents are outlined below.
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DGCL Section 203, in general, prohibits a "business combination" between a
corporation and an "interested stockholder" within three years of the date such
stockholder became an "interested stockholder," unless (i) prior to such date
the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction which resulted
in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, exclusive of shares owned by
directors who are also officers and by certain employee stock plans or (iii) on
or after such date, the business combination is approved by the board of
directors and authorized by the affirmative vote at a stockholders' meeting of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. The term "business combination" is defined to include,
among other transactions between the interested stockholder and the corporation
or any direct or indirect majority-owned subsidiary thereof, a merger or
consolidation; a sale, pledge, transfer or other disposition (including as part
of a dissolution) of assets having an aggregate market value equal to 10% or
more of either the aggregate market value of all assets of the corporation on a
consolidated basis or the aggregate market value of all the outstanding stock of
the corporation; certain transactions that would increase the interested
stockholder's proportionate share ownership of the stock of any class or series
of the corporation or such subsidiary; and any receipt by the interested
stockholder of the benefit of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation or any such
subsidiary. In general, and subject to certain exceptions, an "interested
stockholder" is any person who is the owner of 15% or more of the outstanding
voting stock (or, in the case of a corporation with classes of voting stock with
disparate voting power, 15% or more of the voting power of the outstanding
voting stock) of the corporation, and the affiliates and associates of such
person. The term "owner" is broadly defined to include any person that
individually or with or through his or its affiliates or associates, among other
things, beneficially owns such stock, or has the right to acquire such stock
(whether such right is 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
Company Charter does not contain any provision "opting out" of the application
of DGCL Section 203 and the Company 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 the Company and any of its
"interested stockholders."
The Company Charter also contains certain provisions which could make a
change in control of Company more difficult. For example, the Company Charter
requires, subject to the rights, if any, of any class or series of Company
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 the Company 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 Company 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 the Company or (iii) the
dissolution of the Company. "Voting Securities" is currently defined as the TCI
Group Common Stock, the Liberty Media Group Common Stock and any class or series
of Company Preferred Stock entitled to vote generally with the holders of
Company Common Stock on matters submitted to stockholders for a vote. The
Company Charter also provides for a Company 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
Company Board of Directors. The holders of TCI Group Common Stock, Liberty Media
Group Common Stock, Class B Preferred Stock and Series C Preferred Stock, voting
together as a single class, vote in elections for directors. (The Company's
Series F Preferred Stock has voting rights, but shares of such series are not
entitled to vote because they are held by subsidiaries of the Company.)
Stockholders of the Company do not have cumulative voting rights.
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The Company Charter authorizes the issuance of 50,000,000 shares of Series
Preferred Stock, of which 48,020,000 shares remained available for designation
as of December 31, 1995 (before giving effect to the designation of the Series G
Preferred Stock and the Series H Preferred Stock). Under the Company Charter,
the Company Board of Directors is authorized, without further action by the
stockholders of the Company, 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 Company Charter, of which
1,243,621,801 and 660,906,868, respectively, remained available for issuance as
of December 31, 1995. The issue and sale of additional 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 the Company, and
the terms of such shares of Series Preferred Stock could be designed in part to
impede the acquisition of such control.
The Company 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 Company Charter or the addition or insertion of other provisions therein.
The Company Charter and the Company'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 Company Preferred Stock, upon the call of the
Secretary of the Company 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
Company Board of Directors. Subject to the rights of any class or series of
Company Preferred Stock, the Company'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 the Company, at the Company'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 the Company'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
Company Board of Directors; and (5) the consent of each nominee to serve as a
director of the Company if so elected. Any actions to remove directors is
required to be for "cause" (as defined in the Company 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 Series A TCI Group Common Stock
offered hereby will be passed upon for the Company by Baker & Botts, L.L.P., 885
Third Avenue, New York, New York 10022-4834. Jerome H. Kern, a partner of Baker
& Botts, L.L.P. is a director of the Company. Mr. Kern holds options to purchase
shares of Series A TCI Group Common Stock and Series A LMG Common Stock.
