<PAGE>
As filed with the Securities and Exchange Commission on January 7, 1997
Registration No. 333-07615
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under The Securities Act of 1933
----------------------------
TELE-COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 5619 DTC Parkway 84-1260157
(State or other Englewood, Colorado 80111-3000 (I.R.S. Employer
jurisdiction of (303) 267-5500 Identification No.)
incorporation or
organization) (Address, including zip code,
and telephone number, including area code,
of registrant's principal
executive offices)
----------------------------
Stephen M. Brett, Esq.
Tele-Communications, Inc.
Terrace Tower II
5619 DTC Parkway
Englewood, Colorado 80111-3000
(303) 267-5500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after the effective date of the registration
statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_] ___________________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_] ___________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Proposed
Title of each class of Amount maximum Proposed maximum Amount of
securities to be offering price aggregate offering registration
to be registered registered (1) per share (2) price (2) fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tele-Communications, Inc. Series A TCI Group
Common Stock, par value $1.00 per share..... 1,309,102 $13.1875 $17,263,782.62 $5,232
shares
=================================================================================================================================
</TABLE>
(1) Represents an increase in the maximum number of shares issuable pursuant
to the terms of the Asset Purchase Agreement described herein from 7,529,016
shares to 8,838,117 shares of which 7,529,016 shares previously were
registered.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Act on the basis of the average of the high and
low sales prices reported on the Nasdaq National Market on January 2,
1997.
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 7, 1997
PROSPECTUS
8,838,117 Shares
TELE-COMMUNICATIONS, INC.
Series A TCI Group Common Stock
This Prospectus relates to 8,838,117 shares (the "Shares") of the Tele-
Communications, Inc. Series A TCI Group Common Stock, par value $1.00 per share
(the "TCI Group Series A Common Stock"), of Tele-Communications, Inc., a
Delaware corporation (the "Company" or "TCI"), to be offered and sold from time
to time by Knight-Ridder Cablevision, Inc., a Florida corporation ("KRC" or the
"Selling Stockholder"). See "The Selling Stockholder and the Offered
Shares."
The Company's common stock, par value $1.00 per share (the "TCI Common
Stock"), is comprised of four series: TCI Group Series A Common Stock, Tele-
Communications, Inc. Series B TCI Group Common Stock (the "TCI Group Series B
Common Stock" and, together with the TCI Group Series A Common Stock, the "TCI
Group Common Stock"), Tele-Communications, Inc. Series A Liberty Media Group
Common Stock (the "LMG Series A Common Stock") and Tele-Communications, Inc.
Series B Liberty Media Group Common Stock (the "LMG Series B Common Stock" and,
together with the LMG Series A Common Stock, the "Liberty Media Group Common
Stock").
Both series of TCI Group Common Stock are identical in all respects, except
(i) each share of TCI Group Series B Common Stock has ten votes and each share
of TCI Group Series A Common Stock has one vote and (ii) each share of TCI Group
Series B Common Stock is convertible, at the option of the holder, into one
share of TCI Group Series A Common Stock. Similarly, both series of Liberty
Media Group Common Stock are identical in all respects, except (i) each share of
LMG Series B Common Stock has ten votes and each share of LMG Series A Common
Stock has one vote and (ii) each share of LMG Series B Common Stock is
convertible, at the option of the holder, into one share of LMG Series A Common
Stock. The shares of TCI Group Series A Common Stock and LMG Series A Common
Stock are not convertible into shares of TCI Group Series B Common Stock and LMG
Series B Common Stock, respectively. See "Description of TCI Common
Stock."
Shares of the TCI Group Series A Common Stock, the TCI Group Series B Common
Stock, the LMG Series A Common Stock and the LMG Series B Common Stock are
traded on the Nasdaq National Market under the symbols "TCOMA," "TCOMB," "LBTYA"
and "LBTYB," respectively.
See "Risk Factor" on page 3 of this Prospectus for a discussion of certain
risks that should be considered in connection with an investment in the Shares
offered hereby.
The Shares may be offered for sale and sold by the Selling Stockholder from
time to time in varying amounts (subject to certain restrictions described under
the caption "The Selling Stockholder and the Offered Shares"), on the Nasdaq
National Market at then prevailing prices or in private transactions at prices
and on terms to be determined at the time of sale. The Shares may be sold by
the Selling Stockholder directly or through agents designated from time to time
or to or through broker-dealers designated from time to time. See "Plan of
Distribution." To the extent required, the number of Shares to be sold, the
purchase price, the name of any agent or broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such agents
or broker-dealers with respect to a particular offering will be set forth in a
supplement or supplements to this Prospectus (each, a "Prospectus Supplement").
The aggregate proceeds to the Selling Stockholder from the sale of the Shares so
offered will be the purchase price of the Shares sold less (i) the aggregate
commissions, discounts and other compensation, if any, paid by the Selling
Stockholder to agents or broker-dealers and (ii) certain other expenses of the
offering and sale of the Shares that will be the responsibility of the Selling
Stockholder. See "The Selling Stockholder and the Offered Shares." The Company
will not receive any proceeds from the sale of the Shares. The Company knows of
no selling arrangement between any agent or broker-dealer and the Selling
Stockholder.
The Selling Stockholder and any broker-dealers or agents that participate with
the Selling Stockholder in the distribution of any of the Shares may be deemed
to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any discount or commission received by them
and any profit on the resale of the Shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is January __, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all
amendments and exhibits, referred to as the "Registration Statement") under
the Securities Act, with respect to the Shares. This Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information pertaining to the
Shares and the Company, reference is made to the Registration Statement.
The Registration Statement, including any amendments, schedules and
exhibits filed or incorporated by reference as a part thereof, is available
for inspection and copying as set forth below. Statements contained herein
or in any document incorporated herein by reference concerning the
provisions of any contract or other document are not necessarily complete
and, in each instance, reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement or such
other document. Each such statement is qualified in its entirety by such
reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, information
statements and other information with the Commission. Such reports, proxy
statements, information statements and other information (including the
Registration Statement) filed with the Commission by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the
Commission: Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-
2511; and at Suite 1300, 7 World Trade Center, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a site on the World Wide Web
that contains reports, proxy and information statements and other
information regarding registrants (including the Company) that file
electronically with the Commission. The address of the Commission's Web
site is http://www.sec.gov. Reports, proxy statements, information
statements and other information concerning the Company can also be
inspected at the Nasdaq Stock Market at 1735 K Street, N.W., Washington,
D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the
Commission under the Exchange Act and are hereby incorporated into this
Prospectus by reference and made a part hereof (Commission File No. 0-
20421): (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, (ii) the Company's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1996 (as amended by Form 10-Q/A (Amendment
No. 1)), June 30, 1996 and September 30, 1996, (iii) the Company's Current
Reports on Form 8-K, dated February 9, 1996, June 19, 1996, July 2, 1996,
August 5, 1996, September 3, 1996, September 11, 1996 and December 17,
1996, and (iv) the financial statements and notes thereto of Cablevision (a
combination of certain cable television assets of Cablevision S.A.,
Televisora Belgrano S.A., Construred S.A. and Univent's S.A.) as of
December 31, 1994 and 1993, and for each of the years in the three-year
period ended December 31, 1994, which appear in the Current Report on Form
8-K of the Company, dated April 20, 1995 (as amended by Form 8-K/A
(Amendment No. 1)).
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
hereof and prior to the termination of the offering of the Shares described
in this Prospectus shall be deemed to be incorporated herein by reference
and to be a part hereof from the respective dates of the filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
2
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon the written or
oral request of such person, a copy of any and all of the documents
incorporated by reference herein, other than certain exhibits to such
documents (unless such exhibits are specifically incorporated by reference
into the documents that this Prospectus incorporates). Such requests
should be addressed to Stephen M. Brett, Esq., Executive Vice President and
General Counsel, Tele-Communications, Inc., Terrace Tower II, 5619 DTC
Parkway, Englewood, Colorado 80111-3000; telephone (303) 267-5500.
RISK FACTOR
The Company incurred net losses of $171 million and $5 million for
the years ended December 31, 1995 and 1993, respectively, and a net loss of
$438 million and $107 million for the nine months ended September 30, 1996
and 1995, respectively. The Company had net earnings of $62 million for
the year ended December 31, 1994. Notwithstanding the losses it has
incurred, the Company has been able to, and expects to continue to be able
to, satisfy its debt service and other obligations as and when they become
due. The Company's operating cash flow (operating income before
depreciation, amortization and other non-cash credits or charges) ($1,975
million, $1,798 million and $1,858 million for the years ended December 31,
1995, 1994 and 1993, respectively, and $1,706 million and $1,510 million
for the nine months ended September 30, 1996 and 1995, respectively) has
historically been sufficient to cover its interest expense ($1,010 million,
$785 million and $731 million for the years ended December 31, 1995, 1994
and 1993, respectively, and $803 million and $746 million for the nine
months ended September 30, 1996 and 1995, respectively). The Company's
interest coverage ratios for the years ended December 31, 1995, 1994 and
1993 were 196%, 229% and 254%, respectively and for the nine months ended
September 30, 1996 and 1995 were 212% and 202%, respectively. Operating
cash flow is a measure of value and borrowing capacity within the cable
television industry and is not intended to be a substitute for cash flows
provided by operating activities, a measure of performance prepared in
accordance with generally accepted accounting principles, and should not be
relied upon as such. Operating cash flow, as defined, does not take into
consideration substantial costs of doing business, such as interest
expense, and should not be considered in isolation to other measures of
performance.
Another measure of liquidity is net cash provided by operating
activities as reflected in the Company's consolidated statements of cash
flows. Net cash provided by operating activities ($957 million, $908
million and $1,247 million for the years ended December 31, 1995, 1994 and
1993, respectively, and $844 million and $670 million for the nine months
ended September 30, 1996 and 1995, respectively) reflects net cash from the
operations of the Company available for the Company's liquidity needs after
taking into consideration the aforementioned substantial costs of doing
business not reflected in operating cash flow. Amounts expended by the
Company for its investing activities exceed net cash provided by operating
activities.
THE COMPANY
The Company, through its subsidiaries and affiliates, is principally
engaged in the construction, acquisition, ownership and operation of cable
television systems and the provision of video entertainment, information
and home shopping programming services to various video distribution media,
principally cable television systems. The Company is one of the largest
providers of cable television services in the United States. The Company
also has interests in cable and telecommunications operations and
television programming in certain international markets, as well as
investments in companies and joint ventures involved in developing and
providing programming for new television and telecommunications
technologies. The Company is organized into four principal business
groups: Domestic Cable and Communications; Programming; International
Cable and Programming; and Technology/Venture Capital. The Company is a
Delaware corporation and its principal executive offices are located at
Terrace Tower II, 5619 DTC Parkway, Englewood, Colorado 80111-3000;
telephone (303) 267-5500.
THE SELLING STOCKHOLDER AND THE OFFERED SHARES
3
<PAGE>
Background. Pursuant to an Asset Purchase Agreement, dated as of March
18, 1996, as amended (as amended, the "Purchase Agreement"), by and between
KRC, KRC-SNJ, Inc., a Delaware corporation, KRC-NJFT, Inc., a Delaware
corporation and Knight-Ridder Investment Company, a Delaware corporation,
and the Company, the Company (i) acquired from the Selling Stockholder and
its affiliates certain assets consisting primarily of ownership interests
in entities that are directly or indirectly engaged in the business of
providing cable television service to subscribers in various areas of the
United States and a Subordinated Note, dated November 14, 1995, made by TKR
Cable Company, a Colorado general partnership, and payable to the order of
Knight-Ridder Investment Company (the "Acquired Assets") and (ii) assumed
certain liabilities relating to the Acquired Assets. Under the terms of the
Purchase Agreement, a portion of the purchase price for the Acquired Assets
was paid by the delivery to the Selling Stockholder of an aggregate of
16,122,614 shares of TCI Group Series A Common Stock (the "Transaction
Shares"). The number of Transaction Shares delivered by the Company was
calculated pursuant to the Purchase Agreement by dividing the portion of
the purchase price to be paid in shares of TCI Group Series A Common Stock
by the average of the closing market prices of a share of TCI Group Series
A Common Stock on the Nasdaq National Market on each trading day during the
period commencing on the thirtieth trading day prior to the closing of the
acquisition (the "Closing Date") and ending on the tenth trading day prior
to the Closing Date. In calculating the maximum number of Transaction
Shares which are issuable at the Closing Date, such average of closing
market prices was assumed, pursuant to the Purchase Agreement, to have a
minimum value of $16.00561797.
Shares Offered by the Selling Stockholder. The Transaction Shares
received by the Selling Stockholder, including the Shares, constitute
restricted securities and cannot be transferred unless they are registered
under the Securities Act or an exemption from registration is available.
In connection with the execution of the Purchase Agreement, the Company and
the Selling Stockholder entered into a Registration Rights Agreement, dated
as of March 18, 1996 (the "Registration Rights Agreement"), pursuant to
which the Company agreed, subject to certain limitations, to file the
Registration Statement of which this Prospectus forms a part in order to
permit the resale of the Shares from time to time by the Selling
Stockholder and to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration
Statement effective until the earlier of the third anniversary of the
Closing Date or such time as all of the Shares offered hereby have been
sold. Also, pursuant to the Registration Rights Agreement, the Company
agreed, subject to certain limitations, to prepare and file with the
Commission another registration statement (the "Additional Registration
Statement") in order to permit the resale by the Selling Stockholder of (i)
the remaining 7,284,496 Transaction Shares not included in the Registration
Statement of which this Prospectus forms a part and (ii) approximately
1,600,000 shares (the "Additional Shares") of TCI Group Series A Common
Stock which are expected to be issued to the Selling Stockholder pursuant
to the Purchase Agreement in connection with the purchase by the Company of
certain ownership interests held by the Selling Stockholder in an entity
indirectly engaged in the business of providing cable television service to
subscribers. The Company has agreed to file the Additional Registration
Statement with the Commission and to cause it to be declared effective
under the Securities Act not later than the second anniversary of the
Closing Date. Notwithstanding the foregoing, the Company may, in lieu of
filing the Additional Registration Statement, purchase the remaining
7,284,496 Transaction Shares and the Additional Shares otherwise required
to be registered thereunder, at a price determined pursuant to the
Registration Rights Agreement.
Under certain circumstances set forth in the Registration Rights
Agreement, the Company may, upon notice to the Selling Stockholder, require
the suspension by the Selling Stockholder of the distribution of any Shares
for a reasonable period of time not to exceed 15 consecutive business days
(a "Blackout Period"). There may not be more than four Blackout Periods in
any period of twelve consecutive calendar months, and the number of days
the Selling Stockholder may be required to suspend distributions of Shares
may not exceed 45 business days in any period of twelve consecutive
calendar months.
Pursuant to the Registration Rights Agreement, the Company has agreed
to pay all expenses in connection with the registration of the offer and
sale of the Shares (including, without limitation, all registration and
filing fees incurred in connection with the filing of this Registration
Statement with the Commission and state securities commissioners), other
than (i) discounts and commissions and transfer taxes attributable to the
sale of any of the Shares and (ii) fees and
4
<PAGE>
disbursements of counsel or of any advisors retained by the Selling
Stockholder in connection with the registration of the offer and sale of
the Shares.
The Company has agreed to indemnify the Selling Stockholder against
certain liabilities that may arise in connection with any offer and sale of
the Shares, including liabilities under the Securities Act, and to
contribute to payments that the Selling Stockholder may be required to make
in respect thereof.
Neither the Company nor any of its affiliates has had within the past
three years any material relationship with the Selling Stockholder, except
that subsidiaries of each of the Company and the Selling Stockholder were
partners in various partnerships which directly or indirectly operated
cable television systems. All of the interests of the Selling Stockholder
in those partnerships were purchased by the Company pursuant to the
Purchase Agreement. Any additional material relationships between the
Company or any of its affiliates, on the one hand, and the Selling
Stockholder, on the other, within three years prior to the date of a sale
by the Selling Stockholder hereunder will be described in the Prospectus
Supplement.
As of the date hereof, KRC owns 16,122,614 shares of TCI Group Series
A Common Stock (which represents approximately 2.68% of the outstanding
shares of such stock based on the number of shares of TCI Group Series A
Common Stock outstanding on September 30, 1996). The number of Shares sold
by KRC and (if one percent or more) the percentage of the outstanding
shares of TCI Group Series A Common Stock owned by KRC after completion of
any offering hereunder will be specified in the Prospectus Supplement
relating to such sale.
A copy of the Registration Rights Agreement has been filed as exhibit
99.1, to the Registration Statement and can be obtained in the manner
described under "Available Information."
PLAN OF DISTRIBUTION
Subject to the restrictions described under the caption "The Selling
Stockholder and the Offered Shares," the Shares may be offered for sale and
sold by the Selling Stockholder from time to time in one or more public or
private transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at prices determined on a negotiated or
competitive bid basis. The Shares may be sold by the Selling Stockholder
directly or through agents designated from time to time or to or through
broker-dealers designated from time to time. The Shares may be sold
through a broker-dealer acting as agent or broker for the Selling
Stockholder, or to a broker-dealer acting as principal. In the latter
case, the broker-dealer may then resell such Shares to the public at
varying prices to be determined by such broker-dealer at the time of
resale.
The Company has been advised by the Selling Stockholder that it has
not, as of the date of this Prospectus, entered into any arrangement with
an agent or broker-dealer for the sale of the Shares.
The Selling Stockholder may also sell all or a portion of the Shares
pursuant to Rule 144 promulgated under the Securities Act, to the extent
that such sales may be made in compliance with such Rule.
The Selling Stockholder and any agents or broker-dealers that
participate with the Selling Stockholder in the distribution of any of the
Shares may be deemed to be "underwriters" within the meaning of the
Securities Act, and any discount or commission received by them and any
profit on the resale of the Shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act.
In connection with a sale of Shares, the following information will,
to the extent then required, be provided in the Prospectus Supplement
relating to such sale: the number of Shares to be sold, the purchase
price, the name of any agent or broker-dealer, and any applicable
commissions, discounts or other items constituting compensation to such
agents or broker-dealers with respect to the particular sale.
5
<PAGE>
DESCRIPTION OF TCI COMMON STOCK
The following description of certain terms of the TCI Common Stock
does not purport to be complete and is qualified in its entirety by
reference to the Restated Certificate of Incorporation, as amended, of TCI
(the "TCI Charter"), which is an exhibit to the Registration Statement.
General
The TCI Charter provides, among other things, that TCI is authorized
to issue 2,725,000,000 shares of common stock, par value $1.00 per share,
of which 1,750,000,000 shares are designated Tele-Communications, Inc.
Series A TCI Group Common Stock, 150,000,000 shares are designated Tele-
Communications, Inc. Series B TCI Group Common Stock, 750,000,000 shares
are designated Tele-Communications, Inc. Series A Liberty Media Group
Common Stock, and 75,000,000 shares are designated Tele-Communications,
Inc. Series B Liberty Media Group Common Stock.
As of September 30, 1996, 584,450,633 shares of TCI Group Series A
Common Stock, 84,663,501 shares of TCI Group Series B Common Stock,
146,078,965 shares of LMG Series A Common Stock and 21,192,269 shares of
LMG Series B Common Stock (in each case net of shares held by subsidiaries
of TCI) had been issued and were outstanding and 100,524,365 shares of TCI
Group Series A Common Stock were held by subsidiaries of TCI. As of that
date, 119,821,579 shares of TCI Group Series A Common Stock and 20,967,181
shares of LMG Series A Common Stock were reserved for issuance upon
conversion, exchange or exercise of outstanding convertible or exchangeable
securities and options. In addition, TCI has reserved a number of shares
of TCI Group Series A Common Stock equal to the number of shares of TCI
Group Series B Common Stock outstanding, and a number of shares of LMG
Series A Common Stock equal to the number of shares of LMG Series B Common
Stock outstanding, for issuance upon conversion, at the option of the
holder, of the TCI Group Series B Common Stock and LMG Series B Common
Stock, respectively. Additionally, subsidiaries of TCI own shares of the
Company's Convertible Redeemable Participating Preferred Stock, Series F
(the "Series F Preferred Stock") which is convertible into 358,323,046
shares of TCI Group Series A Common Stock.
The TCI Charter also authorizes 52,375,096 shares of preferred stock
(the "TCI Preferred Stock"), of which 700,000 shares are designated Class A
Preferred Stock, par value $0.01 per share (the "Class A Preferred Stock"),
1,675,096 shares are designated Class B 6% Cumulative Redeemable
Exchangeable Junior Preferred Stock, par value $.01 per share (the "Class B
Preferred Stock"), and 50,000,000 shares are designated Series Preferred
Stock, par value $.01 per share (the "Series Preferred Stock"), issuable in
series. All of the shares of Class A Preferred Stock have previously been
redeemed and retired and may not be reissued, thereby reducing the number
of authorized shares of TCI Preferred Stock. Of the Series Preferred
Stock, as of September 30, 1996, 80,000 shares are designated Convertible
Preferred Stock, Series C (the "Series C Preferred Stock"), 1,000,000
shares are designated Convertible Preferred Stock, Series D (the "Series D
Preferred Stock"), 400,000 shares are designated Redeemable Convertible
Preferred Stock, Series E (the "Series E Preferred Stock"), 500,000 shares
are designated Series F Preferred Stock, 7,259,380 shares are designated
Redeemable Convertible TCI Group Preferred Stock, Series G (the "Series G
Preferred Stock") and 7,259,380 shares are designated Redeemable
Convertible Liberty Media Group Preferred Stock, Series H (the "Series H
Preferred Stock"). As of September 30, 1996, 1,620,026 shares of Class B
Preferred Stock, 70,575 shares of Series C Preferred Stock, 997,222 shares
of Series D Preferred Stock, 278,307 shares of Series F Preferred Stock,
6,696,160 shares of Series G Preferred Stock and 6,696,160 shares of Series
H Preferred Stock had been issued and were outstanding. All of the shares
of Series E Preferred Stock have previously been redeemed and retired with
the effect that such shares have been restored to the status of authorized
and unissued shares of Series Preferred Stock and may be reissued as
shares of another series of Series Preferred Stock, but not as Series E
Preferred Stock. All of the outstanding shares of Series F Preferred Stock
are held by subsidiaries of TCI. Approximately 33,901,240 shares of Series
Preferred Stock remain available for designation pursuant to the TCI
Charter as of September 30, 1996. The rights evidenced by the TCI Common
Stock are subject to the prior preferences and rights of the TCI Preferred
Stock.
Certain Definitions
6
<PAGE>
As used herein, the following terms have the meanings specified
below:
"Committed Acquisition Shares" means (a) the shares of LMG
Series A Common Stock that TCI had, prior to the record date for the
Distribution, agreed to issue, but as of such record date had not issued,
and (b) the shares of LMG Series A Common Stock that are issuable upon
conversion, exercise or exchange of Convertible Securities that TCI had,
prior to the record date for the Distribution, agreed to issue, but as of
such record date had not issued, in each case including obligations of TCI
to issue shares of TCI's Class A Common Stock, par value $1.00 per share
(which has been redesignated TCI Group Series A Common Stock), which as a
result of the Distribution, constitute obligations to issue, among other
securities, LMG Series A Common Stock or Convertible Securities which are
convertible into or exercisable or exchangeable for LMG Series A Common
Stock; provided, however that Committed Acquisition Shares will not include
any shares of Liberty Media Group Common Stock issuable upon conversion,
exercise or exchange of Pre-Distribution Convertible Securities. The type
and amount of Committed Acquisition Shares issuable will be appropriately
adjusted to reflect subdivisions and combinations of the LMG Series A
Common Stock and dividends or distributions of shares of LMG Series A
Common Stock or LMG Series B Common Stock to holders of LMG Series A Common
Stock and other reclassifications of the LMG Series A Common Stock, in each
case occurring (or the record date for which occurs) after the
Distribution.
"Convertible Securities" means any securities of TCI (other than
any series of TCI Common Stock) that are convertible into, exchangeable for
or evidence the right to purchase any shares of any series of TCI Common
Stock, whether upon conversion, exercise, exchange, pursuant to
antidilution provisions of such securities or otherwise.
"DGCL" means the General Corporation Law of the State of
Delaware.
The "Distribution" means the distribution paid by TCI on August
10, 1995 of one-fourth of one share of LMG Series A Common Stock on each
outstanding share of TCI Group Series A Common Stock and one-fourth of one
share of LMG Series B Common Stock on each outstanding share of TCI Group
Series B Common Stock to holders of record on August 4, 1995.
The "Inter-Group Interest" means any equity value of TCI
attributable to the Liberty Media Group that is not represented by
outstanding shares of Liberty Media Group Common Stock. The Inter-Group
Interest is represented by the Number of Shares Issuable with Respect to
the Inter-Group Interest.
The "Inter-Group Interest Fraction" means a fraction the
numerator of which is the Number of Shares Issuable with Respect to the
Inter-Group Interest and the denominator of which is the sum of such Number
of Shares Issuable with Respect to the Inter-Group Interest and the
aggregate number of shares of Liberty Media Group Common Stock outstanding.
The "Liberty Media Group" means:
(a) the interest of TCI or any of its subsidiaries in Liberty
Media Corporation or any of its subsidiaries (including any successor
thereto by merger, consolidation or sale of all or substantially all of its
assets, whether or not in connection with a Related Business Transaction
(as defined below under "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock")) and their
respective properties and assets,
(b) all assets and liabilities of TCI or any of its subsidiaries
to the extent attributed to any of the properties or assets referred to in
clause (a) of this sentence, whether or not such assets or liabilities are
assets and liabilities of Liberty Media Corporation or any of its
subsidiaries (or a successor as described in clause (a) of this sentence),
(c) all assets and properties contributed or otherwise
transferred to the Liberty Media Group from the TCI Group, and
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(d) the interest of TCI or any of its subsidiaries in the
businesses, assets and liabilities acquired by TCI or any of its
subsidiaries for the Liberty Media Group, as determined by the Board of
Directors of TCI (the "TCI Board of Directors");
provided that (i) from and after any dividend or other distribution with respect
to any shares of Liberty Media Group Common Stock (other than a dividend or
other distribution payable in shares of Liberty Media Group Common Stock, with
respect to which adjustment will be made as described in clause (a) of the
definition of "Number of Shares Issuable with Respect to the Inter-Group
Interest," or in other securities of TCI attributed to the Liberty Media Group
for which provision will be made as described in the penultimate sentence of
this definition), the Liberty Media Group will no longer include an amount of
assets or properties equal to the aggregate amount of such kind of assets or
properties so paid in respect of shares of Liberty Media Group Common Stock
multiplied by a fraction the numerator of which is equal to the Inter-Group
Interest Fraction in effect immediately prior to the record date for such
dividend or other distribution and the denominator of which is equal to the
Outstanding Interest Fraction in effect immediately prior to the record date for
such dividend or other distribution and (ii) from and after any transfer of
assets or properties from the Liberty Media Group to the TCI Group, the Liberty
Media Group will no longer include the assets or properties so transferred. If
TCI pays a dividend or makes any other distribution with respect to shares of
Liberty Media Group Common Stock payable in securities of TCI attributed to the
Liberty Media Group other than Liberty Media Group Common Stock, the TCI Group
will be deemed to hold an amount of such other securities equal to the amount so
distributed multiplied by the fraction specified in clause (i) of this
definition (determined as of a time immediately prior to the record date for
such dividend or other distribution), and to the extent interest or dividends
are paid or other distributions are made on such other securities so distributed
to the holders of Liberty Media Group Common Stock, the Liberty Media Group will
no longer include a corresponding ratable amount of the kind of assets paid as
such interest or dividends or other distributions in respect of such securities
so deemed to be held by the TCI Group. TCI may also, to the extent any such
other securities constitute Convertible Securities which are at the time
convertible, exercisable or exchangeable, cause such Convertible Securities
deemed to be held by the TCI Group to be deemed to be converted, exercised or
exchanged (and to the extent the terms of such Convertible Securities require
payment or delivery of consideration in order to effect such conversion,
exercise or exchange, the Liberty Media Group will in such case include an
amount of the kind of properties or assets required to be paid or delivered as
such consideration for the amount of the Convertible Securities deemed
converted, exercised or exchanged as if such Convertible Securities were
outstanding), in which case such Convertible Securities will no longer be deemed
to be held by the TCI Group or attributed to the Liberty Media Group.
"Market Value" of any class or series of capital stock of TCI on
any day means the average of the high and low reported sale prices regular way
of a share of such class or series on such day (if such day is a trading day,
and if such day is not a trading day, on the trading day immediately preceding
such day) or in case no such reported sale takes place on such trading day the
average of the reported closing bid and asked prices regular way of a share of
such class or series on such trading day, in either case on the Nasdaq National
Market, or if the shares of such class or series are not quoted on such Nasdaq
National Market on such trading day, the average of the closing bid and asked
prices of a share of such class or series in the over-the-counter market on such
trading day as furnished by any New York Stock Exchange member firm selected
from time to time by TCI, or if such closing bid and asked prices are not made
available by any such New York Stock Exchange member firm on such trading day,
the market value of a share of such class or series as determined by the TCI
Board of Directors; provided that for purposes of determining the ratios
described under "--Conversion and Redemption--Conversion of Liberty Media Group
Common Stock at the Option of TCI" and "--Conversion and Redemption--Mandatory
Dividend, Redemption or Conversion of Liberty Media Group Common Stock" and "--
Liquidation Rights," (a) the "Market Value" of any share of any series of TCI
Common Stock on any day prior to the "ex" date or any similar date for any
dividend or distribution paid or to be paid with respect to such series of TCI
Common Stock will be reduced by the fair market value of the per share amount of
such dividend or distribution as determined by the TCI Board of Directors and
(b) the "Market Value" of any share of any series of TCI Common Stock on any day
prior to (i) the effective date of any subdivision (by stock split or otherwise)
or combination (by reverse stock split or otherwise) of outstanding shares of
such series of TCI Common Stock or (ii) the "ex" date or any similar date for
any dividend or distribution with respect to any such series of TCI Common Stock
in shares of such
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series of TCI Common Stock will be appropriately adjusted to reflect such
subdivision, combination, dividend or distribution.