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 the related
financial statement 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
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financial statements refer to the adoption of Statement of Financial Accounting
Standard 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, 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 accounts,
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 Current Report on Form 8-K
of Tele-Communications, Inc. 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.
25
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses to be borne by the Company in connection with the
distribution of the shares of Series A TCI Group Common Stock registered
pursuant hereto are set forth below. Except for the registration fee, all
expenses are estimated.
Registration Fee............................................ $ 100
Blue Sky Fees and Expenses (including counsel fees)......... 15,000
Printing and Engraving Expenses............................. 50,000
Legal Fees and Expenses..................................... 75,000
Accounting Fees and Expenses................................ 10,000
Miscellaneous............................................... 10,000
--------
Total.................................................... $160,100
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides, generally,
that a corporation shall have the power to indemnify any person who was or is a
party or is threatened to be made a party to any suit or proceeding (except
actions by or in the right of the corporation) by reason of the fact that such
person is or was a director or officer of the corporation against all expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. A corporation may
similarly indemnify such person for expenses actually and reasonably incurred by
him in connection with the defense or settlement of any action or suit by or in
the right of the corporation, provided such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, in the case of claims, issues and matters as to which such
person shall have been adjudged liable to the corporation, provided that a court
shall have determined, upon application, that, despite the adjudication of
liability but in view of all of the facts and circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of Title 8, or (iv) for any transaction from which the director
derived an improper personal benefit. No such provision may eliminate or limit
the liability of a director for any act or omission occurring prior to the date
when such provision becomes effective.
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Article V, Section E of the Company's Restated Certificate of Incorporation
provides as follows:
1. Limitation on Liability.
To the fullest extent permitted by the Delaware General Corporation Law as
the same exists or may hereafter be amended, a director of the Corporation
shall not be liable to the Corporation or any of its stockholders for
monetary damages for breach of fiduciary duty as a director. Any repeal or
modification of this paragraph 1 shall be prospective only and shall not
adversely affect any limitation, right or protection of a director of the
Corporation existing at the time of such repeal or modification.
2. Indemnification.
(a) RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the Corporation or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust, enterprise or nonprofit entity, including service with
respect to employee benefit plans, against all liability and loss suffered
and expenses (including attorneys' fees) reasonably incurred by such
person. Such right of indemnification shall inure whether or not the claim
asserted is based on matters which antedate the adoption of this Section E.
The Corporation shall be required to indemnify a person in connection with
a proceeding (or part thereof) initiated by such person only if the
proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
(b) PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in advance
of its final disposition, provided, however, that the payment of expenses
incurred by a director or officer in advance of the final disposition of
the proceeding shall be made only upon receipt of an undertaking by the
director or officer to repay all amounts advanced if it should be
ultimately determined that the director or officer is not entitled to be
indemnified under this paragraph or otherwise.
(c) CLAIMS. If a claim for indemnification or payment of expenses under
this paragraph is not paid in full within 60 days after a written claim
therefor has been received by the Corporation, the claimant may file suit
to recover the unpaid amount of such claim and, if successful in whole or
in part, shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden of proving
that the claimant was not entitled to the requested indemnification or
payment of expenses under applicable law.
(d) NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this
paragraph shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of this Certificate,
the Bylaws, agreement, vote of stockholders or disinterested directors or
otherwise.
(e) OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust, enterprise or nonprofit entity shall be reduced by any
amount such person may collect as indemnification from such other
corporation, partnership, joint venture, trust, enterprise or nonprofit
entity.
II-2
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Article II, Section 2.9 of the Company's Bylaws also contains an indemnity
provision, requiring the Company to indemnify members of the Board of Directors
and officers of the Company and their respective heirs, personal representatives
and successors in interest for or on account of any action performed on behalf
of the Corporation, to the fullest extent provided by the laws of the State of
Delaware and the Company's Certificate of Incorporation, as then or thereafter
in effect.