The "Number of Shares Issuable with Respect to the Inter-Group
Interest" is currently zero and will from time to time be
(a) adjusted as appropriate to reflect subdivisions (by
stock split or otherwise) and combinations (by reverse stock split or
otherwise) of the LMG Series A Common Stock and dividends or
distributions of shares of LMG Series A Common Stock or LMG Series B
Common Stock to holders of LMG Series A Common Stock and other
reclassifications of LMG Series A Common Stock,
(b) decreased (but not to less than zero) by (i) the
aggregate number of shares of LMG Series A Common Stock issued or sold
by TCI after the Distribution other than Committed Acquisition Shares,
the proceeds of which are attributed to the TCI Group, (ii) the
aggregate number of shares of LMG Series A Common Stock issued or
delivered upon conversion, exercise or exchange of Convertible
Securities (other than Pre-Distribution Convertible Securities and
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares), the proceeds of which
are attributed to the TCI Group, (iii) the aggregate number of shares of
LMG Series A Common Stock issued or delivered by TCI as a dividend or
distribution to holders of TCI Group Series A Common Stock and TCI Group
Series B Common Stock, (iv) the aggregate number of shares of LMG Series
A Common Stock issued or delivered upon the conversion, exercise or
exchange of any Convertible Securities (other than Pre-Distribution
Convertible Securities and Convertible Securities which are convertible
into or exercisable or exchangeable for Committed Acquisition Shares)
issued or delivered by TCI after the Distribution as a dividend or
distribution or by reclassification or exchange to holders of TCI Group
Series A Common Stock and TCI Group Series B Common Stock and (v) the
aggregate number of shares of LMG Series A Common Stock (rounded, if
necessary, to the nearest whole number), equal to the aggregate fair
value (as determined by the TCI Board of Directors) of assets or
properties attributed to the Liberty Media Group that are transferred
from the Liberty Media Group to the TCI Group in consideration of a
reduction in the Number of Shares Issuable with Respect to the Inter-
Group Interest, divided by the Market Value of one share of LMG Series A
Common Stock as of the date of such transfer, and
(c) increased by (i) the aggregate number of any shares of
LMG Series A Common Stock and LMG Series B Common Stock which are
retired or otherwise cease to be outstanding following their purchase
with funds attributed to the TCI Group, (ii) a number (rounded, if
necessary, to the nearest whole number), equal to the fair value (as
determined by the TCI Board of Directors) of assets or properties,
theretofore attributed to the TCI Group that are contributed to the
Liberty Media Group in consideration of an increase in the Number of
Shares Issuable with Respect to the Inter-Group Interest, divided by the
Market Value of one share of LMG Series A Common Stock as of the date of
such contribution and (iii) the aggregate number of shares of LMG Series
A Common Stock and LMG Series B Common Stock into or for which
Convertible Securities are deemed to be converted, exercised or
exchanged pursuant to the last sentence of the definition of "TCI
Group."
TCI will not issue or sell shares of LMG Series B Common Stock in respect
of a reduction in the Number of Shares Issuable with Respect to the Inter-
Group Interest. Whenever a change in the Number of Shares Issuable with
Respect to the Inter-Group Interest occurs, TCI will prepare and file a
statement of such change with the Secretary of TCI.
The "Outstanding Interest Fraction" means a fraction the
numerator of which is the aggregate number of shares of Liberty Media Group
Common Stock outstanding and the denominator of which is the sum of such
aggregate number of shares of Liberty Media Group Common Stock outstanding
and the Number of Shares Issuable with Respect to the Inter-Group Interest.
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"Pre-Distribution Convertible Securities" means Convertible
Securities that were outstanding on the record date for the Distribution
and were, prior to such date, convertible into or exercisable or
exchangeable for shares of TCI's Class A Common Stock, par value $1.00 per
share (which has been redesignated TCI Group Series A Common Stock).
The "TCI Group" means as of any date of determination thereof:
(a) the interest of TCI or any of its subsidiaries in all of
the businesses in which TCI or any of its subsidiaries (or any of their
predecessors or successors) is or has been engaged, directly or
indirectly, and the respective assets and liabilities of TCI or any of
its subsidiaries, other than any businesses, assets or liabilities of the
Liberty Media Group;
(b) a proportionate interest in the businesses, assets and
liabilities of the Liberty Media Group equal to the Inter-Group Interest
Fraction as of such date;
(c) from and after any dividend or other distribution with
respect to shares of Liberty Media Group Common Stock (other than a
dividend or other distribution payable in shares of Liberty Media Group
Common Stock, with respect to which adjustment will be made as described
in clause (a) of the definition of "Number of Shares Issuable with
Respect to the Inter-Group Interest," or in other securities of TCI
attributed to the Liberty Media Group, for which provision will be made
as described in the penultimate sentence of this definition), an amount
of assets or properties theretofore included in the Liberty Media Group
equal to the aggregate amount of such kind of assets or properties so
paid in respect of such dividend or other distribution with respect to
shares of Liberty Media Group Common Stock multiplied by a fraction the
numerator of which is equal to the Inter-Group Interest Fraction in
effect immediately prior to the record date for such dividend or other
distribution and the denominator of which is equal to the Outstanding
Interest Fraction in effect immediately prior to the record date for such
dividend or other distribution; and
(d) any assets or properties transferred from the Liberty
Media Group to the TCI Group;
provided that, from and after any contribution or transfer of any assets or
properties from the TCI Group to the Liberty Media Group, the TCI Group will
no longer include such assets or properties so contributed or transferred
(other than pursuant to its interest in the businesses, assets and
liabilities of the Liberty Media Group described in clause (b) above). If TCI
pays a dividend or makes any other distribution with respect to shares of
Liberty Media Group Common Stock payable in other securities of TCI
attributed to the Liberty Media Group, the TCI Group will be deemed to hold
an amount of such other securities equal to the amount so distributed
multiplied by the fraction specified in clause (c) of this definition
(determined as of a time immediately prior to the record date for such
dividend or other distribution), and to the extent interest or dividends are
paid or other distributions are made on such other securities so distributed
to holders of Liberty Media Group Common Stock, the TCI Group will include a
corresponding ratable amount of the kind of assets paid as such interest or
dividends or other distributions in respect of such securities so deemed to
be held by the TCI Group. TCI may also, to the extent any such other
securities constitute Convertible Securities which are at the time
convertible, exercisable or exchangeable, cause such Convertible Securities
deemed to be held by the TCI Group to be deemed to be converted, exercised or
exchanged (and to the extent the terms of such Convertible Securities require
payment or delivery of consideration in order to effect such conversion,
exercise or exchange, the TCI Group will in such case no longer include an
amount of the kind of properties or assets required to be paid or delivered
as such consideration for the amount of the Convertible Securities deemed
converted, exercised or exchanged as if such Convertible Securities were
outstanding), in which case such Convertible Securities will no longer be
deemed to be held by the TCI Group or attributed to the Liberty Media Group.
Voting Rights
Holders of TCI Group Series A Common Stock are entitled to one
vote for each share of such stock held, holders of TCI Group Series B
Common Stock are entitled to ten votes for each share of such stock held,
holders of
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LMG Series A Common Stock are entitled to one vote for each share of such
stock held and holders of LMG Series B Common Stock are entitled to ten
votes for each share of such stock held, on all matters presented to such
stockholders. Except as may otherwise be required by the laws of the State
of Delaware or, with respect to any class or series of TCI Preferred Stock,
in the TCI Charter (including any resolution or resolutions providing for
the establishment of such class or series pursuant to authority vested in
the TCI Board of Directors by the TCI Charter), the holders of TCI Group
Common Stock and the holders of Liberty Media Group Common Stock and the
holders of each class or series of TCI Preferred Stock entitled to vote on
a particular matter will vote as one class for all purposes. See "--Other
Matters."
Neither the holders of TCI Group Series A Common Stock or TCI
Group Series B Common Stock, nor the holders of LMG Series A Common Stock
or LMG Series B Common Stock, have any rights to vote as a separate class
or series on any matter coming before the stockholders of TCI, except with
respect to certain limited class and series voting rights provided under
the DGCL. Under the DGCL, the approval of the holders of a majority of the
outstanding shares of any class of capital stock of a corporation, voting
separately as a class, is required to approve any amendment to the charter
that would alter or change the powers, preferences or special rights of the
shares of such class so as to affect them adversely, provided that, if any
amendment would alter or change the powers, preferences or special rights
of one or more series of the class so as to affect them adversely, but
would not so affect the entire class, then only the shares of the series so
affected by the amendment would be entitled to vote thereon separately as a
class.
Dividends
Subject to the prior payment of dividends on, and other rights
of, any of the outstanding shares of TCI Preferred Stock, dividends may be
paid as determined by the TCI Board of Directors (i) on the TCI Group
Common Stock out of the lesser of (x) the TCI Group Available Dividend
Amount and (y) funds of TCI legally available therefor under the DGCL and
(ii) on the Liberty Media Group Common Stock out of the lesser of (x) the
Liberty Media Group Available Dividend Amount and (y) funds of TCI legally
available therefor under the DGCL. Under the DGCL the amount of the funds
of TCI legally available for the payment of dividends on any series of TCI
Common Stock is determined on the basis of the entire corporation and not
just the Liberty Media Group or the TCI Group. Consequently, the amount of
legally available funds will be reduced by the amount of any net losses of
the Liberty Media Group or the TCI Group and any dividends or distributions
on, or repurchases of, the TCI Group Common Stock or the Liberty Media
Group Common Stock and dividends on, or certain repurchases of, TCI
Preferred Stock. Certain loan agreements to which certain subsidiaries of
TCI are parties or are subject contain restricted payment provisions that
limit the amount of dividends, other than stock dividends, that those
companies may pay. Future loan agreements may also contain similar
restrictions and limits.
The "TCI Group Available Dividend Amount," as of any date, means
either (a) the excess of (i) an amount equal to the total assets of the TCI
Group less the total liabilities (not including preferred stock) of the TCI
Group as of such date over (ii) the aggregate par value of, or any greater
amount determined to be capital in respect of, all outstanding shares of
TCI Group Common Stock and each class or series of TCI Preferred Stock
attributed to the TCI Group or (b) in case there is no such excess, an
amount equal to TCI Earnings (Loss) Attributable to the TCI Group (if
positive) for the fiscal year in which such date occurs and/or the
preceding fiscal year. "TCI Earnings (Loss) Attributable to the TCI
Group," for any period, means the net earnings or loss of the TCI Group for
such period determined on a basis consistent with the determination of the
net earnings or loss of the TCI Group for such period as presented in the
combined financial statements of the TCI Group for such period, including
income and expenses of TCI attributed to the operations of the TCI Group on
a substantially consistent basis, including without limitation, corporate
administrative costs, net interest and income taxes. The TCI Group
Available Dividend Amount is intended to be similar to the amount that
would be legally available for the payment of dividends on the TCI Group
Common Stock under the DGCL if the TCI Group were a separate Delaware
corporation. There can be no assurance that there will be a TCI Group
Available Dividend Amount.
The "Liberty Media Group Available Dividend Amount," as of any
date, means the product of the Outstanding Interest Fraction and either (a)
the excess of (i) an amount equal to the total assets of the Liberty Media
Group less the
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total liabilities (not including preferred stock) of the Liberty Media
Group as of such date over (ii) the aggregate par value of, or any greater
amount determined to be capital in respect of, all outstanding shares of
Liberty Media Group Common Stock and each class or series of TCI Preferred
Stock attributed to the Liberty Media Group or (b) in case there is no such
excess, an amount equal to TCI Earnings (Loss) Attributable to the Liberty
Media Group (if positive) for the fiscal year in which such date occurs
and/or the preceding fiscal year. "TCI Earnings (Loss) Attributable to the
Liberty Media Group," for any period, means the net earnings or loss of the
Liberty Media Group for such period determined on a basis consistent with
the determination of the net earnings or loss of the Liberty Media Group
for such period as presented in the combined financial statements of the
Liberty Media Group for such period, including income and expenses of TCI
attributed to the operations of the Liberty Media Group on a substantially
consistent basis, including, without limitation, corporate administrative
costs, net interest and income taxes. The Liberty Media Group Available
Dividend Amount is intended to be similar to the amount that would be
legally available for the payment of dividends on the Liberty Media Group
Common Stock under the DGCL if the Liberty Media Group were a separate
Delaware corporation. There can be no assurance that there will be a
Liberty Media Group Available Dividend Amount.
Except for dividends declared or paid as described below under "-
-Share Distributions" and "--Conversion and Redemption--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock," any
dividends paid on the TCI Group Series A Common Stock or the TCI Group
Series B Common Stock will be paid only on both series, in equal amounts
per share, and any dividends paid on the LMG Series A Common Stock or the
LMG Series B Common Stock will be paid only on both series, in equal
amounts per share.
The TCI Board of Directors, subject to the provisions described
herein under "--Dividends" and below under "--Share Distributions," has the
authority and discretion to declare and pay dividends on the TCI Group
Common Stock or the Liberty Media Group Common Stock in equal or unequal
amounts, notwithstanding the relationship between the TCI Group Available
Dividend Amount and the Liberty Media Group Available Dividend Amount, the
respective amounts of prior dividends declared on, or liquidation rights
of, the TCI Group Common Stock or the Liberty Media Group Common Stock or
any other factor.
At the time of any dividend or other distribution on the
outstanding shares of Liberty Media Group Common Stock (including any
dividend of Net Proceeds from the Disposition of all or substantially all
of the properties and assets of the Liberty Media Group as described below
under "--Conversion and Redemption--Mandatory Dividend, Redemption or
Conversion of Liberty Media Group Common Stock"), the TCI Group will (if at
such time there is an Inter-Group Interest) be credited, and the Liberty
Media Group will be charged (in addition to the charge for the dividend or
other distribution paid or distributed in respect of outstanding shares of
Liberty Media Group Common Stock), with an amount equal to the product of
(i) the aggregate amount of such dividend or distribution paid or
distributed in respect of outstanding shares of Liberty Media Group Common
Stock times (ii) a fraction the numerator of which is the Inter-Group
Interest Fraction and the denominator of which is the Outstanding Interest
Fraction.