The Company has also entered into indemnification agreements with each of
its directors (each director, an "indemnitee"). The indemnification agreements
provide (i) for the prompt indemnification to the fullest extent permitted by
law against any and all expenses, including attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness or participating in (including on appeal), or in
preparing for ("Expenses"), any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation ("Claim"), related to the fact that
such indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company or is or was serving at the Company's request as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by a director or officer in any such
capacity, and against any and all judgments, fines, penalties and amounts paid
in settlement (including all interest, assessments and other charges paid or
payable in connection therewith) of any Claim, unless the Reviewing Party (one
or more members of the Board of Directors or other person appointed by the Board
of Directors, who is not a party to the particular claim, or independent legal
counsel) determines that such indemnification is not permitted under applicable
law and (ii) for the prompt advancement of Expenses, and for reimbursement to
the Company if the Reviewing Party determines that such indemnitee is not
entitled to such indemnification under applicable law. In addition, the
indemnification agreements provide (x) a mechanism through which an indemnitee
may seek court relief in the event the Reviewing Party determines that the
indemnitee would not be permitted to be indemnified under applicable law (and
therefore is not entitled to indemnification or expense advancement under the
indemnification agreement) and (y) indemnification against all expenses
(including attorneys' fees), and advancement thereof if requested, incurred by
the indemnitee in seeking to collect an indemnity claim or advancement of
expenses from the Company or incurred in seeking to recover under a directors'
and officers' liability insurance policy, regardless of whether successful or
not. Furthermore, the indemnification agreements provide that after there has
been a "change in control" in the Company (as defined in the indemnification
agreements), other than a change in control approved by a majority of directors
who were directors prior to such change, then, with respect to all
determinations regarding a right to indemnity and the right to advancement of
Expenses, the Company will seek legal advice only from independent legal counsel
selected by the indemnitee and approved by the Company.
The indemnification agreements impose upon the Company the burden of
proving that an indemnitee is not entitled to indemnification in any particular
case and negate certain presumptions that may otherwise be drawn against an
indemnitee seeking indemnification in connection with the termination of actions
in certain circumstances. Indemnitees' rights under the indemnification
agreements are not exclusive of any other rights they may have under Delaware
law, the Company's Bylaws or otherwise. Although not requiring the maintenance
of directors' and officers' liability insurance, the indemnification agreements
require that indemnitees be provided with the maximum coverage available for any
Company director or officer if there is such a policy.
The Company may purchase liability insurance policies covering its
directors and officers.
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ITEM 16. EXHIBITS
Exhibits Description
4.1 Restated Certificate of Incorporation of the Company, dated
August 4, 1994, as amended on August 4, 1994, August 16, 1994, October 11,
1994, October 21, 1994, January 26, 1995, August 3, 1995 and August 3, 1995
(Incorporated herein by reference to Exhibit 99.1 of the Company's Current
Report on Form 8-K, dated August 10, 1995, Commission File No. 0-20421).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated
herein by reference to Exhibit 4.2 of the Company's registration statement
on Form 8-A, as amended by Form 8-A/A (Amendments No. 1 and 2) Commission
File No. 0-20421).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc.
Series A TCI Group Common Stock, par value $1.00 per share, of the Company
(Incorporated herein by reference to Exhibit 4.3 of Company's registration
statement on Form 8-A, as amended by Form 8-A/A (Amendments No. 1 and 2)
Commission File No. 0-20421).
5 Opinion of Baker & Botts, L.L.P.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG.
23.3 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Price Waterhouse LLP.
23.6 Consent of Baker & Botts, L.L.P. (included in Exhibit 5).
24 Powers of Attorney (included on page II-7).
II-4
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ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Greenwood Village, State of Colorado, on January 16,
1996.
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
-------------------------------
Name: Stephen M. Brett
Title: Executive Vice President
II-6
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Stephen M. Brett, Esq., and Elizabeth M.