Share Distributions
Distributions on TCI Group Common Stock. If at any time after
the Distribution a distribution paid in TCI Group Common Stock, Liberty
Media Group Common Stock, or any other securities of TCI or any other
person (a "share distribution") is to be made with respect to the TCI Group
Common Stock, such share distribution will be declared and paid only as
follows:
(i) a share distribution consisting of shares of TCI Group
Series A Common Stock (or Convertible Securities
convertible into or exercisable or exchangeable for
shares of TCI Group Series A Common Stock) to holders of
TCI Group Series A Common Stock and TCI Group Series B
Common Stock, on an equal per share basis; or consisting
of shares of TCI Group Series B Common Stock (or
Convertible Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series B Common
Stock) to holders of TCI Group Series A Common Stock and
TCI Group Series B Common Stock, on an equal per share
basis; or consisting of shares of TCI Group Series A
Common
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Stock (or Convertible Securities convertible into or
exercisable or exchangeable for shares of TCI Group
Series A Common Stock) to holders of TCI Group Series A
Common Stock and, on an equal per share basis, shares of
TCI Group Series B Common Stock (or like Convertible
Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series B Common
Stock) to holders of TCI Group Series B Common Stock;
(ii) a share distribution consisting of shares of LMG Series A
Common Stock (or Convertible Securities convertible into
or exercisable or exchangeable for shares of LMG Series A
Common Stock) to holders of TCI Group Series A Common
Stock and TCI Group Series B Common Stock, on an equal
per share basis; provided that the sum of (a) the
aggregate number of shares of LMG Series A Common Stock
to be so issued (or the number of such shares which would
be issuable upon conversion, exercise or exchange of any
Convertible Securities to be so issued) and (b) the
number of shares of such series that are subject to
issuance upon conversion, exercise or exchange of any
Convertible Securities then outstanding that are
attributed to the TCI Group (other than Pre-Distribution
Convertible Securities and other than Convertible
Securities convertible into or exercisable or
exchangeable for Committed Acquisition Shares) is less
than or equal to the Number of Shares Issuable with
Respect to the Inter-Group Interest; and
(iii) a share distribution consisting of any class or series of
securities of TCI or any other person other than TCI
Group Common Stock or Liberty Media Group Common Stock
(or Convertible Securities convertible into or
exercisable or exchangeable for shares of TCI Group
Common Stock or Liberty Media Group Common Stock), either
on the basis of a distribution of identical securities,
on an equal per share basis, to holders of TCI Group
Series A Common Stock and TCI Group Series B Common Stock
or on the basis of a distribution of one class or series
of securities to holders of TCI Group Series A Common
Stock and another class or series of securities to
holders of TCI Group Series B Common Stock, provided that
the securities so distributed (and, if the distribution
consists of Convertible Securities, the securities into
which such Convertible Securities are convertible or for
which they are exercisable or exchangeable) do not differ
in any respect other than their relative voting rights
and related differences in designation, conversion,
redemption and share distribution provisions, with
holders of shares of TCI Group Series B Common Stock
receiving the class or series having the higher relative
voting rights (without regard to whether such rights
differ to a greater or lesser extent than the
corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions
between the TCI Group Series A Common Stock and the TCI
Group Series B Common Stock), provided that if the
securities so distributed constitute capital stock of a
subsidiary of TCI, such rights will not differ to a
greater extent than the corresponding differences in
voting rights, designation, conversion, redemption and
share distribution provisions between the TCI Group
Series A Common Stock and the TCI Group Series B Common
Stock, and provided in each case that such distribution
is otherwise made on an equal per share basis.
TCI will not reclassify, subdivide or combine the TCI Group
Series A Common Stock without reclassifying, subdividing or combining the
TCI Group Series B Common Stock, on an equal per share basis, and TCI will
not reclassify, subdivide or combine the TCI Group Series B Common Stock
without reclassifying, subdividing or combining the TCI Group Series A
Common Stock, on an equal per share basis.
Distributions on Liberty Media Group Common Stock. If at any
time a share distribution is to be made with respect to the Liberty Media
Group Common Stock, such share distribution will be declared and paid only
as follows (or as described under "--Conversion and Redemption" with
respect to the redemptions and other distributions referred to therein):
(i) a share distribution consisting of shares of LMG Series A
Common Stock (or Convertible Securities convertible into
or exercisable or exchangeable for shares of LMG Series A
Common Stock) to
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holders of LMG Series A Common Stock and LMG Series B
Common Stock, on an equal per share basis; or consisting
of shares of LMG Series B Common Stock (or Convertible
Securities convertible into or exercisable or
exchangeable for shares of LMG Series B Common Stock) to
holders of LMG Series A Common Stock and LMG Series B
Common Stock, on an equal per share basis; or consisting
of shares of LMG Series A Common Stock (or Convertible
Securities convertible into or exercisable or
exchangeable for shares of LMG Series A Common Stock) to
holders of LMG Series A Common Stock and, on an equal per
share basis, shares of LMG Series B Common Stock (or like
Convertible Securities convertible into or exercisable or
exchangeable for shares of LMG Series B Common Stock) to
holders of LMG Series B Common Stock; and
(ii) a share distribution consisting of any class or series of
securities of TCI or any other person other than as
described in the immediately preceding clause (i) and
other than TCI Group Common Stock (or Convertible
Securities convertible into or exercisable or
exchangeable for shares of TCI Group Series A Common
Stock or TCI Group Series B Common Stock), either on the
basis of a distribution of identical securities, on an
equal per share basis, to holders of LMG Series A Common
Stock and LMG Series B Common Stock or on the basis of a
distribution of one class or series of securities to
holders of LMG Series A Common Stock and another class or
series of securities to holders of LMG Series B Common
Stock, provided that the securities so distributed (and,
if the distribution consists of Convertible Securities,
the securities into which such Convertible Securities are
convertible or for which they are exercisable or
exchangeable) do not differ in any respect other than
their relative voting rights and related differences in
designation, conversion, redemption and share
distribution provisions, with holders of shares of LMG
Series B Common Stock receiving the class or series
having the higher relative voting rights (without regard
to whether such rights differ to a greater or lesser
extent than the corresponding differences in voting
rights, designation, conversion, redemption and share
distribution provisions between the LMG Series A Common
Stock and the LMG Series B Common Stock), provided that
if the securities so distributed constitute capital stock
of a subsidiary of TCI, such rights will not differ to a
greater extent than the corresponding differences in
voting rights, designation, conversion, redemption and
share distribution provisions between the LMG Series A
Common Stock and the LMG Series B Common Stock, and
provided in each case that such distribution is otherwise
made on an equal per share basis.
TCI will not reclassify, subdivide or combine the LMG Series A
Common Stock without reclassifying, subdividing or combining the LMG Series
B Common Stock, on an equal per share basis, and TCI will not reclassify,
subdivide or combine the LMG Series B Common Stock without reclassifying,
subdividing or combining the LMG Series A Common Stock, on an equal per
share basis.
Conversion and Redemption
Conversion of TCI Group Series B Common Stock and LMG Series B
Common Stock at the Option of the Holder. Each share of TCI Group Series B
Common Stock is convertible, at the option of the holder thereof, into one
share of TCI Group Series A Common Stock. Each share of LMG Series B
Common Stock is convertible, at the option of the holder thereof, into one
share of LMG Series A Common Stock. Shares of TCI Group Series A Common
Stock are not convertible into shares of TCI Group Series B Common Stock,
and shares of LMG Series A Common Stock are not convertible into shares of
LMG Series B Common Stock.
Conversion of Liberty Media Group Common Stock at the Option of
TCI. The TCI Board of Directors may at any time declare that (i) all of
the outstanding shares of LMG Series A Common Stock will be converted into
a number (or fraction) of fully paid and nonassessable shares of TCI Group
Series A Common Stock equal to the Optional Conversion Ratio, and (ii) all
of the outstanding shares of LMG Series B Common Stock will be converted
into a number (or fraction) of fully paid and nonassessable shares of TCI
Group Series B Common Stock equal to the Optional Conversion Ratio.
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For these purposes, the "Optional Conversion Ratio" means the
quotient (calculated to the nearest five decimal places) obtained by
dividing (x) the Liberty Media Group Common Stock Per Share Value by (y)
the average Market Value of one share of TCI Group Series A Common Stock
over the 20-trading day period ending on the trading day preceding the
Appraisal Date. The Liberty Media Group Common Stock Per Share Value will
equal the quotient obtained by dividing the Liberty Media Group Private
Market Value by the Adjusted Outstanding Shares of Liberty Media Group
Common Stock, which will be determined in the manner described below.
The "Liberty Media Group Private Market Value" means an amount
equal to the private market value of the Liberty Media Group as of the last
day of the calendar month preceding the month in which the last of the two
appraisers referred to in the immediately following sentence are selected
(the last day of such calendar month is hereinafter referred to as the
"Appraisal Date"). In the event that TCI determines to establish the
Liberty Media Group Private Market Value, two investment banking firms of
recognized national standing will be designated to determine the private
market value of the Liberty Media Group, one designated by TCI (the "First
Appraiser") and one designated by a committee of the TCI Board of Directors
all of whose members are independent directors as determined under Nasdaq
National Market rules (the "Second Appraiser"). The date upon which the
last of such appraisers is selected is hereinafter referred to as the
"Selection Date." Not later than 20 days after the Selection Date, the
First Appraiser and the Second Appraiser will each determine its initial
view as to the private market value of the Liberty Media Group as of the
Appraisal Date and will consult with one another with respect thereto. Not
later than the 30th day after the Selection Date, the First Appraiser and
the Second Appraiser will each have determined its final view as to such
private market value. If the higher of the respective final views of the
First Appraiser and the Second Appraiser as to such private market value
(the "Higher Appraised Amount") is not more than 120% of the lower of such
respective final views (the "Lower Appraised Amount"), the Liberty Media
Group Private Market Value (subject to any adjustment described in the
second succeeding paragraph) will be the average of those two amounts. If
the Higher Appraised Amount is more than 120% of the Lower Appraised
Amount, the First Appraiser and the Second Appraiser will agree upon and
jointly designate a third investment banking firm of recognized national
standing (the "Mutually Designated Appraiser") to determine such private
market value. The Mutually Designated Appraiser will not be provided with
any of the work of the First Appraiser and Second Appraiser. The Mutually
Designated Appraiser will, no later than the 20th day after the date the
Mutually Designated Appraiser is designated, determine such private market
value (the "Mutually Appraised Amount"), and the Liberty Media Group
Private Market Value (subject to any adjustment described in the second
succeeding paragraph) will be (i) if the Mutually Appraised Amount is
between the Lower Appraised Amount and the Higher Appraised Amount, (a) the
average of (1) the Mutually Appraised Amount and (2) the Lower Appraised
Amount or the Higher Appraised Amount, whichever is closer to the Mutually
Appraised Amount, or (b) the Mutually Appraised Amount, if neither the
Lower Appraised Amount nor the Higher Appraised Amount is closer to the
Mutually Appraised Amount, or (ii) if the Mutually Appraised Amount is
greater than the Higher Appraised Amount or less than the Lower Appraised
Amount, the average of the Higher Appraised Amount and the Lower Appraised
Amount. For these purposes, if any such investment banking firm expresses
its final view of the private market value of the Liberty Media Group as a
range of values, such investment banking firm's final view of such private
market value will be deemed to be the midpoint of such range of values.
Each of the investment banking firms referred to in the
immediately preceding paragraph will be instructed to determine the private
market value of the Liberty Media Group as of the Appraisal Date based upon
the amount a willing purchaser would pay to a willing seller, in an arm's
length transaction, if it were acquiring the Liberty Media Group, as if the
Liberty Media Group were a publicly traded non-controlled corporation and
the purchaser was acquiring all of the capital stock of such corporation
and without consideration of any potential regulatory constraints limiting
the potential purchasers of the Liberty Media Group other than that which
would have existed if the Liberty Media Group were a publicly traded non-
controlled entity.
Following the determination of the Liberty Media Group Private
Market Value, the investment banking firms whose final views of the private
market value of the Liberty Media Group were used in the calculation of the
Liberty Media Group Private Market Value will determine the Adjusted
Outstanding Shares of Liberty Media Group Common Stock together with any
further appropriate adjustments to the Liberty Media Group Private Market
Value resulting from
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such determination. The "Adjusted Outstanding Shares of Liberty Media
Group Common Stock" means a number, as determined by such investment
banking firms as of the Appraisal Date, equal to the sum of the number of
shares of Liberty Media Group Common Stock outstanding, the Number of
Shares Issuable with Respect to the Inter-Group Interest, the number of
Committed Acquisition Shares issuable, the number of shares of Liberty
Media Group Common Stock issuable upon the conversion, exercise or exchange
of all Pre-Distribution Convertible Securities and the number of shares of
Liberty Media Group Common Stock issuable upon the conversion, exercise or
exchange of those Convertible Securities (other than Pre-Distribution
Convertible Securities and other than Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) the holders of which would derive an economic benefit from
conversion, exercise or exchange of such Convertible Securities which
exceeds the economic benefit of not converting, exercising or exchanging
such Convertible Securities. The "Liberty Media Group Common Stock Per
Share Value" means the quotient obtained by dividing the Liberty Media
Group Private Market Value by the Adjusted Outstanding Shares of Liberty
Media Group Common Stock, provided that if such investment banking firms do
not agree on the determinations provided for in this paragraph, the Liberty
Media Group Common Stock Per Share Value will be the average of the
quotients so obtained on the basis of the respective determinations of such
firms.
If TCI determines to convert shares of LMG Series A Common Stock
into TCI Group Series A Common Stock and shares of LMG Series B Common
Stock into TCI Group Series B Common Stock at the Optional Conversion
Ratio, such conversion will occur on a conversion date on or prior to the
120th day following the Appraisal Date. If TCI determines not to undertake
such conversion, TCI may at any time thereafter undertake to reestablish
the Liberty Media Group Common Stock Per Share Value as of a subsequent
date.
Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock. Upon the sale, transfer, assignment or other
disposition, whether by merger, consolidation, sale or contribution of
assets or stock or otherwise (a "Disposition"), in one transaction or a
series of related transactions by TCI and its subsidiaries of all or
substantially all of the properties and assets of the Liberty Media Group
to one or more persons, entities or groups (other than (a) in connection
with the Disposition by TCI of all of TCI's properties and assets in one
transaction or a series of related transactions in connection with the
liquidation, dissolution or winding up of TCI, (b) a dividend, other
distribution or redemption in accordance with any provision described under
"--Dividends," "--Share Distributions," "--Redemption in Exchange for Stock
of Subsidiary" or "--Liquidation Rights," (c) to any person, entity or
group which TCI, directly or indirectly, after giving effect to the
Disposition, controls or (d) in connection with a Related Business
Transaction), TCI will on or prior to the 85th trading day following the
consummation of such Disposition, either:
(i) subject to the limitations described above under "--
Dividends," declare and pay a dividend in cash and/or
securities or other property (other than a dividend or
distribution of TCI Common Stock) to the holders of the
outstanding shares of Liberty Media Group Common Stock
equally on a share for share basis (subject to the
provisions described in the last sentence of the
paragraph herein which defines the term "Net Proceeds"),
in an aggregate amount equal to the product of the
Outstanding Interest Fraction as of the record date for
determining the holders entitled to receive such dividend
and the Net Proceeds of such Disposition;
(ii) provided that there are funds of TCI legally available
therefor and the Liberty Media Group Available Dividend
Amount would have been sufficient to pay a dividend in
lieu thereof as described in clause (i) of this
paragraph:
(a) if such Disposition involves all (not merely
substantially all) of the properties and assets of the
Liberty Media Group, redeem all outstanding shares of LMG
Series A Common Stock and LMG Series B Common Stock in
exchange for cash and/or securities or other property
(other than TCI Common Stock) in an aggregate amount
equal to the product of the Adjusted Outstanding Interest
Fraction as of the date of such redemption and the Net
Proceeds of such Disposition, such aggregate amount to be
allocated (subject to the provisions described in the
last sentence of the
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paragraph herein which defines the term "Net Proceeds")
to shares of LMG Series A Common Stock and LMG Series B
Common Stock in the ratio of the number of shares of each
such series outstanding (so that the amount of
consideration paid for the redemption of each share of
LMG Series A Common Stock and each share of LMG Series B
Common Stock is the same); or
(b) if such Disposition involves substantially
all (but not all) of the properties and assets of the
Liberty Media Group, apply an aggregate amount of cash
and/or securities or other property (other than TCI
Common Stock) equal to the product of the Outstanding
Interest Fraction as of the date shares are selected for
redemption and the Net Proceeds of such Disposition to
the redemption of outstanding shares of LMG Series A
Common Stock and LMG Series B Common Stock, such
aggregate amount to be allocated (subject to the
provisions described in the last sentence of the
paragraph herein which defines the term "Net Proceeds")
to shares of LMG Series A Common Stock and LMG Series B
Common Stock in the ratio of the number of shares of each
such series outstanding, and the number of shares of each
such series to be redeemed to equal the lesser of (x) the
whole number nearest the number determined by dividing
the aggregate amount so allocated to the redemption of
such series by the average Market Value of one share of
LMG Series A Common Stock during the ten-trading day
period beginning on the 16th trading day following the
consummation of such Disposition and (y) the number of
shares of such series outstanding (so that the amount of
consideration paid for the redemption of each share of
LMG Series A Common Stock and each share of LMG Series B
Common Stock is the same); or
(iii) convert (a) each outstanding share of LMG Series A Common
Stock into a number (or fraction) of fully paid and
nonassessable shares of TCI Group Series A Common Stock
and (b) each outstanding share of LMG Series B Common
Stock into a number (or fraction) of fully paid and
nonassessable shares of TCI Group Series B Common Stock,
in each case equal to 110% of the average daily ratio
(calculated to the nearest five decimal places) of the
Market Value of one share of LMG Series A Common Stock to
the Market Value of one share of TCI Group Series A
Common Stock during the ten-trading day period referred
to in clause (ii)(b) of this paragraph.
For these purposes, "substantially all of the properties and
assets of the Liberty Media Group" as of any date means a portion of such
properties and assets that represents at least 80% of the then-current
market value (as determined by the TCI Board of Directors) of the
properties and assets of the Liberty Media Group as of such date.
A "Related Business Transaction" means any Disposition of all or
substantially all of the properties and assets of the Liberty Media Group
in which TCI receives as proceeds of such Disposition primarily equity
securities (including, without limitation, capital stock, convertible
securities, partnership or limited partnership interests and other types of
equity securities, without regard to the voting power or contractual or
other management or governance rights related to such equity securities) of
the purchaser or acquiror of such assets and properties of the Liberty
Media Group, any entity which succeeds (by merger, formation of a joint
venture enterprise or otherwise) to such assets and properties of the
Liberty Media Group or a third party issuer, which purchaser, acquiror or
other issuer is engaged or proposes to engage primarily in one or more
businesses similar or complementary to the businesses conducted by the
Liberty Media Group prior to such Disposition, as determined in good faith
by the TCI Board of Directors.
The "Adjusted Outstanding Interest Fraction" means a fraction the
numerator of which is the number of outstanding shares of Liberty Media
Group Common Stock and the denominator of which is the sum of (a) such
number of outstanding shares, (b) the Number of Shares Issuable with
Respect to the Inter-Group Interest, (c) the number of shares of Liberty
Media Group Common Stock issuable upon conversion, exercise or exchange of
Pre-Distribution Convertible Securities and (d) the number of Committed
Acquisition Shares issuable.
The "Net Proceeds" with respect to any Disposition of any of the
properties and assets of the Liberty Media Group means an amount, if any,
equal to the gross proceeds of such Disposition after any payment of, or
reasonable
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provision for, (a) any taxes payable by TCI in respect of such Disposition
or in respect of any resulting dividend or redemption (or which would have
been payable but for the utilization of tax benefits attributable to the
TCI Group), (b) any transaction costs, including, without limitation, any
legal, investment banking and accounting fees and expenses and (c) any
liabilities and other obligations (contingent or otherwise) of, or
attributed to, the Liberty Media Group, including, without limitation, any
indemnity or guarantee obligations incurred in connection with the
Disposition or any liabilities for future purchase price adjustments and
any preferential amounts plus any accumulated and unpaid dividends and
other obligations (without duplication of amounts allocated for the
satisfaction of TCI's obligations with respect to Pre-Distribution
Convertible Securities and Committed Acquisition Shares issuable which are
included in the determination of the Adjusted Outstanding Interest
Fraction) in respect of TCI Preferred Stock attributed to the Liberty Media
Group. TCI may elect to pay the dividend or redemption price referred to
in clause (i) or (ii) above either in the same form as the proceeds of the
Disposition were received or in any other combination of cash or securities
or other property (other than TCI Common Stock) that the TCI Board of
Directors determines will have an aggregate market value on a fully
distributed basis, of not less than the amount of the Net Proceeds. If the
dividend or redemption price is paid in the form of securities of an issuer
other than TCI, the TCI Board of Directors may determine either to (i) pay
the dividend or redemption price in the form of separate classes or series
of securities, with one class or series of such securities to holders of
LMG Series A Common Stock and another class or series of securities to
holders of LMG Series B Common Stock, provided that such securities (and,
if such securities are convertible into or exercisable or exchangeable for
shares of another class or series of securities, the securities so issuable
upon such conversion, exercise or exchange) do not differ in any respect
other than their relative voting rights and related differences in
designation, conversion, redemption and share distribution provisions with
holders of shares of LMG Series B Common Stock receiving the class or
series having the higher relative voting rights (without regard to whether
such rights differ to a greater or lesser extent than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the LMG Series A Common Stock and the LMG
Series B Common Stock), provided that if such securities constitute capital
stock of a subsidiary of TCI, such rights will not differ to a greater
extent than the corresponding differences in voting rights, designation,
conversion, redemption and share distribution provisions between the LMG
Series A Common Stock and LMG Series B Common Stock, and otherwise such
securities will be distributed on an equal per share basis, or (ii) pay the
dividend or redemption price in the form of a single class of securities
without distinction between the shares received by the holders of LMG
Series A Common Stock and LMG Series B Common Stock.
At the time of any dividend made as a result of a Disposition
referred to above, the TCI Group will be credited, and the Liberty Media
Group will be charged (in addition to the charge for the dividend paid in
respect of outstanding shares of Liberty Media Group Common Stock), with an
amount equal to the product of (i) the aggregate amount paid in respect of
such dividend times (ii) a fraction the numerator of which is the Inter-
Group Interest Fraction and the denominator of which is the Outstanding
Interest Fraction.
Redemption in Exchange for Stock of Subsidiary. At any time at
which all of the assets and liabilities attributed to the Liberty Media
Group are held directly or indirectly by any one or more corporations all
of the capital stock of which is owned by TCI (the "Liberty Media Group
Subsidiaries"), the TCI Board of Directors may, subject to there being
funds of TCI legally available therefor, redeem on a pro rata basis, all of
the outstanding shares of Liberty Media Group Common Stock in exchange for
an aggregate number of outstanding fully paid and nonassessable shares of
common stock of each Liberty Media Group Subsidiary equal to the product of
the Adjusted Outstanding Interest Fraction and the number of all of the
outstanding shares of common stock of such Liberty Media Group Subsidiary.
In effecting such a redemption, the TCI Board of Directors may
determine either to (i) redeem shares of LMG Series A Common Stock and LMG
Series B Common Stock in exchange for shares of separate classes or series
of common stock of each Liberty Media Group Subsidiary with relative voting
rights and related differences in designation, conversion, redemption and
share distribution provisions not greater than the corresponding
differences in voting rights, designation, conversion, redemption and share
distribution provisions between the LMG Series A Common Stock and LMG
Series B Common Stock, with holders of shares of LMG Series B Common Stock
receiving the class or series having the higher relative voting rights, or
(ii) redeem shares of LMG Series A Common Stock and LMG Series B
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Common Stock in exchange for shares of a single class of common stock of
each Liberty Media Group Subsidiary without distinction between the shares
distributed to the holders of the two series of Liberty Media Group Common
Stock. If TCI determines to undertake a redemption as described in clause
(i) of the preceding sentence, the outstanding shares of common stock of
each Liberty Media Group Subsidiary not distributed to holders of Liberty
Media Group Common Stock would consist solely of the class or series having
the lower relative voting rights.
Certain Provisions Respecting Convertible Securities. Unless the
provisions of any class or series of Pre-Distribution Convertible
Securities or Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares provide
specifically to the contrary, after any conversion date or redemption date
on which all outstanding shares of Liberty Media Group Common Stock were
converted or redeemed, any share of Liberty Media Group Common Stock that
is issued on conversion, exercise or exchange of any Pre-Distribution
Convertible Securities or any Convertible Securities which are convertible
into or exercisable or exchangeable for Committed Acquisition Shares will,
immediately upon issuance pursuant to such conversion, exercise or exchange
and without any notice or any other action on the part of TCI or the TCI
Board of Directors or the holder of such share of Liberty Media Group
Common Stock, be converted into or redeemed in exchange for, as applicable,
the kind and amount of shares of capital stock, cash and/or other
securities or property that a holder of such Pre-Distribution Convertible
Securities or any Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares would have
been entitled to receive pursuant to the terms of such securities had such
terms provided that the conversion, exercise or exchange privilege in
effect immediately prior to any such conversion or redemption of all
outstanding shares of Liberty Media Group Common Stock would be adjusted so
that the holder of any such Pre-Distribution Convertible Securities or any
Convertible Securities which are convertible into or exercisable or
exchangeable for Committed Acquisition Shares thereafter surrendered for
conversion, exercise or exchange would be entitled to receive the kind and
amount of shares of capital stock, cash and/or other securities or property
such holder would have received as a result of such action had such
securities been converted, exercised or exchanged immediately prior
thereto. With respect to any Convertible Securities which are created,
established or otherwise first authorized for issuance subsequent to the
record date for the Distribution (other than Pre-Distribution Convertible
Securities and Convertible Securities which are convertible into or
exercisable or exchangeable for Committed Acquisition Shares), the terms
and provisions of which do not provide for adjustments specifying the kind
and amount of capital stock, cash and/or securities or other property that
such holder would be entitled to receive upon the conversion, exercise or
exchange of such Convertible Securities following any conversion date or
redemption date on which all outstanding shares of Liberty Media Group
Common Stock were converted or redeemed, then upon such conversion,
exercise or exchange of such Convertible Securities, any share of Liberty
Media Group Common Stock that is issued on conversion, exercise or exchange
of any such Convertible Securities will, immediately upon issuance pursuant
to such conversion, exercise or exchange and without any notice or any
other action on the part of TCI or the TCI Board of Directors or the holder
of such share of Liberty Media Group Common Stock, be redeemed in exchange
for, to the extent assets of TCI are legally available therefor, the amount
of $.01 per share in cash.
General Conversion and Redemption Provisions. Not later than the
10th trading day following the consummation of a Disposition referred to
above under "--Mandatory Dividend, Redemption or Conversion of Liberty
Media Group Common Stock," TCI will announce publicly by press release (i)
the Net Proceeds of such Disposition, (ii) the number of outstanding shares
of LMG Series A Common Stock and LMG Series B Common Stock, (iii) the
number of shares of LMG Series A Common Stock and LMG Series B Common Stock
into or for which Convertible Securities are then convertible, exercisable
or exchangeable and the conversion, exercise or exchange prices thereof
(and stating which, if any, of such Convertible Securities constitute Pre-
Distribution Convertible Securities or Convertible Securities which are
convertible into or exercisable or exchangeable for Committed Acquisition
Shares) and the number of Committed Acquisition Shares issuable, (iv) the
Outstanding Interest Fraction as of a recent date preceding the date of
such notice and (v) the Adjusted Outstanding Interest Fraction as of a
recent date preceding the date of such notice. Not earlier than the 26th
trading day and not later than the 30th trading day following the
consummation of such Disposition, TCI will announce publicly by press
release which of the actions described in clauses (i), (ii) or (iii) of the
first paragraph under "--Mandatory Dividend, Redemption or Conversion of
Liberty Media Group Common Stock" it has irrevocably determined to take.