Markowski, Esq., and each of them, his true and lawful attorneys-in-fact and
agents with full power of substitution and re-substitution for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them full power and authority, to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, to all intents and purposes and as fully as they might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or their substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons (which
persons constitute a majority of the Board of Directors) in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Bob Magness Chairman of the Board January 16, 1996
- ----------------------------------- and Director
(Bob Magness)
/s/ John C. Malone President and Director January 16, 1996
- ----------------------------------- (Principal Executive
(John C. Malone) Officer)
/s/ Donne F. Fisher Executive Vice President and January 16, 1996
- ----------------------------------- Director (Principal Financial
(Donne F. Fisher) and Accounting Officer)
/s/ John W. Gallivan Director January 16, 1996
- -----------------------------------
(John W. Gallivan)
/s/ Kim Magness Director January 16, 1996
- -----------------------------------
(Kim Magness)
/s/ Robert A. Naify Director January 16, 1996
- -----------------------------------
(Robert A. Naify)
/s/ Jerome H. Kern Director January 16, 1996
- -----------------------------------
(Jerome H. Kern)
/s/ Tony Coelho Director January 16, 1996
- -----------------------------------
(Tony Coelho)
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
4.1 Restated Certificate of Incorporation of the Company, dated
August 4, 1994, as amended on August 4, 1994, August 16, 1994, October 11,
1994, October 21, 1994, January 26, 1995, August 3, 1995 and August 3, 1995
(Incorporated herein by reference to Exhibit 99.1 of the Company's Current
Report on Form 8-K, dated August 10, 1995, Commission File No. 0-20421).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated
herein by reference to Exhibit 4.2 of the Company's registration statement
on Form 8-A, as amended by Form 8-A/A (Amendments No. 1 and 2) Commission
File No. 0-20421).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc.
Series A TCI Group Common Stock, par value $1.00 per share, of the Company
(Incorporated herein by reference to Exhibit 4.3 of Company's registration
statement on Form 8-A, as amended by Form 8-A/A (Amendments No. 1 and 2)
Commission File No. 0-20421).
5 Opinion of Baker & Botts, L.L.P.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG.
23.3 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of Price Waterhouse LLP.
23.6 Consent of Baker & Botts, LLP (included in Exhibit 5).
24 Powers of Attorney (included on page II-7).
II-8
<PAGE>
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS 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 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 DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR
OF ANY SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
-----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION................ 2
INCORPORATION OF DOCUMENTS BY
REFERENCE......................... 2
EXPLANATORY NOTE - VIACOM PROSPECTUS. 3
THE COMPANY.......................... 4
PLAN OF DISTRIBUTION................. 4
DESCRIPTION OF COMMON STOCK.......... 4
LEGAL MATTERS........................ 26
EXPERTS.............................. 26
</TABLE>
================================================================================
================================================================================
TELE-COMMUNICATIONS, INC.
Tele-Communications, Inc. Series A
TCI Group Common Stock
($1.00 par value)
-----------------------------------------
PROSPECTUS
-----------------------------------------
__________ ___, 1996
================================================================================
<PAGE>
[LETTERHEAD OF BAKER & BOTTS APPEARS HERE]
January 17, 1996
EXHIBIT 5
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
Dear Sirs:
As counsel for Tele-Communications, Inc., a Delaware corporation (the
"Company"), we have examined and are familiar with the registration statement on
Form S-3 (the "Registration Statement"), which relates to the registration under
the Securities Act of 1933, as amended, of shares (the "Shares") of the
Company's Tele-Communications, Inc. Series A TCI Group Common Stock, par value
$1.00 per share ("Series A TCI Group Common Stock") which may be delivered from
time to time by Viacom International Inc., a Delaware corporation ("VII Cable"),
pursuant to the terms of the Class A Senior Cumulative Exchangeable Preferred
Stock, par value of $100 per share, of VII Cable (the "VII Cable Preferred
Stock"). As described in the Registration Statement under the heading "Plan of
Distribution", the terms of the VII Cable Preferred Stock permit the holders
thereof to exchange such shares for shares of Series A TCI Group Common Stock at
any time after the fifth anniversary of the date of issuance of the VII Cable
Preferred Stock, and further permit VII Cable, at its option, to deliver shares
of Series A TCI Group Common Stock as dividends on, or upon optional or
mandatory redemption of, the VII Cable Preferred Stock.
In connection therewith, we have examined, among other things, originals,
certified copies or copies otherwise identified to our satisfaction as being
copies of originals, of the Restated Certificate of Incorporation and By-Laws of
the Company, as amended; resolutions of the Company's Board of Directors with
respect to the filing of the Registration Statement and related matters; and
such other documents, records, certificates of public officials and questions of
law as we deemed necessary or appropriate for the purpose of this opinion. In
rendering this opinion, we have relied, to the extent we deem such reliance
appropriate, on certificates of officers of the Company as to factual matters.
We have assumed the
<PAGE>
BAKER & BOTTS L.L.P.
January 17, 1996
Page 2
authenticity of all documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as certified,
conformed or reproduction copies. We have further assumed that there will be no
changes in applicable law between the date of this opinion and the date of
issuance of the Shares.
Based upon the foregoing, we are of the opinion that when the Shares are
delivered (i) by VII Cable as dividends on, (ii) upon optional or mandatory
redemption by VII Cable of, or (iii) upon exchange at the option of the holder
of the VII Cable Preferred Stock, in each case, in accordance with the terms of
the VII Cable Preferred Stock, such Shares will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the reference to us contained therein under the
heading "Legal Matters." In giving the foregoing consent, we do not admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Jerome H. Kern, a partner of Baker & Botts, L.L.P., is a director of the
Company.
Very truly yours,
BAKER & BOTTS, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our reports dated March 27, 1995,
relating to the consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1994, and all related
financial statement schedules, which reports appear in the December 31, 1994
Annual Report on Form 10-K, as amended, of Tele-Communications, Inc. and to the
reference to our firm under the heading "Experts" in the registration statement.
Our reports covering the December 31, 1994 consolidated financial statements
refer to the adoption of Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," in 1994.
KPMG Peat Marwick LLP
Denver, Colorado
January 16, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders of
TeleWest Communications plc:
We consent to incorporation by reference in the registration statement on Form
S-3 of Tele-Communications, Inc. of our report dated 21 March 1995, relating to
the consolidated balance sheet of TeleWest Communications plc and subsidiaries
as of 31 December 1994 and 1993, and the related consolidated statements of
operations and cash flows for each of the years in the three-year period ended
31 December 1994, which report appears in the 31 December 1994 annual report on
Form 10-K of Tele-Communications, Inc., as amended, and to the reference to our
firm under the heading "Experts" in the registration statement.
KPMG
London, England
January 16, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
of Cablevision:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report dated March 24, 1995,
relating to the combined balance sheets of Cablevision (A combination of certain
cable television assets of Cablevision S.A., Televisora Belgrano S.A.,
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, and to the reference to our firm under the heading "Experts" in the
registration statement.
KPMG FINSTERBUSCH PICKENHAYN SIBILLE
Juan Carlos Pickenhayn
Partner
Buenos Aires, Argentina
January 16, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
QVC Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Tele-Communications, Inc. of our report, dated March 4, 1994,
relating to the consolidated balance sheets of QVC, Inc. and subsidiaries as of
January 31, 1994 and 1993, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three-year period ended January 31, 1994, which report appears in the Current
Report on Form 8-K of Tele-Communications, Inc. dated February 3, 1995, as
amended and to the reference to our firm under the heading "Experts" in the
registration statement. Our report refers to a change in the method of
accounting for income taxes.
KPMG Peat Marwick LLP
Philadelphia, Pennsylvania
January 16, 1996
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Tele-Communications, Inc. of our report dated February
4, 1994, relating to the consolidated financial statements of TeleCable
Corporation which appears on page 12 of the TCI Communications, Inc. and Tele-
Communications, Inc. Current Report on Form 8-K dated August 26, 1994. We also
consent to the reference to us under the heading "Experts" in the registration
statement.
Price Waterhouse LLP
Norfolk, Virginia
January 16, 1996