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TCI also will cause to be given to each holder of outstanding
shares of LMG Series A Common Stock and LMG Series B Common Stock and to
each holder of Convertible Securities convertible into or exercisable or
exchangeable for shares of either such series (unless provision for notice
is otherwise made pursuant to the terms of such Convertible Securities) a
notice setting forth (i) if TCI has determined to pay a dividend described
in clause (i) of the first paragraph under "--Mandatory Dividend,
Redemption or Conversion of Liberty Media Group Common Stock" (a "Dividend
Election"), (x) the record date for determining holders entitled to receive
such dividend, which will not be earlier than the 40th trading day, nor
later than the 50th trading day, following the consummation of such
Disposition and (y) the anticipated payment date of such dividend (which
will not be more than 85 trading days following the consummation of such
Disposition), (ii) if TCI has determined to redeem shares of Liberty Media
Group Common Stock following a Disposition of all (and not merely
substantially all) of the properties and assets of the Liberty Media Group
as described in clause (ii)(a) of the first paragraph under "--Mandatory
Dividend, Redemption or Conversion of Liberty Media Group Common Stock" (a
"Full Redemption Election"), (x) the redemption date (which will not be
more than 85 trading days following the consummation of such Disposition)
and (y) a statement that all shares of Liberty Media Group Common Stock
outstanding on the redemption date will be redeemed, (iii) if TCI has
determined to redeem shares of Liberty Media Group Common Stock following a
Disposition of substantially all (but not all) of the properties and assets
of the Liberty Media Group as described in clause (ii)(b) of the first
paragraph under "--Mandatory Dividend, Redemption or Conversion of Liberty
Media Group Common Stock" (a "Partial Redemption Election"), (x) a date not
earlier than the 40th trading day and not later than the 50th trading day
following the consummation of such Disposition on which shares of Liberty
Media Group Common Stock then outstanding will be selected for redemption
and (y) the anticipated redemption date (which will not be more than 85
trading days following the consummation of such Disposition) and (iv) in
the event of any conversion as described above under "--Conversion of
Liberty Media Group Common Stock at the Option of TCI" or as described in
clause (iii) of the first paragraph under "--Mandatory Dividend, Redemption
or Conversion of Liberty Media Group Common Stock" (a "Conversion
Election"), (x) a statement that all outstanding shares of Liberty Media
Group Common Stock will be converted and (y) the conversion date (which
will not be more than 85 trading days following the consummation of the
Disposition in the event of conversion pursuant to the provisions described
under "--Mandatory Dividend, Redemption or Conversion of Liberty Media
Group Common Stock" and which will not be more than 120 days after the
Appraisal Date in the event of conversion pursuant to the provisions
described under "--Conversion of Liberty Media Group Common Stock at the
Option of TCI"). Each notice of a Dividend Election, a Full Redemption
Election or a Partial Redemption Election also will state, as applicable,
(i) the kind of shares of capital stock, cash and/or other securities or
property to be distributed in respect of shares of Liberty Media Group
Common Stock (in the case of a Dividend Election) or paid as the redemption
price with respect to shares of Liberty Media Group Common Stock
outstanding on the redemption date (in the case of a Full Redemption
Election) or selected for redemption (in the case of a Partial Redemption
Election); (ii) the Net Proceeds of such Disposition; (iii) in the case of
a Dividend Election and a Partial Redemption Election, the Outstanding
Interest Fraction as of a recent date preceding the date of such notice,
and in the case of a Full Redemption Election, the Adjusted Outstanding
Interest Fraction as of a recent date preceding the date of such notice;
(iv) the number of outstanding shares of LMG Series A Common Stock and LMG
Series B Common Stock and the number of shares of LMG Series A Common Stock
and LMG Series B Common Stock into or for which outstanding Convertible
Securities are then convertible, exercisable or exchangeable and the
conversion, exercise or exchange price thereof (and, in the case of a Full
Redemption Election, stating which, if any, of such Convertible Securities
constitute Pre-Distribution Convertible Securities or Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares and the number of Committed Acquisition Shares
issuable); (v) in the case of a Full Redemption Election, the place or
places where certificates for shares of Liberty Media Group Common Stock
properly endorsed or assigned for transfer (unless TCI waives such
requirement), are to be surrendered for delivery of certificates for shares
of such capital stock, cash and/or other securities or property; (vi) in
the case of notice to holders of Convertible Securities, a statement to the
effect that holders of such Convertible Securities will be entitled to
receive such dividend (in the case of a Dividend Election) or participate
in such redemption (in the case of a Full Redemption Election) or in the
selection of shares for redemption (in the case of a Partial Redemption
Election) only if such holders appropriately convert, exercise or exchange
such Convertible Securities on or prior to the record date for determining
holders entitled to receive such dividend, the redemption date, or the date
fixed for the selection of shares to be redeemed, respectively, and a
statement as to what, if anything, such holder will be entitled to receive
pursuant to the terms of such Convertible Securities or, if applicable,
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the provisions described under "--Certain Provisions Respecting Convertible
Securities" if such holder converts, exercises or exchanges such
Convertible Securities following such redemption date or date for selection
of shares to be redeemed, as applicable, and (vii) in the case of a Partial
Redemption Election, a statement that TCI will not be required to register
a transfer of any shares of Liberty Media Group Common Stock for a period
of 15 trading days next preceding the date fixed for selection of shares to
be redeemed. In the case of a Partial Redemption Election, TCI also will
cause to be given to each holder of shares of Liberty Media Group Common
Stock selected for redemption, a notice setting forth (i) the number of
shares of LMG Series A Common Stock and LMG Series B Common Stock held by
such holder to be redeemed, (ii) a statement that such shares of LMG Series
A Common Stock and LMG Series B Common Stock will be redeemed, (iii) the
redemption date (which will not be more than 85 trading days following the
consummation of such Disposition), (iv) the kind and per share amount of
shares of capital stock, cash and/or other securities or property to be
received by such holder with respect to each share of such Liberty Media
Group Common Stock to be redeemed, including details as to the calculation
thereof, and (v) the place or places where certificates for shares of such
Liberty Media Group Common Stock, properly endorsed or assigned for
transfer (unless TCI waives such requirement), are to be surrendered for
delivery of certificates for shares of such capital stock, cash and/or
other securities or property. The outstanding shares of Liberty Media
Group Common Stock to be redeemed will be redeemed by TCI pro rata among
the holders of Liberty Media Group Common Stock or by such other method as
may be determined by the TCI Board of Directors to be equitable.
In the case of a Conversion Election, TCI's notice also will
state (i) the per share number of shares of TCI Group Series A Common Stock
or TCI Group Series B Common Stock, as applicable, to be received with
respect to each share of LMG Series A Common Stock or LMG Series B Common
Stock, including details as to the calculation thereof, (ii) the place or
places where certificates for shares of Liberty Media Group Common Stock,
properly endorsed or assigned for transfer (unless TCI waives such
requirement), are to be surrendered, (iii) the number of outstanding shares
of LMG Series A Common Stock and LMG Series B Common Stock, the number of
Committed Acquisition Shares issuable and the number of shares of LMG
Series A Common Stock and LMG Series B Common Stock into or for which
outstanding Convertible Securities are then convertible, exercisable or
exchangeable and the conversion, exercise or exchange prices thereof and
(iv) in the case of a notice to holders of Convertible Securities, a
statement to the effect that holders of such Convertible Securities will be
entitled to participate in such conversion only if such holders
appropriately convert, exercise or exchange such Convertible Securities on
or prior to the conversion date and a statement as to what, if anything,
such holders will be entitled to receive pursuant to the terms of such
Convertible Securities or, if applicable, the provision described under "--
Certain Provisions Respecting Convertible Securities" if such holders
convert, exercise or exchange such Convertible Securities following such
conversion date.
Notice of a Dividend Election will be given not later than the
30th trading day following the consummation of the Disposition; notice of a
Full Redemption Election will be given not less than 35 trading days nor
more than 45 trading days prior to the redemption date; notice of a Partial
Redemption Election will be given not later than the 30th trading day
following the consummation of the Disposition and the notice to holders of
shares selected for redemption will be given promptly following such
selection, but not earlier than the 40th trading day and not later than the
50th trading day following the consummation of the Disposition; and notice
of a Conversion Election will be given not less than 35 trading days nor
more than 45 trading days prior to the conversion date. All such notices
will be sent by first-class mail, postage prepaid, to a holder at such
holder's address as the same appears on the transfer books of TCI.
If TCI determines to redeem shares of LMG Series A Common Stock
and LMG Series B Common Stock as described above under "--Redemption in
Exchange for Stock of Subsidiary," TCI will promptly cause to be given to
each holder of LMG Series A Common Stock and LMG Series B Common Stock and
to each holder of Convertible Securities convertible into or exercisable or
exchangeable for shares of either such series (unless provision for such
notice is otherwise made pursuant to the terms of such Convertible
Securities), a notice setting forth (i) a statement that all outstanding
shares of Liberty Media Group Common Stock will be redeemed in exchange for
shares of common stock of the Liberty Media Group Subsidiaries, (ii) the
redemption date, (iii) the Adjusted Outstanding Interest Fraction as of a
recent date preceding the date of such notice, (iv) the place or places
where certificates for shares of Liberty Media Group Common Stock, properly
endorsed or assigned for transfer (unless TCI waives such requirement), are
to
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<PAGE>
be surrendered for delivery of certificates for shares of common stock of
the Liberty Media Group Subsidiaries, (v) the number of outstanding shares
of LMG Series A Common Stock and LMG Series B Common Stock and the number
of shares of LMG Series A Common Stock and LMG Series B Common Stock into
or for which outstanding Convertible Securities are then convertible,
exercisable or exchangeable and the conversion, exercise or exchange prices
thereof (and stating which, if any, of such Convertible Securities
constitute Pre-Distribution Convertible Securities or Convertible
Securities which are convertible into or exercisable or exchangeable for
Committed Acquisition Shares) and the number of Committed Acquisition
Shares issuable, and (vi) in the case of a notice to holders of Convertible
Securities, a statement to the effect that holders of such Convertible
Securities will be entitled to receive shares of common stock of the
Liberty Media Group Subsidiaries upon redemption only if such holders
appropriately convert, exercise or exchange such Convertible Securities on
or prior to the redemption date referred to in clause (ii) of this sentence
and a statement as to what, if anything, such holders will be entitled to
receive pursuant to the terms of such Convertible Securities or, if
applicable, the provisions described under "--Certain Provisions Respecting
Convertible Securities" if such holders convert, exercise or exchange such
Convertible Securities following the redemption date. Such notice will be
sent by first-class mail, postage prepaid, not less than 35 trading days
nor more than 45 trading days prior to the redemption date, at such
holder's address as the same appears on the transfer books of TCI.
Neither the failure to mail any notice to any particular holder
of Liberty Media Group Common Stock or of Convertible Securities nor any
defect therein will affect the sufficiency thereof with respect to any
other holder of outstanding shares of Liberty Media Group Common Stock or
of Convertible Securities, or the validity of any conversion or redemption.
TCI will not be required to issue or deliver fractional shares of
any class of capital stock or any fractional securities to any holder of
Liberty Media Group Common Stock upon any conversion, redemption, dividend
or other distribution described above. In connection with the
determination of the number of shares of any class of capital stock that is
issuable or the amount of securities that is deliverable to any holder of
record upon any such conversion, redemption, dividend or other distribution
(including any fractions of shares or securities), TCI may aggregate the
number of shares of Liberty Media Group Common Stock held at the relevant
time by such holder of record. If the number of shares of any class of
capital stock or the amount of securities remaining to be issued or
delivered to any holder of Liberty Media Group Common Stock is a fraction,
TCI will, if such fraction is not issued or delivered to such holder, pay a
cash adjustment in respect of such fraction in an amount equal to the fair
market value of such fraction on the fifth trading day prior to the date
such payment is to be made (without interest). For purposes of the
preceding sentence, "fair market value" of any fraction will be (i) in the
case of any fraction of a share of capital stock of TCI, the product of
such fraction and the Market Value of one share of such capital stock and
(ii) in the case of any other fractional security, such value as is
determined by the TCI Board of Directors.
No adjustments in respect of dividends will be made upon the
conversion or redemption of any shares of Liberty Media Group Common Stock;
provided, however, that if the conversion date or the redemption date with
respect to the Liberty Media Group Common Stock is subsequent to the record
date for the payment of a dividend or other distribution thereon or with
respect thereto, the holders of shares of Liberty Media Group Common Stock
at the close of business on such record date will be entitled to receive
the dividend or other distribution payable on or with respect to such
shares on the date set for payment of such dividend or other distribution,
notwithstanding the conversion or redemption of such shares or TCI's
default in payment of the dividend or distribution due on such date.
Before any holder of shares of Liberty Media Group Common Stock
will be entitled to receive certificates representing shares of any kind of
capital stock or cash and/or securities or other property to be received by
such holder with respect to any conversion or redemption of shares of
Liberty Media Group Common Stock, such holder is required to surrender at
such place as TCI will specify certificates for such shares, properly
endorsed or assigned for transfer (unless TCI waives such requirement).
TCI will as soon as practicable after such surrender of certificates
representing shares of Liberty Media Group 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
22
<PAGE>
fractional securities referred to above. If less than all of the shares of
Liberty Media Group Common Stock represented by any one certificate are to
be redeemed, TCI will issue and deliver a new certificate for the shares of
Liberty Media Group Common Stock not redeemed. TCI will not be required to
register a transfer of (i) any shares of Liberty Media Group Common Stock
for a period of 15 trading days next preceding any selection of shares of
Liberty Media Group Common Stock to be redeemed or (ii) any shares of
Liberty Media Group Common Stock selected or called for redemption. Shares
selected for redemption may not thereafter be converted pursuant to the
provisions described under "--Conversion of TCI Group Series B Common Stock
and LMG Series B Common Stock at the Option of the Holder."
From and after any applicable conversion date or redemption date,
all rights of a holder of shares of Liberty Media Group Common Stock that
were converted or redeemed will cease except for the right, upon surrender
of the certificates representing shares of Liberty Media Group Common
Stock, to receive certificates representing shares of the kind and amount
of capital stock or cash and/or securities or other property for which such
shares were converted or redeemed, together with any payment for fractional
securities and such holder will have no other or further rights in respect
of the shares of Liberty Media Group Common Stock so converted or redeemed,
including, but not limited to, any rights with respect to any cash,
securities or other property which are reserved or otherwise designated by
TCI as being held for the satisfaction of TCI's obligations to pay or
deliver any cash, securities or other property upon the conversion,
exercise or exchange of any Convertible Securities outstanding as of the
date of such conversion or redemption or any Committed Acquisition Shares
which may then be issuable. No holder of a certificate that, immediately
prior to the applicable conversion date or redemption date for the Liberty
Media Group Common Stock, represented shares of Liberty Media Group Common
Stock will be entitled to receive any dividend or other distribution with
respect to shares of any kind of capital stock into or in exchange for
which the Liberty Media Group Common Stock was converted or redeemed until
surrender of such holder's certificate for a certificate or certificates
representing shares of such kind of capital stock. Upon such surrender,
there will be paid to the holder the amount of any dividends or other
distributions (without interest) which theretofore became payable with
respect to a record date after the conversion date or redemption date, as
the case may be, but that were not paid by reason of the foregoing, with
respect to the number of whole shares of the kind of capital stock
represented by the certificate or certificates issued upon such surrender.
From and after a conversion date or redemption date, as the case may be,
for any shares of Liberty Media Group Common Stock, TCI will, however, be
entitled to treat the certificates for shares of Liberty Media Group Common
Stock that have not yet been surrendered for conversion or redemption as
evidencing the ownership of the number of whole shares of the kind or kinds
of capital stock for which the shares of Liberty Media Group Common Stock
represented by such certificates have been converted or redeemed,
notwithstanding the failure to surrender such certificates.
TCI will pay any and all documentary, stamp or similar issue or
transfer taxes that may be payable in respect of the issue or delivery of
any shares of capital stock and/or other securities on conversion or
redemption of shares of Liberty Media Group Common Stock. TCI will not,
however, be required to pay any tax that may be payable in respect of any
transfer involved in the issue and delivery of any shares of capital stock
in a name other than that in which the shares of Liberty Media Group Common
Stock so converted or redeemed were registered and no such issue or
delivery will be made unless and until the person requesting such issue has
paid to TCI the amount of any such tax, or has established to the
satisfaction of TCI that such tax has been paid.
Liquidation Rights
In the event of a liquidation, dissolution or winding up of TCI,
whether voluntary or involuntary, after payment or provision for payment of
the debts and other liabilities of TCI and subject to the prior payment in
full of the preferential amounts to which any class or series of TCI
Preferred Stock is entitled, (i) the holders of the shares of TCI Group
Common Stock will share equally, on a share for share basis, in a
percentage of the funds of TCI remaining for distribution to its common
stockholders equal to 100% multiplied by the average daily ratio (expressed
as a decimal) of X/Z for the 20-trading day period ending on the trading
day prior to the date of the public announcement of such liquidation,
dissolution or winding up, and (ii) the holders of the shares of Liberty
Media Group Common Stock will share equally, on a share for share basis, in
a percentage of the funds of TCI remaining for distribution to its common
23
<PAGE>
stockholders equal to 100% multiplied by the average daily ratio (expressed
as a decimal) of Y/Z for such 20-trading day period, where X is the
aggregate Market Capitalization of the TCI Group Series A Common Stock and
the TCI Group Series B Common Stock, Y is the aggregate Market
Capitalization of the LMG Series A Common Stock and the LMG Series B Common
Stock, and Z is the aggregate Market Capitalization of the TCI Group Series
A Common Stock, the TCI Group Series B Common Stock, the LMG Series A
Common Stock and the LMG Series B Common Stock. Neither a consolidation,
merger nor sale of assets will be construed to be a "liquidation,"
"dissolution" or "winding up" of TCI. The "Market Capitalization" of any
class or series of capital stock of TCI on any trading day means the
product of (i) the Market Value of one share of such class or series on
such trading day and (ii) the number of shares of such class or series
outstanding on such trading day.
No holder of Liberty Media Group Common Stock will have any
special right to receive specific assets of the Liberty Media Group in the
case of any dissolution, liquidation or winding up of TCI.
Determinations by the TCI Board of Directors
The TCI Charter provides that any determinations made by the TCI
Board of Directors under any provision described under this section will be
final and binding on all stockholders of TCI, except as may otherwise be
required by law. Such a determination would not be binding if it were
established that the determination was made in breach of a fiduciary duty
of the TCI Board of Directors. TCI will prepare a statement of any such
determination by the TCI Board of Directors respecting the fair market
value of any properties, assets or securities and will file such statement
with the Secretary of TCI.
Preemptive Rights
Holders of the TCI Group Common Stock and Liberty Media Group
Common Stock do not have any preemptive rights to subscribe for any
additional shares of capital stock or other obligations convertible into or
exercisable for shares of capital stock that may hereafter be issued by
TCI.
Other Matters
The DGCL, the TCI Charter and TCI's Bylaws contain provisions which
may serve to discourage or make more difficult a change in control of TCI
without the support of the TCI Board of Directors or without meeting
various other conditions. The principal provisions of the DGCL and the
aforementioned corporate governance documents are outlined below.
DGCL Section 203, in general, prohibits a "business combination"
between a corporation and an "interested stockholder" within three years of
the date such stockholder became an "interested stockholder," unless (i)
prior to such date the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder, (ii) upon consummation of
the transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction commenced,
exclusive of shares owned by directors who are also officers and by certain
employee stock plans or (iii) on or after such date, the business
combination is approved by the board of directors and authorized by the
affirmative vote at a stockholders' meeting of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested stockholder.
The term "business combination" is defined to include, among other
transactions between the interested stockholder and the corporation or any
direct or indirect majority-owned subsidiary thereof, a merger or
consolidation; a sale, pledge, transfer or other disposition (including as
part of a dissolution) of assets having an aggregate market value equal to
10% or more of either the aggregate market value of all assets of the
corporation on a consolidated basis or the aggregate market value of all
the outstanding stock of the corporation; certain transactions that would
increase the interested stockholder's proportionate share ownership of the
stock of any class or series of the corporation or such subsidiary; and any
receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the
24
<PAGE>
corporation or any such-subsidiary. In general, and subject to certain
exceptions, an "interested stockholder" is any person who is the owner of
15% or more of the outstanding voting stock (or, in the case of a
corporation with classes of voting stock with disparate voting power, 15%
or more of the voting power of the outstanding voting stock) of the
corporation, and the affiliates and associates of such person. The term
"owner" is broadly defined to include any person that individually or with
or through his or its affiliates or associates, among other things,
beneficially owns such stock, or has the right to acquire such stock
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement or understanding or upon the exercise of
warrants or options or otherwise or has the right to vote such stock
pursuant to any agreement or understanding, or has an agreement or
understanding with the beneficial owner of such stock for the purpose of
acquiring, holding, voting or disposing of such stock. The restrictions of
DGCL Section 203 do not apply to corporations that have elected, in the
manner provided therein, not to be subject to such section or, with certain
exceptions, which do not have a class of voting stock that is listed on a
national securities exchange or authorized for quotation on an interdealer
quotation system of a registered national securities association or held of
record by more than 2,000 stockholders. The TCI Charter does not contain
any provision "opting out" of the application of DGCL Section 203 and TCI
has not taken any of the actions necessary for it to "opt out" of such
provision. As a result, the provisions of Section 203 will remain
applicable to transactions between TCI and any of its "interested
stockholders."
The TCI Charter also contains certain provisions which could make a
change in control of TCI more difficult. For example, the TCI Charter
requires, subject to the rights, if any, of any class or series of TCI
Preferred Stock, the affirmative vote of 66 2/3% of the total voting power
of the outstanding shares of Voting Securities, voting together as a single
class, to approve (i) a merger or consolidation of TCI with, or into,
another corporation, other than a merger or consolidation which does not
require the consent of stockholders under the DGCL or a merger or
consolidation which has been approved by 75% of the members of the TCI
Board of Directors (in which case, in accordance with the DGCL, the
affirmative vote of a majority of the total voting power of the outstanding
Voting Securities would, with certain exceptions, be required for
approval), (ii) the sale, lease or exchange of all or substantially all of
the property and assets of TCI or (iii) the dissolution of TCI. "Voting
Securities" is currently defined as the TCI Group Common Stock, the Liberty
Media Group Common Stock and any class or series of TCI Preferred Stock
entitled to vote generally with the holders of TCI Common Stock on matters
submitted to stockholders for a vote. The TCI Charter also provides for a
TCI Board of Directors of not less than three members, divided into three
classes of approximately equal size, with each class to be elected for a
three-year term at each annual meeting of stockholders. The exact number of
directors, currently nine, is fixed by the TCI Board of Directors. The
holders of TCI Group Common Stock, Liberty Media Group Common Stock, Class
B Preferred Stock and certain series of Series Preferred Stock, voting
together as a single class, vote in elections for directors. (TCI's
Convertible Redeemable Participating Preferred Stock, Series F has voting
rights, but outstanding shares are not entitled to vote because they are
held by subsidiaries of TCI.) Stockholders of TCI do not have cumulative
voting rights.
The TCI Charter authorizes the issuance of 50,000,000 shares of Series
Preferred Stock of which 33,901,240 shares remain available for designation
as of September 30, 1996. Under the TCI Charter, the TCI Board of
Directors is authorized, without further action by the stockholders of TCI,
to establish the preferences, limitations and relative rights of the Series
Preferred Stock. In addition, 1,900,000,000 shares of the TCI Group Common
Stock and 825,000,000 shares of Liberty Media Group Common Stock are
currently authorized by the TCI Charter, of which 1,130,361,501 and
657,728,766 respectively, remained available for issuance as of September
30, 1996 (before giving effect to reservations of shares for issuance upon
conversion, exchange or exercise of outstanding convertible or exchangeable
securities and options). The issue and sale of shares of TCI Group Common
Stock, Liberty Media Group Common Stock and/or Series Preferred Stock could
occur in connection with an attempt to acquire control of TCI, and the
terms of such shares of Series Preferred Stock could be designed in part to
impede the acquisition of such control.
The TCI Charter requires the affirmative vote of 66 2/3% of the total
voting power of the outstanding shares of Voting Securities, voting
together as a single class, to approve any amendment, alteration or repeal
of any provision of the TCI Charter or the addition or insertion of other
provisions therein.
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<PAGE>
The TCI Charter and TCI's Bylaws provide that a special meeting of
stockholders will be held at any time, subject to the rights of the holders
of any class or series of TCI Preferred Stock, upon the call of the
Secretary of TCI upon (i) the written request of the holders of not less
than 66 2/3% of the total voting power of the outstanding shares of Voting
Securities or (ii) at the request of not less than 75% of the members of
the TCI Board of Directors. Subject to the rights of any class or series
of TCI Preferred Stock, TCI's Bylaws require that written notice of the
intent to make a nomination at a meeting of stockholders must be received
by the Secretary of TCI, at TCI's principal executive offices, not later
than (a) with respect to an election of directors to be held at an annual
meeting of stockholders, 90 days in advance of such meeting, and (b) with
respect to an election of directors to be held at a special meeting of
stockholders, the close of business on the seventh day following the day on
which notice of such meeting is first given to stockholders. The notice
must contain: (1) the name and address of the stockholder who intends to
make the nomination and of the person or persons to be nominated; (2) a
representation that the stockholder is a holder of record of TCI's Voting
Securities entitled to vote at the meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in
the notice; (3) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination or nominations are
to be made by the stockholder; (4) such other information regarding each
nominee proposed by such stockholder as would have been required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had each proposed nominee been
nominated, or intended to be nominated, by the TCI Board of Directors; and
(5) the consent of each nominee to serve as a director of TCI if so
elected. Any actions to remove directors is required to be for "cause" (as
defined in the TCI Charter) and be approved by the holders of 66 2/3% of
the total voting power of the outstanding shares entitled to vote in the
election of directors.
LEGAL MATTERS
Certain legal matters with respect to the Shares will be passed upon
for the Company by Stephen M. Brett, Esq., Executive Vice President and
General Counsel of the Company.
EXPERTS
The consolidated balance sheets of Tele-Communications, Inc. and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of
the years in the three-year period ended December 31, 1995, and all related
financial statement schedules, which appear in the December 31, 1995
Annual Report on Form 10-K of Tele-Communications, Inc., have been
incorporated by reference herein in reliance upon the reports, dated March
18, 1996, of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
The combined balance sheets of TCI Group as of December 31, 1995 and
1994, and the related combined statements of operations, equity, and cash
flows for each of the years in the three-year period ended December 31,
1995, which appear in the December 31, 1995 Annual Report on Form 10-K of
Tele-Communications, Inc., have been incorporated by reference herein in
reliance upon the report, dated March 18, 1996, of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the combined financial
statements refers to the effects of not consolidating TCI Group's interest
in Liberty Media Group for the periods subsequent to the mergers of TCI
Communications, Inc. and Liberty Media Corporation on August 4, 1994.
The combined balance sheets of Liberty Media Group as of December 31,
1995 and 1994, and the related combined statements of operations, equity,
and cash flows for each of the years in the three-year period ended
December 31, 1995, which appear in the December 31, 1995 Annual Report on
Form 10-K of Tele-Communications, Inc., have been incorporated by reference
herein in reliance upon the report, dated March 18, 1996, of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in
accounting and auditing.
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<PAGE>
The statements of operations, stockholders' equity, and cash flows of
Liberty Media Corporation and subsidiaries for the year ended December 31,
1993, which appear in the December 31, 1995 Annual Report on Form 10-K of
Tele-Communications, Inc., have been incorporated by reference herein in
reliance upon the report, dated March 18, 1994, of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the December 31, 1993
financial statements refers to a change in method of accounting for income
taxes.
The consolidated balance sheet of TeleWest plc and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements of
operations and cash flows for each of the years in the three year period
ended December 31, 1995, which appear in the December 31, 1995 Annual
Report on Form 10-K of Tele-Communications, Inc., have been incorporated by
reference herein in reliance upon the report, dated March 6, 1996, of KPMG
Audit plc, independent chartered accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The combined balance sheets of Cablevision (a combination of certain
cable television assets of Cablevision S.A., Televisora Belgrano S.A.,
Construred S.A. and Univent's S.A.) as of December 31, 1994 and 1993, and
the related combined statements of operations and deficit and cash flows
for each of the years in the three-year period ended December 31, 1994,
which appear in the Current Report on Form 8-K of Tele-Communications, Inc.
dated April 20, 1995, as amended, have been incorporated by reference
herein in reliance upon the report, dated March 24, 1995, of KPMG
Finsterbusch Pickenhayn Sibille, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The combined financial statements of VII Cable which appear in TCI's
Current Report on Form 8-K dated June 19, 1996, have been incorporated by
reference herein in reliance on the report dated February 14, 1996 of Price
Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
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================================================================================
No person has been authorized to give any information or to make any
representation other than those contained in this Prospectus or any Prospectus
Supplement in connection with the offering described herein and, if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder shall, under any
circumstances, create an implication that the information contained or
incorporated by reference herein is correct as of any time subsequent to its
date or that there has been no change in the affairs of the Company since such
date. This Prospectus and any Prospectus Supplement do not constitute an offer
to sell or a solicitation of an offer to buy any securities other than those
specifically offered hereby or of any Securities offered hereby in any
jurisdiction in which such offer or solicitation is not authorized, or in which
the person making such offer or solicitation is not qualified to do so, or to
anyone to whom it is unlawful to make such offer or solicitation.
-----------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information...................................................... 2
Incorporation of Documents by
Reference............................................................... 2
Risk Factor................................................................ 3
The Company................................................................ 3
The Selling Stockholder and
the Offered Shares....................................................... 3
Plan of Distribution....................................................... 5
Description of TCI Common Stock............................................ 6
Legal Matters.............................................................. 26
Experts.................................................................... 26
</TABLE>
================================================================================
Tele-Communications, Inc.
Tele-Communications, Inc. Series A TCI Group
Common Stock ($1.00 par value)
-----------------------------------------
PROSPECTUS
-----------------------------------------
January ___, 1997
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All of the expenses in connection with the distribution of the Shares
are set forth below and will be borne by the Registrant. Except for the
registration fee and additional listing fee, all expenses are estimated.
<TABLE>
<S> <C>
Registration Fee....................................... $52,451.00
Blue Sky Fees and Expenses (including counsel fees).... 5,000.00
Legal Fees and Expenses................................ 15,000.00
Accounting Fees and Expenses........................... 10,000.00
Additional Listing Fees................................ 17,500.00
Miscellaneous.......................................... 1,000.00
-----------
Total.......................................... $100,951.00
</TABLE>
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides,
generally, that a corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding (except actions by or in the right of
the corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation against all expenses, judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A corporation may similarly indemnify such person for
expenses actually and reasonably incurred by such person in connection with the
defense or settlement of any action or suit by or in the right of the
corporation, provided such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, in the case of claims, issues and matters as to which such
person shall have been adjudged liable to the corporation, provided that a court
shall have determined, upon application, that, despite the adjudication of
liability but in view of all of the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides,
generally, that the certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that such provision may not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of Title 8 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision may eliminate or limit the liability of a director for any act or
omission occurring prior to the date when such provision became effective.
Article V, Section E of the Company's Restated Certificate of
Incorporation provides as follows:
"1. Limitation on Liability.
-----------------------
To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, a
director of the Corporation shall not be liable to the
Corporation or any of its stockholders for monetary damages for
breach of fiduciary duty as a director. Any repeal or
modification of this paragraph 1 shall be prospective only and
shall not adversely affect any
II-1
<PAGE>
limitation, right or protection of a director of the Corporation
existing at the time of such repeal or modification.
2. Indemnification.
---------------
(a) Right to Indemnification. The Corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable
law as it presently exists or may hereafter be amended, any
person who was or is made or is threatened to be made a party or
is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding")
by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise
or nonprofit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and
expenses (including attorneys' fees) reasonably incurred by such
person. Such right of indemnification shall inure whether or not
the claim asserted is based on matters which antedate the
adoption of this Section E. The Corporation shall be required to
indemnify a person in connection with a proceeding (or part
thereof) initiated by such person only if the proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation.
(b) Prepayment of Expenses. The Corporation shall pay the
expenses (including attorneys' fees) incurred in defending any
proceeding in advance of its final disposition, provided,
however, that the payment of expenses incurred by a director or
officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the director
or officer to repay all amounts advanced if it should be
ultimately determined that the director or officer is not
entitled to be indemnified under this paragraph or otherwise.
(c) Claims. If a claim for indemnification or payment of
expenses under this paragraph is not paid in full within 60 days
after a written claim therefor has been received by the
Corporation, the claimant may file suit to recover the unpaid
amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such
claim. In any such action the Corporation shall have the burden
of proving that the claimant was not entitled to the requested
indemnification or payment of expenses under applicable law.
(d) Non-Exclusivity of Rights. The rights conferred on any
person by this paragraph shall not be exclusive of any other
rights which such person may have or hereafter acquire under any
statute, provision of this Certificate, the Bylaws, agreement,
vote of stockholders or disinterested directors or otherwise.
(e) Other Indemnification. The Corporation's obligation, if
any, to indemnify any person who was or is serving at its request
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity
shall be reduced by any amount such person may collect as
indemnification from such other corporation, partnership, joint
venture, trust, enterprise or nonprofit entity.
3. Amendment or Repeal.
-------------------
Any repeal or modification of the foregoing provisions of this
Section E shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification."
II-2
<PAGE>
Article II, Section 2.9 of the Company's Bylaws also contains an
indemnity provision, requiring the Company to indemnify members of the Board of
Directors and officers of the Company and their respective heirs, personal
representatives and successors in interest for or on account of any action
performed on behalf of the Company, to the fullest extent provided by the laws
of the State of Delaware and the Company's Restated Certificate of
Incorporation, as then or thereafter in effect.
The Company has also entered into indemnification agreements with each
of its directors (each director, an "indemnitee"). The indemnification
agreements provide (i) for the prompt indemnification to the fullest extent
permitted by law against any and all expenses, including attorneys' fees and all
other costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness or participating in (including on
appeal), or in preparing for ("Expenses"), any threatened, pending or completed
action, suit or proceeding, or any inquiry or investigation ("Claim"), related
to the fact that such indemnitee is or was a director, officer, employee, agent
or fiduciary of the Company or is or was serving at the Company's request as a
director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or
by reason of anything done or not done by a director or officer in any such
capacity, and against any and all judgments, fines, penalties and amounts paid
in settlement (including all interest, assessments and other charges paid or
payable in connection therewith) of any Claim, unless the Reviewing Party (one
or more members of the Board of Directors or other person appointed by the Board
of Directors, who is not a party to the particular claim, or independent legal
counsel) determines that such indemnification is not permitted under applicable
law and (ii) for the prompt advancement of Expenses, and for reimbursement to
the Company if the Reviewing Party determines that such indemnitee is not
entitled to such indemnification under applicable law. In addition, the
indemnification agreements provide (i) a mechanism through which an indemnitee
may seek court relief in the event the Reviewing Party determines that the
indemnitee would not be permitted to be indemnified under applicable law (and
therefore is not entitled to indemnification or expense advancement under the
indemnification agreement) and (ii) indemnification against all expenses
(including attorneys' fees), and advancement thereof if requested, incurred by
the indemnitee in seeking to collect an indemnity claim or advancement of
expenses from the Company or incurred in seeking to recover under a directors'
and officers' liability insurance policy, regardless of whether successful or
not. Furthermore, the indemnification agreements provide that after there has
been a "change in control" in the Company (as defined in the indemnification
agreements), other than a change in control approved by a majority of directors
who were directors prior to such change, then, with respect to all
determinations regarding a right to indemnity and the right to advancement of
Expenses, the Company will seek legal advice only from independent legal counsel
selected by the indemnitee and approved by the Company.
The indemnification agreements impose upon the Company the burden of
proving that an indemnitee is not entitled to indemnification in any particular
case and negate certain presumptions that may otherwise be drawn against an
indemnitee seeking indemnification in connection with the termination of actions
in certain circumstances. Indemnitees' rights under the indemnification
agreements are not exclusive of any other rights they may have under Delaware
law, the Company's Bylaws or otherwise. Although not requiring the maintenance
of directors' and officers' liability insurance, the indemnification agreements
require that an indemnitee be provided with the maximum coverage available for
any director or officer of the Company if there is such a policy.
The Company may purchase liability insurance policies covering its
directors and officers.
In addition, the Selling Stockholder has agreed to indemnify the
Company, its directors and officers and each person, if any, who controls the
Company within the meaning of either the Securities Act or the Securities
Exchange Act of 1934, as amended, against certain liabilities, including civil
liabilities under the Securities Act, in connection with certain actions arising
out of the sale of the Shares registered hereby.
II-3
<PAGE>
Item 16. EXHIBITS
Exhibits Description
- -------- -----------
4.1 Restated Certificate of Incorporation of the Company, dated
August 4, 1994, as amended on August 4, 1994, August 16, 1994,
October 11, 1994, October 21, 1994, January 26, 1995, August 3, 1995,
August 3, 1995, January 25, 1996 and January 25, 1996 (Incorporated
herein by reference to Exhibit 3.1 of Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (Commission
File No. 0-20421)).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as amended by Form 10-K/A
(Commission File No. 0-20421)).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc. Series
A TCI Group Common Stock, par value $1.00 per share (Incorporated
herein by reference to Exhibit 4.3 of Company's registration statement
on Form 8-A, as amended by Form 8-A/A (Amendments No. 1 and 2)
Commission File No. 0-20421).
*5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of KPMG Audit plc.
23.6 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.7 Consent of Price Waterhouse LLP.
*23.8 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
*24 Powers of Attorney.
*99.1 Registration Rights Agreement, dated as of March 18, 1996, by and
between Tele-Communications, Inc. and Knight-Ridder Cablevision, Inc.
- ----------------
* Previously filed.
Item 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
II-4
<PAGE>
(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 the
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
- -------- -------
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amend-
ment 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
Amendment to the 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 7, 1997.
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
----------------------
Name: Stephen M. Brett
Title: Executive Vice President
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed by the following persons
(which persons constitute a majority of the Board of Directors) in the
capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
* Chairman of the Board, January 7, 1997
- -------------------------
(John C. Malone) Chief Executive Officer,
President and Director
(Principal Executive Officer)
* Director January 7, 1997
- -------------------------
(Donne F. Fisher)
Director
- -------------------------
(John W. Gallivan)
* Director January 7, 1997
- -------------------------
(Kim Magness)
Director
- -------------------------
(Robert A. Naify)
* Director January 7, 1997
- -------------------------
(Jerome H. Kern)
Director
- -------------------------
(Tony Coelho)
Director
- -------------------------
(J.C. Sparkman)
/s/ Paul Gould Director January 7, 1997
- -------------------------
(Paul Gould)
* Senior Vice President of TCI January 7, 1997
- ------------------------- Communications, Inc.
(Bernard W. Schotters) (Principal Financial Officer)
* Senior Vice President of TCI January 7, 1997
- -------------------------- Communications, Inc.
(Gary K. Bracken) (Principal Accounting Officer)
*By: /s/ Stephen M. Brett
----------------------
Stephen M. Brett
Attorney-in-Fact
II-7
<PAGE>
EXHIBIT INDEX
4.1 Restated Certificate of Incorporation of the Company, dated August 4,
1994, as amended on August 4, 1994, August 16, 1994, October 11, 1994,
October 21, 1994, January 26, 1995, August 3, 1995, August 3, 1995,
January 25, 1996 and January 25, 1996 (Incorporated herein by
reference to Exhibit 3.1 of Company's Annual Report on Form 10-K for
the year ended December 31, 1995 (Commission File No. 0-20421)).
4.2 Bylaws of the Company as adopted June 16, 1994 (Incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on Form 10-K
for the year ended December 31, 1994, as amended by Form 10-K/A
(Commission File No. 0-20421)).
4.3 Specimen Stock Certificate for the Tele-Communications, Inc. Series A
TCI Group Common Stock, par value $1.00 per share (Incorporated herein
by reference to Exhibit 4.3 of Company's registration statement on
Form 8-A, as amended by Form 8-A/A (Amendments No. 1 and 2) Commission
File No. 0-20421).
*5 Opinion of Stephen M. Brett, Esq.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of KPMG Peat Marwick LLP.
23.4 Consent of KPMG Peat Marwick LLP.
23.5 Consent of KPMG Audit plc.
23.6 Consent of KPMG Finsterbusch Pickenhayn Sibille.
23.7 Consent of Price Waterhouse LLP.
*23.8 Consent of Stephen M. Brett, Esq. (included in Exhibit 5).
*24 Powers of Attorney.
*99.1 Registration Rights Agreement, dated as of March 18, 1996, by and
between Tele-Communications, Inc. and Knight-Ridder Cablevision, Inc.
- --------------
* Previously filed
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
-------------------------------
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the registration statement on
Amendment No. 1 to Form S-3 of Tele-Communications, Inc. of our reports, dated
March 18, 1996, relating to the consolidated balance sheets of Tele-
Communications, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1995,
and all related financial statement schedules, which reports appear in the
December 31, 1995 Annual Report on Form 10-K of Tele-Communications, Inc. and to
the reference to our firm under the heading "Experts" in the registration
statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
January 2, 1997
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditors
-------------------------------
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the Registration Statement on
Amendment No. 1 to Form S-3 of Tele-Communications, Inc. of our report, dated
March 18, 1996, relating to the combined balance sheets of TCI Group as of
December 31, 1995 and 1994, and the related combined statements of operations,
equity, and cash flows for each of the years in the three-year period ended
December 31, 1995, which report appears in the December 31, 1995 Annual Report
on Form 10-K of Tele-Communications, Inc. and to the reference to our firm under
the heading "Experts" in the registration statement. Our report covering the
combined financial statements refers to the effects of not consolidating TCI
Group's interest in Liberty Media Group for the periods subsequent to the
mergers of TCI Communications, Inc. and Liberty Media Corporation on August 4,
1994.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
January 2, 1997
<PAGE>
EXHIBIT 23.3
Consent of Independent Auditors
-------------------------------
The Board of Directors and Stockholders
Tele-Communications, Inc.:
We consent to the incorporation by reference in the Registration Statement on
Amendment No. 1 to Form S-3 of Tele-Communications, Inc. of our report, dated
March 18, 1996, relating to the combined balance sheets of Liberty Media Group
as of December 31, 1995 and 1994, and the related combined statements of
operations, equity, and cash flows for each of the years in the three-year
period ended December 31, 1995, which report appears in the December 31, 1995
Annual Report on Form 10-K of Tele-Communications, Inc. and to the reference to
our firm under the heading "Experts" in the registration statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
January 2, 1997
<PAGE>
EXHIBIT 23.4
Consent of Independent Auditors
-------------------------------
The Board of Directors and Stockholders
Liberty Media Corporation:
We consent to the incorporation by reference in the Registration Statement on
Amendment No. 1 to Form S-3 of Tele-Communications, Inc. of our report, dated
March 18, 1994, relating to the consolidated statements of operations,
stockholders' equity, and cash flows of Liberty Media Corporation and
subsidiaries for the year ended December 31, 1993, which report appears in the
December 31, 1995 Annual Report on Form 10-K of Tele-Communications, Inc. and to
the reference to our firm under the heading "Experts" in the registration
statement. Our report refers to a change in the method of accounting for income
taxes.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Denver, Colorado
January 2, 1997
<PAGE>
EXHIBIT 23.5
Consent of Independent Auditors
-------------------------------
The Board of Directors and Shareholders of
TeleWest plc:
We consent to the incorporation by reference in the registration statement on
Amendment No. 1 to Form S-3 of Tele-Communications, Inc. of our report, dated
March 6, 1996, relating to the consolidated balance sheet of TeleWest plc and
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations and cash flows for each of the years in the three year
period ended December 31, 1995, which report appears in the December 31, 1995
Annual Report on Form 10-K of Tele-Communications, Inc. and to the reference to
our firm under the heading "Experts" in the registration statement.
/s/ KPMG Audit plc
KPMG Audit plc
London, England
January 2, 1997
<PAGE>
EXHIBIT 23.6
Consent of Independent Auditors
-------------------------------
The Board of Directors and Shareholders
of Tele-Communications International, Inc.:
We consent to the incorporation by reference in the registration statement on
Amendment No. 1 to Form S-3 of Tele-Communications, Inc. of our report, dated
March 24, 1995, relating to the combined balance sheets of Cablevision (A
combination of certain cable television assets of Cablevision S.A., Televisora
Belgrano S.A., Construred S.A. and Univent's S.A.) as of December 31, 1994 and
1993, and the related combined statements of operations and deficit and cash
flows for each of the years in the three-year period ended December 31, 1994,
which report appears in the Current Report on Form 8-K of Tele-Communications,
Inc., dated April 20, 1995, as amended, and to the reference to our firm under
the heading "Experts" in the registration statement.
KPMG FINSTERBUSCH PICKENHAYN SIBILLE
/s/ Juan Carlos Pickenhayn
Juan Carlos Pickenhayn
Partner
Buenos Aires, Argentina
January 2, 1997
<PAGE>
EXHIBIT 23.7
Consent of Independent Accountants
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 of Tele-
Communications, Inc. of our report dated February 14, 1996 relating to the
combined financial statements of VII Cable which appears in the Current Report
on Form 8-K of Tele-Communications, Inc. dated June 19, 1996. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
San Jose, California
January 2, 1997
